Hospitals: Turn app development into a standalone business

Critics say hospitals shouldn't be in the business of software development. It's a comment we heard several times as last month's mHealth Summit in Washington, D.C. The fear is that hospitals will get derailed from their primary care mission by the excitement and trendiness of health app development.

But the truth is, hospitals are developing apps, some for their own internal purposes, and some for commercial use. Either way, hospital CIOs needs a sustainable business model to fund, support and maintain the apps they create. Skip Fleshman, a venture capital expert, recently wrote for Xconomy about how to build a self-sustaining app business.

Start by targeting a large market, Fleshman said. Even if your hospital has a special process for treating viral cardiomyopathy, that doesn't mean there are enough cardiac specialists, patients, or payers to support the app, long-term. Even seemingly substantial markets--such as pregnant women or hard core athletes--won't be large enough, in part because of low price points in the marketplace, he said.

Users need to be able to do something with the data your mobile app collects, according to Fleshman. Just sending data such as blood pressure or heart rate to a patient doesn't necessarily help him or her improve health, and won't encourage him or her to purchase (or use) your app, he said. On the physician side, CIOs have long noted that delivering scads of remote monitoring data doesn't necessarily help the doctor care for a patient better.

"What's important ... is that the information provided to the user is actionable," Fleshman said. "Your app has to improve a person's health, or lower healthcare costs."

In addition, Fleshman added that data collection and transmission needs to be easy. "For heaven's sake, don't make users connect a device to a USB cable to download data," he said. "It's got to be easy enough for your 3-year-old daughter or 75-year-old grandmother to interpret and use."

Finally, Fleshman said, create a business model beyond your first rollout. A great app might sell millions of initial downloads, but that's not enough to sustain a company. Plan out several upgrades, updates or new features for the first several years after launch, to continue drawing in new customers.

Fleshman also recommended creating layers of premium subscriptions that go beyond the base-level app--to create a core of customer/users for the long-term.

To learn more:
- check out Fleshman's post