Frequently mHealth implementers must decide whether to provide equipment or the service itself to end users free of cost. Some experts advocate that end users access programs through their own mobile equipment and pay related airtime and fees as they would for other services. This ensures that end users are already familiar with the mobile equipment and are invested in keeping it. Often, end users perceive greater value of a service if they have to pay for it.
Other experts believe that in order to maximize uptake and access to the mHealth program, equipment and related operational costs should be subsidized or provided for free. The implications of these options are important to consider for the long-term sustainability of the project. While subsidizing equipment and fees might be feasible for a small pilot project, it might not be practical when the project is scaled up. On the other hand, requiring end users to pay for a new technology might limit its reach and use.
A 2012 survey of 1,798 respondents from developed and emerging countries gauged their willingness to pay for mHealth services. The survey revealed that users in low- and middle-income countries are generally more willing to pay for mHealth services than users in high-income countries. In low- and middle-income countries, 27 percent of users were willing to pay up to $1 USD per year for mHealth services, 33 percent of users were willing to pay between $1 and $5 USD per year for mHealth services, and 20 percent of users were willing to pay more than $5 USD per year for mHealth services (the other 20 percent were not willing to pay). These results indicate that mHealth services might be able to generate their own sustainable revenue streams.
m-Enabled Inclusive Business Models: Applications for Health shares several m-enabled case studies that showcase commercially viable business models for serving low- and middle-income communities. The report sheds light on how to serve low-income populations in a manner that will cover program costs and have significant reach, highlighting best practices and sharing business model principles that enable sustainable impact with donors and others.
In another recent publication, Sustainable Financing for mHealth, the mHealth Alliance and Vital Wave Consulting identify seven critical success factors for ensuring the financial sustainability of mHealth applications (several of which overlap with topics already covered in this Guide):
- Know the stakeholders. For each stakeholder, consider the size of the organization; whether it is part of the public or private sector; whether it is a local or international organization; whether it is a new or repeat customer; and whether it is operating on a short- or long-term time horizon. These factors will determine the kinds of data and evidence that will attract a partner to the project and will shed light on the kinds of support the partner can provide.
- Ensure the value proposition for all stakeholders. In other words, understand and articulate the incentives that will attract each partner—what is in it for them?
- Plan for long-term economic support. Anticipate your funding source not only for the pilot stage, but also for future iterations of the project. Who pays for the service—a donor, the ministry, a private sector partner, or the end user?
- Localize the business model. A program model that works well in one locale might need adjustments to succeed in a different setting.
- Plan for capacity building, including M&E. Having a solid plan for capacity building will ease the concerns of potential investors about a lack of financial, hum, time, or other resources for mHealth. Ongoing M&E will help the project demonstrate heath impact, cost savings, program efficiency, and return on investment to potential partners.
- Keep it simple. Particularly when collaborating with multiple partners, limiting partner contributions to their core competencies reduces the likelihood of conflicts of interest.
- Understand the particular funding needs of mHealth application types. The type of mHealth application and the evolutionary stage of the mHealth intervention will determine the need for funding—whether it is “seed” money to support start-up, “gap” funding to support the scale-up process, or “scale” funding to support ongoing operations at scale.
THE EXPERTS SAY...
“The development [funding] approach has cycle issues. 3-5 year grant cycles forces a constant churn in staff and funding structures. This can be overcome with significant buy-in by long-term partners (for example, convince the MOH to hire people to support mHealth programs).” - Isaac Holeman, Medic Mobile