It is a long and difficult way from a medical app idea to medical app development and deriving profit from it further on. Before the app can make you money, it is necessary to validate the market and consider all the nuances you may come across on your way.
One of the most crucial parts of starting your own app is selecting the medical app monetization strategy suitable for your project. In case you have already launched, you can always consider adding new monetization models to the existing ones. Here you will find several ways how to monetize a healthcare app that publishers use to improve their revenue models. From sponsorship to white label medical solutions, you’ll find quite a number!
Healthcare app monetization strategies: 2023 overview
In the United States, only 8% of mobile applications use a paid model, whereas globally, only 3% of mobile apps rely on paid downloads. Furthermore, around 26% of US apps generate revenue through ads, which is lower than the global average of 37%.
According to recent data, the top 200 apps currently earn an average of $82,000 per day, with gaming apps being the most profitable niche. Moreover, the global revenue from mobile apps has been growing steadily at an average annual rate of 11-13% since 2018.
In terms of in-app purchases, only 5% of app users spend money on them, yet they account for nearly half (48.2%) of all mobile app earnings.
App monetization strategies vary from advertising-based and sponsorship to data monetization and premium content. The simplest monetization strategy for medical app is charging for app downloads in the app store, however, it loses its popularity these days since it is challenging to convince users to pay for an app they didn’t use before.
Freemium is another strategy when users can have free access to some features of an app, while some of them are open only to those who pay for a premium subscription. The subscription is an alternative strategy, where users get access to premium content if they pay for a subscription. Based on different features different subscriptions can be purchased by the user. You will find out more about the most popular app monetization strategies further on.
How to make money from medical apps: 8 ways
#1: Premium content
In the past century, it took 50 years for the volume of new healthcare knowledge to double. However, by 2020, this timeframe had drastically reduced to just 73 days. As we move into 2023, we can expect even more rapid advancements in healthcare, with cutting-edge research, technology, and tailored content leading to new diagnostic and treatment options that can keep pace with the rapidly evolving healthcare landscape.
With the evolution of mobile learning devices, you can learn anytime, anywhere. Though the content is ubiquitous, the Internet stores a huge number of quasi-scientific, unconfirmed and false information, which is especially dangerous in medicine. Besides, there are a lot of journals for doctors publishing dozens of articles every day. It turns out that a medical professional has not only to assess the quality and reliability of that information but also to carve out time for doing that.
All mentioned above justify providing premium content in medical apps for an additional fee. Epocrates, for example, provides accurate information about drugs, their interactions, updates from journals. You also can identify pill, calculate dosing and test your diagnostic skills in picture quiz. It costs $174.99/year or $16.99/month to unlock additional features and tools - information on hundreds of labs, treatment recommendations by infection site, interactions of popular herbals and supplements, peer-reviewed diseases.
#2: In-app advertising
According to the latest data from Statista, mobile ads spending in the US in 2023 is expected to reach $355.1 billion. To compare, it was two times lower in 2018. Advertising agencies and mobile ad networks stand ready to work with every app publisher. The in-app advertising model is perfect for free apps of any category. According to a study conducted by Research2Guidance, 10% of medical app publishers use in-app advertising revenue source.
Each ad network will pay you for different metrics describing the quality and quantity of ads. With clicks (cost per click) you will be paid for each click by a user on advertising, with installs (cost per install) - every time a user installs an advertised app. Some advertisers pay for 1000 displays (cost per mille) of their ads in your app. So the more monthly active users and sessions - the more clicks and installs, therefore the more you earn. The great thing about this model is that you can get paid for ads and for the opportunity of removing ads.
There are a lot of mobile app ad networks willing to help you increase your revenue, besides the list is being added by newcomers in the market. However, not all of them let publishers from medical category use their services simply because the type of advertisers they work with is inappropriate. It is worth reading guidelines for publishers provided by ad networks and carefully filter the categories of ads for display. It is impossible to say which of mobile ad networks is best for your project. We can just give a little direction:
- eHealthcare Solutions
Sponsorship is one of the innovative mobile business models in healthcare. 24 out of 100 medical app publishers use this type of monetization. This monetization model might be known to you already if you have ever visited health care conferences and exhibitions that use mobile event apps covering all digital information - note-taking, speakers' profiles, the conference program, interactive maps. The organizing committees of such conferences offer delegates to expose their brands, via apps including, to event attendees.
The idea of sponsorship revenue model in the mobile health industry is as follows: the app publisher lets other brands, it may be a Pharma or insurance company, offer their products or services to the app's user base. Thus instead of ads, users of a medical app, are presented with sponsoring the company's offers. To find sponsors for your medical app you may start with visiting such healthcare conferences or with just reading reports from them.
Selling meds online is in demand. The National Center for Health Statistics shows that 69% of adults in the United States aged between 40 and 79 took one prescription drug in the past month.
Medication selling is the business model with the highest percentage of revenue millionaires among mHealth developers. Though the model is the most profitable, at the same time, it is the most complex in implementation as state agencies protect consumers by controlling sales of medical products and you must be a licensed distributor.
CVS Pharmacy, a successful app with a transaction revenue model, is a case in point. The app is great for managing prescriptions: refilling, viewing recent orders, setting automatic refills. Pharmacy tools include pills identification, filling new prescriptions, checking drug interactions.
Today data is a new currency. Non-personal and anonymous data about digitally-empowered users is a precious asset for product companies and research institutions. Data monetization intermediaries collect non-personal data like device type, mobile operator, country. A third party never collects more data than you are willing to provide. You configure data types for each user, which will be transferred to companies in the future.
