(A version of this Health Alert, which is co-authored by Roslyn Layton, was published by iHealthBeatRoslyn Layton is a PhD fellow at health-information-technology-150x150Aalborg University’s Center for Communication, Media & Information Studies and vice president of Strand Consult.)

The Federal Communications Commission’s recent decision to regulate the Internet with the same law that was created for “Ma Bell” before World War II has plenty of implications for the health innovation economy. The era of “permission-less innovation” may be coming to an end as the FCC will scrutinize telemedicine applications and other broadband-enabled health care services because they involve connectivity. If Congress can act quickly to rein in the FCC, a disaster can be averted.

Many recognize net neutrality as a code word for a longstanding lobbying effort by high-bandwidth users like Netflix and Google to get the government to force carriers to let them monopolize bandwidth without paying for it. However, it’s about more than people trying to break the Internet by sending cat videos to their friends. Net neutrality, as regulated by the FCC in some 300 pages of rules, threatens one of the most promising areas of innovation in health care — using mobile devices to maintain and improve people’s health.

An example of this is an arrangement between UnitedHealth Group and AT&T launched last year. UnitedHealth Group wanted to incentivize low-income pregnant women to watch prenatal care videos on their mobile phones without deducting the usage from their mobile account balance. Unfortunately, advocates for net neutrality mischaracterize this program, called “sponsored data,” as discriminatory, and FCC’s new rule gives the agency the power to regulate this kind of preventive health care out of existence.

Ensuring healthy pregnancies is only the beginning. The number of new technologies and business models that rely on mobile telephony, especially smartphones, to reduce the costs of America’s epidemic of chronic illness is increasing exponentially. And they are sorely needed, as chronic illness drives our out-of-control health spending.

The most expensive 1 percent of patients — which each consume more than $90,000 of health spending annually — account for more than one-fifth of all health spending. The most expensive 5 percent of patients account for almost half of health spending. The primary factor that drives a patient into this most expensive tier is at least one chronic illness. These include mood disorders, diabetes, heart disease, asthma and hypertension.

There is rapidly emerging evidence of successful mobile therapies for chronic illnesses. For example, WellDoc is one of a growing number of providers in diabetes management that use mobile technology to remind patients to check their blood glucose and take their medications. Scholars have published peer-reviewed research that WellDoc’s personalized behavioral intervention succeeds in significantly improving control of blood glucose. Indeed, its product is approved by the FDA as a prescribed therapy.

Mobile interventions may finally solve the problem of delivering health services effectively to low-income and minority populations who have less access to traditional pathways to care, even though they suffer a significantly greater burden of chronic illness. (For example, one in five black Americans suffered from diabetes in 2008 and 2009, compared with fewer than one in 10 white Americans.)

According to market research firm comScore, smartphone penetration has crossed the majority threshold for lower-income groups. Indeed, the latest figures indicate that 61.3 percent of mobile subscribers from households earning less than $25,000 per year now own a smartphone, an almost 50 percent increase from January 2013.

In general, getting patients to take their medicines responsibly is a huge challenge. A 2013 study by the IMS Institute for Health Informatics concluded that more responsible use of medicines could eliminate more than $200 billion in avoidable costs every year. Entrepreneurs are hard at work developing mobile technology that will interact with patients to solve this problem for every chronic disease.

We’re not just talking about reminders to take your meds on time, but mobile apps that harness new findings in disciplines from computer science to psychology — the “gamification” of health — to dramatically improve outcomes. Medical devices could measure your vital signs and feed data passively through your smartphone into the cloud for analysis and timely feedback, either automatically or by a health professional.

If allowed, these new technologies will emerge with new business models. Managing chronic diseases and enabling health care by mobile applications represents low-hanging fruit not only to reduce health care costs, but to improve patient outcomes. The price of a mobile subscription is insignificant compared with the cost of a heath care emergency or adverse event that can be prevented through connected devices and applications — not to mention the value of well-being. It would seem that health care providers could subsidize their patients’ mobile subscriptions outright because of the high cost-benefit ratio. But that possibility will be obliterated by FCC and net neutrality extremists who believe that the consumer should bear all the costs of connectivity.

Allowing FCC’s new rules to happen would cause the most promising area of innovation in U.S. health care to blow up on the launching pad. This new generation of health entrepreneurs should be allowed to develop payment models without the FCC’s permission. Congress must intervene to stop FCC’s forthcoming crime against patients


John R GrahamJohn R. Graham is a Senior Fellow at the Independent Institute as well as NCPA.

As an expert on individual choice and limited government control over medicine, Graham speaks frequently on health reform on radio and television, and at meetings in the United States, Canada, and Europe