Dr James Graveston, a senior medtech specialist at Zühlke UK and former NHS hospital doctor, explores research UK consumers have towards apps and other digital services, why they are the future - but with insights on the problems B2C firms will need to overcome if they are planning to scale successfully with sales to consumers.
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Medical apps concept
Our conclusion for medtech providers going down the B2C route with a purely digital solution is they must be very cautious indeed about revenue expectations. There really isn’t a clear remuneration pathway
There is some good news for medtech CEOs and entrepreneurs from our research this year into UK adults and their attitudes towards medical apps and other digital treatments... but sadly a lot of cautionary news too.
Much of the UK population is raring to go when it comes to getting digital apps. We commissioned a research agency to question a representative 1,000-person sample and half of all adults said they would feel “comfortable” or “very comfortable” with being prescribed an app for treatment by their healthcare provider, and of the 25% who were uncomfortable with this, half only mildly objected.
Also, the people who are most likely to be interested in medtech apps are younger or more affluent adults, although there is strong demand for them across all working-age adults. In short, at first glance there seems to be a very large, very keen, affluent, and very under-served market.
However, there is a lot to be cautionary about from our research before launching down the B2C route and selling directly to the public.
Firstly, people really don’t want to pay for medical apps in the UK!
Half of the population will point-blank not pay anything for a medical app. While the other half will pay up to £10 per month, their willingness to pay quickly drops with only 9% willing to pay £21 or more per month, and only 3% more than £30.
A big part of this is because many don’t trust the technology yet. Over half of people felt apps and digital devices could not measure their health accurately, with only 19% comfortable (to some extent) that they could. This was similar across all age groups with, perhaps surprisingly, mobile phone-loving millennials in their 30s the most sceptical.
Another part of this is their huge trust for the NHS. Their trust for the NHS means people will use medical apps prescribed through the NHS but are much less trusting of other providers.
A whopping 74% of all adults cited the NHS as their “most trusted” provider for medical apps. This contrasts with only 8% for Big Tech firms like Apple, Amazon & Google, and 10% most trusting established or start-up medtech companies.
It is worth saying at this point that while data protection is a big concern, our research shows it is not the blocker.
Although 20% of people say they would not want to share their health data at all, the rest of the population would do so under certain conditions.
So, the dilemma facing medtech providers going down the B2C route is that while there is a huge and unmet demand for medical apps and devices... but the market in the UK wants free prescription apps from the NHS, is hugely sceptical about other providers and is not willing to pay much either!
Our conclusion for medtech providers going down the B2C route with a purely digital solution is they must be very cautious indeed about revenue expectations. There really isn’t a clear remuneration pathway, and a look at the accounts of many existing wellness and fitness app providers also shows that many are struggling to monetise even high usage.
For investors, they need to make sure that there are sufficient funds to last the course should sales prove much slower than hoped for – which is highly likely. Otherwise, they will have the unwelcome prospect of being diluted by further fundraising and, worse, little chance of exiting at all.
But before concluding that the NHS is clearly a better bet and going down that route instead, caution here is also required!
From the outside the NHS appears a big central organisation - sell once to someone at the centre and you’re in. Nothing could be further from the truth!
There is no central delivery system for apps and other medtech in the NHS. Things like the NHS App and the NHS COVID App (which Zuhlke created and ran) are rare exceptions. Without going into painful detail, NHS budgets are split regionally and ultimately between trusts covering primary and secondary healthcare, mental health, and ambulances. There are by 229 trusts and 1,250 Primary Care Networks (PCNs) in England alone, and in their areas, they collaborate with each other and decide how budgets are spent through 42 Integrated Care Boards (ICB’s).
If you have an app that does something very simple (such as a reminder app for GP’s patients to take their pills) then you will need to sell it through each Trust or PCN or GP practice individually, vastly increasing costs of sale.
However, if your app provides an “integrated medical pathway” for a disease or condition, spanning primary and secondary care, you will require alignment across the Integrated Care Systems (the partnerships the ICBs look after), effectively requiring agreement amongst multiple trusts and PCNs to be procured.
Only well-funded and determined organisations can stay the course for such a protracted and uncertain process, especially when the sales effort needs to be duplicated across each of NHS England’s Trusts, ICBs or PCNs.
Given that both the B2C route and trying to sell into the NHS are both high cost and potentially low reward, and especially off-putting for start-ups, what is the solution?
The case for the widespread introduction of prescription apps is clear, and the lag in their introduction is harming patients and the NHS itself. Sadly, I cannot see it happening easily within the existing NHS structure.
Instead, the medtech industry and patient groups need to successfully lobby the government to step in and introduce a centralised market for digital health that the ICB’s, trusts and GP’s practices can buy from without the current rigmarole.
Personally, I’d turn the very popular NHS App into a gateway for prescription medical apps. All NHS approved apps would be available through it... with the patients GP or consultant “switching it on” when prescribed. One point of sale for the medtech providers, one delivery platform (a bit like the NHS’s own App Store for patients), and medical grade apps available to all patients that need them simply and conveniently.
Such a straightforward approach would unleash the innovation of the UK’s medtech sector to dramatically improve the fortunes of both the NHS and millions of patients, rather than the current situation of the sector being shackled by the NHS’s byzantine structure.
Zuhlke’s full research – Health Study 2023 – is available to download at: https://www.zuehlke.com/en/insights/future-of-the-nhs
