Tags : app business leadership management why
(Or the difficult case of monetizing mobile Mental Health Care Solutions)
Get a crowd of people together and ask who should pay for mental health treatment, and the likely result is a race to see who can shout out “Not It!” the fastest.
With the stigma that still exists around mental health some individuals can be embarrassed or uncomfortable to even seek treatment, let alone contemplate spending their money on it. When they do think about spending their money, they end up with bumper stickers saying “Gone Fishin’! ‘Cause it’s cheaper than therapy!” There’s also the large population that needs help but simply can’t afford it.
Outside of individuals, you certainly cannot go asking the trained professionals to stop making a living by demanding they give away their expertise for free. Prior to the Affordable Care Act here in the U.S., some of the insurance people would be the first to flee, and depending on your country, your government organization may have just ran out of the room pretending they didn’t hear the question at all, while others flat out say: “What? Health care? Wait! Not even health care, you mean mental health care? We’re not paying for that!”
Sure that’s a broad generalization, somewhat exaggerated for effect, but I bet you know exactly what I mean. And that’s for mental health care as a whole.
What happens when you start to throw technology into the mix? Who pays for that?
At the beginning of our journey here at WeFeel, we had to figure out that exact question. Something that is often forgotten is that technology costs money to develop, and companies must have a revenue stream to exist. The ridiculous amount of “free” apps have conditioned people to think that if it is on your mobile device it shouldn’t cost anything, while they having given in to being inundated with ads. We knew from the beginning the monetizing a mental health care service via advertising was fundamentally a horrible idea. I’m sure you can imagine some of the damaging scenarios that could occur when the two are mixed.
We decided to go out and talk to experts to see what had been figured out so far, but what we found was disappointing in the lack of quality and quantity of information. The vast majority of our research and advice showed that no one really knew. We were told people won’t pay for anything considered an “App.” We found that people had tried with mental health care apps before and failed because they couldn’t crack this one issue. We spoke with local practitioners, and the overwhelming feedback was they couldn’t see adopting technology if it meant they had to purchase something for their clients to use. So we sat down and decided we’d have to figure it out ourselves.
When data is lacking, logic and experimentation come to the rescue
Here is our thinking about different models:
Advertising revenue: As mentioned above this was simply a “No.” If it was the only way, then we’d simply rather not create the company.
Free: From the beginning, we knew that WeFeel had to have a plan to make money. That’s not why WeFeel exists, but we knew that we wanted features that no one was doing yet, like the ability to share data between individuals. That meant servers and technology running in “the cloud” (specifically Microsoft’s Azure in our case). That costs money, as does continuously improving the service and providing tech support. While we looked into creating the company as a 503c nonprofit, from a practicality side it just couldn’t work that way. So free was out.
One-time fee: Many apps are sold by paying a fee to an app store and then you get the app. The problem with this model is it generally only works if the data is stored locally on the device, because you don’t have the overhead of the cloud and often you don’t provide technical support (or if you do you charge a lot more). Storing data locally doesn’t allow for sharing between people, syncing between multiple devices, or restoring data if you loose your phone. Those were all key features we wanted in WeFeel, and so this model simply couldn’t work, unless we started releasing new versions and requiring people to purchase them each time one was released, and that gets old…fast.
Provider-based subscriptions: In this model, each mental health care provider pays a monthly subscription, and in return gets a number of licenses that they can give to their clients. The overwhelming feedback we found here in Utah is that many of them simply couldn’t afford it, or couldn’t be bothered with that. We talked to some people who had attempted that model before and couldn’t gain traction. Another drawback we found is that if a person switched therapists they would loose access to WeFeel unless the new provider also had a subscription. This made no sense to us. A person’s mental health is theirs to own, and if WeFeel can help the individual we don’t want access to be controlled by someone else. In fact a core tenant of WeFeel is that the individual owns and controls their data. A provider-based subscription simply won’t allow us to meet that objective.
