Lois Drapin provides her post 2013 mHealth Summit insights on how IMS Health plans to move mHealth into a more industrialized environment for mhealth apps.
The first time I heard Stefan Linn, Senior Vice President in Strategy & Global Pharma Solutions at IMS Health, pair the words industrial and mHealth in the first few minutes of his address in the Potomac Ballroom as part of the Executive Spotlights session on December 10th at the 2013 mHealth Summit, it made me sit up and listen more carefully. The words seemed to be odd companions, and oddly out of place in a healthcare conference. During the course of his speech, I heard those words three more times in some of its iterations— industrialized, industrializing, and industrialization with mHealth. It went something like this:
“What’s really needed here is to take on a large scale… to take mHealth forward into a kind of industrial world where we have standards, where we have safety and where we have adequate measurement of outcomes of mHealth applications.”
“So… there are a lot of folks taking on the world to a more industrialized environment, but certainly physicians [are] experimenting with this.”
“So… where does IMS fit in all of this? You may know that IMS Health is considered one of the best in the world around industrializing health informatics and analytics.”
“So…we think that this can make substantial contribution to the industrialization of mHealth.”
If you have ever seen Terry Gilliam’s 1986 film Brazil, you may have had a similar reaction. It’s become a cult classic and it is really difficult to describe. Most critics say it has Orwellian roots, but it’s been done in a style that confuses us with an alternate world—an over-realized bureaucracy, filled with regulations and automation, and one in which our main character happily moves about without regard to the dark around him. He even appears to like his job working in the bureaucracy. Robert De Niro has a role in it as the anti-government guy Harry Tuttle. Tuttle quit his government job because he hated the paperwork. For this, he earned a death sentence. The truth is now he’s a moonlighting repairman-terrorist. Yes, he fixes things without permission from Central Services and he drops down from wires fixing the terrifying ductwork that acts as a visual metaphor for the world. He’s a breath of fresh air and he’s there to show those caught up in the ways things are that they can indeed have a different world.
You can see a clip from the film here.
As Roger Ebert said in his not too fond review, “The movie happens in a time and place that seem vaguely like our own, but with different graphics, hardware and politics. Society is controlled by a monolithic organization, and citizens lead a life of paranoia and control.”
Big is in.
But I digress, sort of. One of my key takeaways from the 2013 mHealth Summit is that mHealth has now attracted Big. Big companies—companies like Verizon, Surescripts, Qualcomm, WebMD, AT&T and IMS Health, among others. They have entered into the mHealth vertical for real. That means hearing buzzwords, such as platform, SaaS or PaaS, standards, credentials, are like taming the Wild West. While some blogs reported a not-too-exciting, low energy mHealth event, I saw that Big organizations were actually doing real business behind closed doors. Heads Up, entrepreneurs. What this usually means in the evolution of a market is that much of the path here has been paved by smaller companies without safety nets; that the market has been validated for Big from the blood, sweat, tears and yes, failures and successes of lots of the smaller guys. Sometimes it means that the smaller companies get hurt in the process; sometimes meaningful gestures occur in the form of partnerships when Big needs Small to complete themselves; and sometimes Small can be leveraged and M&A happens. You can be assured that all of this will be happening in 2014 and beyond. There will be fallout and there will be small bursts of stardom. And there will be Big.
Entrepreneurs should always set out to understand and get to know Big.
I was startled by many people during the conference asking me, “Who is IMS Health?” Those of us who cut their teeth in pharma know them well. The history of IMS can be seen on the company’s website here, but it really doesn’t do their long history justice:
IMS Health has survived and thrived since 1954 when it was founded by two entrepreneurial guys. They have gone from private to public, done mergers and acquisitions. Sometimes it’s been quite messy. Yet, if some analysts’ assumptions are right, IMS may be preparing for the IPO route again as soon as 2014. Unlike Epocrates, a company that acquired some EMR assets and then took a sexy shareholder idea of EMRs to the public market, I really think that IMS is serious about mHealth. The company has an awesome history and it keeps rising up over obstacles that others have not cleared. Small can learn a lot by understanding this. This is a company, no matter its ownership, that has deep understanding and roots with pharma and healthcare. They do not jump into things because it is cool or sexy. They industrialize, and it has worked for them. If you understand the inner workings of pharma, you know that most pharma companies have had many IMS people sitting inside pharma companies, mining data and insights. They are and have been an amazing resource for pharma. During tactical and sales planning, pharma relied heavily on IMS to bring data organization, research and insights to product planning, marketing, sales and product development. They also have acquired understanding of the provider and payer markets and continue to astound us with the extent of their data assets and business intelligence. In 2009, the company, then public, described itself as the world’s leading provider of market intelligence to the pharmaceutical and healthcare industries. Today, the company describes itself as “a leading worldwide provider of information, technology and services dedicated to making healthcare perform better.”
What does IMS mean by industrializing mHealth?
Clearly, IMS Health has not entered into mHealth lightly and they are in it to win it. Based upon their first-of-its-kind review and research of apps as published in the IMS Institute for Healthcare Informatics analysis, Patient Apps for Improved Healthcare: From Novelty to Mainstream, Stefan Linn says IMS is focused on three key areas as they bring their products to market:
- Curation—because it is “critically important that physicians, as well as patients, find their way around and that we have a classification system that we know which apps are the right apps”
- Secure communication—“not just between apps but between physicians and their patients.” Security and privacy are of the highest priorities for IMS Health. This past August, IMS Health acquired the struggling Diversinet and with it came Diversinet’s military grade secure technology. Combined with the IMS Health approach and experience with encrypted data, providers, payers and pharma patient data, IMS brings the first taste of reassurance into the market. The IMS Health launch emphasizing security and privacy came at the same time that Happtique experienced what appears to be a breach with their certified apps. The message resonated with the tech people in healthcare, that’s for sure.
