Although the health-care system may not be structured in a way that makes most people care about their health — since they don’t usually have to bear the full costs of illness — there is a growing movement of consumers who want to try and take an active role in maintaining their health, and that can be a profitable market for apps and services, according to Rock Health founder and CEO Halle Tecco. The startup-accelerator founder told GigaOM’s Mobilize conference in San Francisco on Thursday that apps like Runkeeper have shown there is a big enough market to make such services worthwhile, and it is increasingly mainstream.
Tecco, whose accelerator helps health-related startups get funding and provides office space, said that one of the problems when it comes to finding business models is that the health-care system isn’t structured in a way that incentivizes people to care about their health. “We’ve created a system where the user isn’t the one paying, so there’s a disconnect between the use and the cost,” she said. But Tecco added that there is a market of people who will pay for tools that help them live a healthier life.
The Rock Health founder also said that we are also seeing a shift from the “pay for service” medical model to a “pay for outcome” model, which puts more emphasis on reducing health-care costs, and companies are also pushing to implement a lot of wellness-related moves to try and reduce their insurance costs — according to one recent estimate, she said, Starbucks spends more on health care than it spends on coffee beans.
Runkeeper founder and CEO Jason Jacobs said that his company realized there was a lot that could be done with health data, but in order to get that data you need something compelling that will convince people to provide their health information in a consistent way — so Runkeeper started as an easy way to help runners track their activity, but has become a kind of centralized database of all kinds of health-related information, including data from scales that share a user’s weight and devices that track the number of steps a person walks in a day.
Building in the ability to set specific goals and then tracking the activity necessary to get to that goal (such as running a marathon) provided even more incentive for people to use the app, Jacobs said: those who set goals or had friends they were connected to within the app were a lot more likely to stay engaged and use the service more.