If your app has less than 10 000 daily users, the chances to see tangible results from data monetization are small. Profit starts from 50 000 daily users, so if there are fewer users, work on the quantity of the app's audience. To understand how much you can earn with data monetization, visit data collectors and intermediaries sites. Some of them have calculators of monthly revenue.
#6: Service sales (remote consulting)
Apps providing a connection to doctors are still most popular among all mobile health apps for patients in 2023. One of the reasons why apps with remote consulting are in demand is appointment wait times. According to Statista, in Boston, for example, the average wait time for family physician appointment takes 66 days; in New York, it is 26.
If you already have a medical app, think of adding an opportunity to contact a doctor. For example, the need of people to see a physician within a short time convinced GoodRx, a pharmacy app that helps people compare prescription drug prices, to introduce telemedicine services enabling anyone to get access to quick medical care.
#7: Pay to download
The share of paid apps in the Apple App Store is 9.7% and in Google Play 4% in October 2019, and the shares haven’t much changed since. These figures don't mean to disturb you. The quality of app content, security, the number of features play an important role in the healthcare category and is something users are ready to pay for.
Paid healthcare and medical apps work well for small target groups as it is easier to explain the value of the app. For example, people with dementia are ready to buy an app with everyday critical tasks checkers or with the assistance in recalling important information. Pay-to-download monetization in healthcare may include apps for people with chronic diseases, for highly specialized doctors, and for veterinary professionals.
#8: White labeling
White labeling is a popular monetization model for medical apps, especially for those focused on patient care or health monitoring. This model involves selling the technology behind the app to other companies, such as hospitals or clinics, who can then rebrand and customize the app to fit their own branding and offer it to their patients.
Implementing a white labeling strategy involves a few steps:
- Develop a scalable and customizable medical app: To monetize a medical app through white labeling, it's important to have a high-quality, scalable product that can be easily customized by other companies. The app should also have robust features that can be tailored to the specific needs of healthcare providers.
- Identify potential partners: Once you have a solid medical app, identify potential partners who might be interested in white labeling your technology. This could include hospitals, clinics, health insurance providers, or other healthcare organizations.
- Negotiate a licensing agreement: Work with potential partners to negotiate a licensing agreement that outlines the terms of your partnership. This agreement should cover aspects such as the price of the license, the scope of the partnership, and any customization or branding requirements.
- Customize the app: Once a licensing agreement has been signed, work with your partner to customize the app to fit their specific needs. This might include changes to the app's branding, user interface, or features.
- Launch the app: Once the app has been customized, launch it on behalf of your partner. This may require ongoing support and maintenance to ensure the app remains up-to-date and continues to meet the partner's needs.
The examples of medical apps that have successfully implemented a white labeling monetization model are:
- Doctor on Demand: Doctor on Demand is a telemedicine app that allows patients to video chat with licensed physicians. The company has partnered with health insurance providers to white-label their technology and offer virtual doctor visits to policyholders.
- Livongo: Livongo is a digital health company that provides remote health monitoring for patients with chronic conditions. They have partnered with health insurance providers and employers to white-label their technology and offer their services to policyholders and employees.
Given this, white labeling is a viable monetization model for medical app providers who want to sell their technology to healthcare providers. To implement this model successfully, it's important to have a high-quality, customizable app, identify potential partners, negotiate a licensing agreement, customize the app, and launch it on behalf of your partner.
Every day there are more ways to monetize mobile healthcare apps. Using one monetization model for your medical app does not imply the abandonment of others. A skillful combination of different methods will help you to achieve better results. Of course, all the above methods apply if you already have a functioning app. If you don't, welcome to our Free project estimate page! More insights ahead.
Frequently Asked Questions
What are the most popular ways to monetize mHealth app?
There are several popular ways to monetize healthcare apps that can be categorized into two main types: direct and indirect monetization.
Direct monetization involves generating revenue directly from users of the app. This can be done through various methods such as charging for the app itself, offering in-app purchases or subscriptions, or taking a percentage of any transactions that occur through the app.
Indirect monetization involves generating revenue from other sources, such as partnerships or advertising. For example, an app could partner with healthcare providers to offer their services through the app and take a percentage of any revenue generated, or they could display ads to users and earn revenue through ad impressions or clicks.
The most effective way to monetize a healthcare app will depend on the specific goals and features of the app, as well as the target audience and competition in the market. It is important for app developers to carefully consider their options and choose a monetization strategy that is sustainable, ethical, and aligned with their overall business objectives.
How do I choose the right monetization model for my mHealth app?
Choosing the right monetization model for an mHealth app depends on several factors, including the app's goals, features, target audience, and competition in the market. Here are some key considerations to keep in mind:
- Value Proposition: Consider the unique value proposition of your app and how it differentiates from other apps in the market. This will help determine which monetization model would best align with your app's goals and target audience.
- Target Audience: Understanding your app's target audience is crucial in selecting the right monetization model. Analyze their demographics, behavior, and willingness to pay for the app or its features.
- Competition: Evaluate the competition in the market and the monetization models they are using to determine the most effective monetization model for your app.
- App Features: The app features play a crucial role in determining the best monetization model. For example, a feature-rich app may be better suited for a subscription-based model, while a free app with limited features may do better with in-app advertising.
- Ethical Considerations: Choose a monetization model that aligns with your ethical values and does not compromise user privacy or security.
What are the most profitable medical apps?
As stated by the Emergenresearch research company, the eight most profitable healthcare apps, not taking into account apps for self-help and fitness, are:
- Mobile MIM
- Mobile MIM
Exploring the monetization models they have chosen may help you derive useful insight that you may then use when developing your application.