- A more rigorous approach to evaluation—because “when we think about apps we are not really talking about entertainment information, we are talking about a much higher standard in other parts of healthcare.” IMS Health is proposing that apps basically should take a place “next to other therapeutics.” By this, Linn explained: “So if you think today about a procedure…a knee replacement surgery…a patient of course gets a medical device implanted, that has gone through lots of testing and evaluation and approval by the FDA. And then, when the patient comes out of surgery, they get medication prescribed for healing and for pain. We would like to see that at the same point in time that patient would also be prescribed an app just like a medication that helps the patient manage his or her rehabilitation and ultimately, hopefully, produces faster rehabilitation, reduces offices visits and maybe even cures re-admittance to the hospital.”
IMS Health launched two products. AppScript is an enterprise solution for payers and providers to establish an app formulary and a prescribing solution for physicians. They have taken the classification system a bit further than Happtique, the first on the market with app formularies and prescribing tools for physicians. They appear to have made the curation more transparent and backed up by a proprietary scoring system married to technologies that learn as physicians prescribe and patients download. With the app prescribing tool, they are taking a page out of the Surescipts manual. “Here we are not just talking about taking an app and building it into the workflow of the physician to get it safely to the patient, but really all the way to reconciliation the same way that physicians rely on medication reconciliation. The same process needs to be established for apps.” As apps become reimbursed and prescribed, one can easily see the transaction model—recurring revenue in a similar way as has certification and reconciliation been done during the e-prescribing model. (Hint: It would be wise for entrepreneurs to also understand the long history and development of eRx, and to understand how the growth of eRx as a transaction model occurred.)
The other product, AppNucleus, is a security and hosted platform that IMS is making available to developers. If you follow John D. Halamka’s blog Life as a CIO, you know that providers are deeply concerned about privacy and security. In this post: John shows us his security update presentation to the Board of Beth Israel Deaconess Medical Center. We all know that we like to use our smartphones for everything. With this product, IMS Health is proposing a secure “container” for health apps. When I spoke with Matt Tindall, Director of Consumer Engagement at IMS Health, he explained:
“So a developer can wake up one morning, have a great idea and not ever have access to mHealth space and they can develop an engaging app. Maybe they are a gamification person and they know how people engage and respond but tomorrow morning they can wake up at three weeks to three months later they can have their app in the app store that we will pick up for them and will rate and rank form them.”
Part of the attractiveness to developers, says Matt, is that IMS to help them understand “why did it rank poorly or well, help them understand their ranking.” IMS Health is not going to get paid to rank apps in the apps store. When I asked Matt if this was going to be a consulting model at some point, one for which IMS would seek to be paid he responded, “I think that would be a business model we would pursue. And we have been approached by a lot of companies already that either have apps in our app store that are already curated that are ranking mid or low, and are asking us, ‘why are you giving us that ranking?’. And as our algorithms improve and the platform scales, we will be sharing a lot of what’s in the algorithm although some of it is proprietary.” Matt declined to talk much about pricing models, although we do know there is a licensing subscription model for the platform, and right now a free API or SDK for developers to write to on top on the IMS secure platform.
Matt and I also spent some time talking about starting points. IMS Health will have a very different starting point for prescribing apps. Matt said that the clients and potential customers they have been speaking with are not interested in a process that “takes three minutes for the doctor to find the app and filter to get the app…we want it to happen in 20 seconds and we are providing a 20 second experience.” Additionally, IMS Health has a pretty good idea about physicians and what they actually do in practice. For example, IMS Health knows what medications physicians prescribe. From this perspective, one can see that their starting points on prescribing apps might start at another, more engaging level for the physician and patient than others that have developed similar prescribing tools. The back end data is always interesting.
Lessons, Big and Small.
When I asked Matt Tindall to describe himself, he told me he has spent 16-17 years in the biopharmaceutical industry working in corporate development consulting, that he had started two companies with other cofounders—one was in the health space, the other in the social media space. He’s worked at Digitas Health, an agency, and managed accounts spanning consumer products and B2B business. He believes that “entrepreneurial spirit is something that I bring to the table, but with a strong business background in the healthcare space and in the consumer space.”
More importantly, Matt tells me, “We need to act like a startup in this environment. I am building a pod team that is acting like a startup, so it’s a true innovation model within a big company…so I am somewhat siloed off from the big company challenges. And we are building a really aggressive, very flexible business unit with the technologies that the company feels are important to the healthcare space.”
Sometimes in the mHealth space, we’re inclined to think that all mHealth innovation is developed by Small developers. This simply isn’t true any longer. Large hospital systems, payers and publishers are building mobile apps and designing their own tablet solutions. How they structure their intrapreneurial efforts will always be interesting to watch. It’s true that Big is very much involved though—as inventors, as innovators, as industrializers.
What are the takeaways for Small entrepreneurs? Do you play on this platform? Will the platform have true reach, distribution and access? Will the promise of security and privacy hit home with providers and payers? What are your expectations of IMS Health, your thoughts? I would love to hear from you.
For entrepreneurs and startups, my advice to you is to seek out the hot spots that Big needs, doesn’t know that well or needs to learn more about. And of course, to do it better, cheaper and faster because Small can be flexible and daring, and Big has customers, investment and/or acquisition dollars. Big also has ductwork and cultures that sometimes make it hard for them to be fast and surprising.
And as for me, my questions are going to be: Who is going to be Harry Tuttle? Where can you find him when you need him?