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The Healthcare App Market

By Tim Kridel for Digital Innovation Gazette

Search for diabetes in Google Play and you’ll get more than 1,000 apps. The less common affliction of psoriasis has at least 50 apps to choose from. And these are just two examples of the crowded market for healthcare apps.

The good news is there are ample opportunities to stand out from the pack, not only in the eyes of consumers but also physicians, hospitals and other potential customers. For instance, obtaining U.S. Food and Drug Administration (FDA) approval helps build credibility in the eyes of healthcare providers, which can be an important sales and distribution channel.

We recently spoke with Robert McCray, president and CEO of the Wireless-Life Sciences Alliance, a trade association for companies that specialize in healthcare apps and other mobile medical technologies.

There are already tens of thousands of healthcare apps. But a recent Pew Internet survey found that only 19 percent of smartphone owners have downloaded a healthcare app. What does that say about the supply and demand?


Robert McCray: It’s not saturated. It’s a very confused market for consumers who are looking to adopt something or for developers looking to fill a niche. How do you stand out in that crowd?

One way seems to be to use an established healthcare brand as a sales and distribution channel.

R.M.: Right. They have the channel established. They have credibility, which in healthcare is important. Team up with them. You get credibility, distribution and exposure.

Another way that’s coming is the notion of prescribed apps, specifically physician-prescribed apps. There are programs beginning to look at how to get physicians to prescribe an app to help patients manage their health or their sickness. There you get closer to, or more likely go over into, the area of FDA regulations. In fact, if you’re going with the established players, you’re probably going to go into regulated. But a physician or healthcare provider can recommend or prescribe a non-regulated device or service.

So is FDA approval another way to stand out from the pack?

R.M.: If you have an app that’s approved by the FDA, it’s one mark of separation. You take those 15,000 or 20,000 apps and go to down to a few handfuls.

There are also groups looking at curating. You might look at Happtique, an organization spun out of the Greater New York Hospital Association. They set out to curate applications that are intended for clinical use by hospitals and physicians.

It’s doing something that, say, Apple doesn’t do. Apple curates for ‘Is it going to work?’ They take no position on the quality of the underlying information. This is filling that gap.

What are the basics of regulatory approval that developers should be aware of?

R.M.: What claims are you making about your application? Depending on what you say, it puts you on one side or another of the regulatory guidelines.

By the way, from the FDA perspective, they’re all devices, whether it’s hardware or software. It all falls under medical device regulation.

One example of a company that’s met with a good deal of success that illustrates some of this is AirStrip. They went to the FDA to get approval for their application, which ports information from a variety of medical devices to physicians. They chose to be regulated because it’s a sign of credibility within the healthcare market, where hospitals are going to be their key customers. It demonstrates to the community that this is medical-grade technology.

What else should developers consider when developing a healthcare app?

R.M.: There are four key questions:

1) Who regulates?

2) Who will pay? Is it the consumer? Is it going to be reimbursed by Medicare or insurance? Typically if you’re going with a regulated application, more likely than not, you’re going to have customers that are looking for reimbursement from Medicare or insurance -- not always, but most often. If you go the consumer route and don’t have the FDA to worry about, then typically you’re not going to be covered by insurance or Medicare.

3) What is the value proposition? What problem is this solving for people? Whose endorsement should the app have to support that value proposition? I think many of the apps on the market today fit in the entertainment category rather than the health category.

4) And lastly, who will distribute your product?

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Photo: Corbis Images

Copyright (c) 2012 Studio One Networks. All rights reserved.

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