Individual-based subscriptions: Thanks to companies like Netflix, Microsoft, Amazon, Spotify, and Pandora consumers are becoming more and more used to buying technology as a service. And yes, while we also sometimes think “not another subscription to pay!” in this case we think it makes sense. Our costs are tied to the usage of the service. More importantly it gives us some unique benefits. First,it also allows us to have a base, free-version of the app for people to try that limits access to the things that cost us the most to deliver: sharing, journaling, and hosting large amounts of data. Then because we can sell the subscription via app stores directly in the WeFeel app, it means we don’t have to store any identifiable information from the customer on our end. No credit cards, no email addresses, or phone numbers. We simply get paid a percentage from the app store.
This is huge for us in maintaining things like HIPAA compliance, and more importantly for us to help people feel comfortable logging their deepest emotions, since we physically can’t know who they are. The individual also gets to not only own their data, but to control who has access to it, including the ability to stop sharing with their therapist. By doing it this way we’ve created the concept of a mental health record that transfers from therapist to therapist at the control of the patient. We think that’s pretty cool.
But there are some downsides. What happens if a large organization wants to buy subscriptions for people? We solved that by creating a licensing portal that maintains anonymity, and when an organization buys a license they are purchasing it on behalf of the individual. Once a patient is licensed that subscription is tied to the patient, and not the organization. This is pretty much a hybrid of the individual-based and provider-based models.
The final hurdle is what is the right price? And to be honest we’re still working that out. Typically you price this things based on the utility they provide, but how do you value the ability to improve one’s mental health? We could compare it to medication and say many people spend upwards of $30 a month on pills, and so we could randomly state “we’re easily worth half that so $15 a month sounds right!” We could argue one’s mental health is worth more than watching TV, and Netflix is around $10 a month, so $10-$15 a month is still about right.
The problem is when comparing to those kinds of things, people simply do not want to pay for mental health services. Showing the value of the service doesn’t necessarily work, and we don’t have enough data yet to make definitive statements like “WeFeel reduces the need for the number of sessions per patient by 10%”
So here’s where we are right now, we spent some time looking at subscription prices that we felt in general most people could afford. Then we did some experimentation. We initially tried $60 a year, which was seen as a bit high but doable by most of the people we spoke with. We didn’t randomly pull that number out of a hat, it was based on cost projections and helping to grow the company rapidly.
And it seemed OK, until we had couples come into the mix. In couples therapy you really need two subscriptions, and $120 a year per family was higher than some of our early adopters could afford.
We changed our growth model and dropped the price to $40 a year, and for many that was OK, even couples. But we were finding that the therapists in our test program were reluctant to ask a patient to go out and spend $40. So to alleviate that concern we put WeFeel on sale at $20 a year. Now the therapist could say that its roughly the same price you would spend on pens and notepads for a year, which you’d be buying anyway to do your “homework.”
For the sake of transparency, I don’t know that as a company we can sustain that $20 sale price for the long term (though I’d like to be able to). That low of a rate means we have to have 3 times as many subscribers to break even. But in the early stages of a company, especially when you are trying to create a market, sometimes a “low low price of just $19.99!” is what you have to do.
If you’ve made it this far, I’d love to get your feedback as to what you think is not only fair, but practical for your patients.
Finally, for those in the industry, we’ve also heard your concerns regarding people who can’t afford WeFeel at any price. How do we get WeFeel into their hands? I’ve been thinking a lot about that lately. And I’d like to run something by you all.
What if we instituted a pay it forward program?
Essentially it would work like this, each paid subscription would include the one for the individual who paid for it, and one to be donated to someone in need. To do this it would have to be all or nothing. Remember we don’t have a way to track who paid for what. That’s on purpose, but means we can’t allow a person to buy two subscriptions at a discount and then choose to donate one. It also means we’d have to at least bring subscription prices up to a point that we could cover the operating costs of a second subscription. So what are your thoughts? Would your patients be encouraged by the fact that in getting a subscription they are also helping someone in need? Would they see it as an added burden?
I look forward to hearing responses. Feel free to comment here on this post, or to email me directly at jeff@wefeel.us
