7 business models you didn’t know about, reshaping the healthcare marketplace
When I first saw this collection of words puddled together, I found myself wondering if any of this would make more sense if the arrows were directed? Only when I googled it, did I come to know that this was a hassle map.
From what I’ve understood, hassle maps are word clouds trying to map all existing challenges that impede a better customer experience in any industry. Above is a description of the problems that an average customer faces in making health care choices while s/he is already paying a whopping 60% of these expenses out of pocket!
And this is barely the tip! As you keep reading, you’ll soon have an epiphany; the same I had – healthcare landscape is set on the path to epic transformations; a paradigm change precipitating at an accelerating pace aided by big data, e-commerce revolution and a transition into sharing economy.
This change, this web of ideas thrown in disarray above, is a euphemism of the enormity of a challenge that belies the rapid evolution of this industry.
Fortunately, sharing economy has helped ease this transformation, by unlocking the assets of economy for sharing rather than ownership, and allowing excess to be distributed among the bourgeoisie at reasonable costs. With transportation and retail having seen their day, now, it is the turn of a segment, so far overlooked by governments & dominated by private players – healthcare.
Healthcare was once a single-chain, supply side, wholesale industry; but now, it is edging towards becoming a hyper-competitive, multi chain & demand driven industry, one that is location-independent & information based. The consumerism in this space is bound to explode, through smartphones and mobile apps, into a new, $20 billion market.
The visible fatigue among patients for one-size fits all, months of waiting, gaps in information, lack of transparency & absence of crowdsourcing portals like Yelp in healthcare industry will soon materialize into a $1 trillion market in US alone.
Let us probe how the technology enabling these on-demand and marketplace business models can reinvent an entirely new supply paradigm, one which trades information rather than building assets, in order to scale.
On Demand Health models
Let us define what is an on demand economy. In the words of Shervin Pishevar & Scott Stanford, Co-founders & Managing Partners, Sherpa Ventures, the on demand economy is the ‘Instant, pervasive access to goods and services, tailored to individual needs, often without the burden of long-term ownership or commitment’.
The landscape is fast changing to accommodate this philosophy & the needs for personalization & instant gratification among consumers; the biggest hurdles being the incumbent players, who want to maintain status quo without addressing the Triple Aim – reducing cost, improving outcomes and improving patient experience.
Let us establish some context and try to explore what spurred this change.
An ideal framework to map this change, during the course of nearly a decade, could be drawn if we address the following five touch points in the health care cycle of a typical customer.
- Personalized Health Solutions
Consumers expect health care services customized to suit their needs, health history & scores of other personal attributes.
- Information on Request
Appropriate access to health knowledge is vital for the management of individual health.
- Patient Experience Benchmarks
Health systems are beginning to embrace more patient–centric metrics of care, by focusing on treatment outcomes.
- Care-anywhere networks
Technology will reduce the utilisation of hospitals, nursing homes, and physician office visits. Wherever they go, the care network shall follow!
Through collaboration and investment, a grid of technicians, clinicians, hospitals & doctors would be able to offer consultations remotely.
To understand this framework in relevance with the on demand economy now taking roots in healthcare industry, let’s take a look at the possible business models, and the constituent layers of interaction.
These possibilities together contribute towards the creation of this new ecosystem which shall change the healthcare landscape for good, in favor of consumers.
Keeping in view the above model, here’s a detailed analysis of the respective models explained along with corresponding developments in the on demand health care economy.
On Demand On Site
1. Medicast is a healthcare technology service that connects patients with nearby on-call doctors 24 hours a day, to deliver high quality, compassionate care in the comfort of a patient’s own home, office, or hotel and all with the click of a button. This startup, a doctor on demand service for in house visits, has so far received a funding of $1.9 million in 2 rounds from 12 investors.Only physicians are available for call, and the user, like other mainstream on demand services, cannot choose the doctor.
Teladoc is a telehealth service provider, trying to provide quality and affordable healthcare for adults & children with its workforce of vetted physicians. Founded in 2002, the company has raised $75 million in 4 rounds from 7 investors. Telehealth programs have a huge potential to save consumers time and money, while easing the burden of the healthcare system which is increasingly falling short of enough doctors to meet the needs of patients.
This remote doctor-patient consultation business model can be leveraged to reduce the waiting room times for first order health disorders, most of which can be sorted by a mere consultation with a physician.
Stat is a web and mobile application that helps providers and payers speed patient transport and lower costs by matching and dispatching idle transportation resources.
Aptly called uber for medical transport, this startup has received undisclosed funding from an investor, and is working tirelessly in reducing the average response time of ambulances’ deployment.
To qualify an industry for its ability to thrive as an ‘uber for’ business, we used the Mike Ghaffery’s framework, as discussed in our previous post here . Following are the three pillars of his philosophy –
- Standardization of service,
- Standardization of price &
- Ensuring speedy delivery of said good/service.
In each of the example above, the companies have hired third parties for vetting or hiring and training to standardize services across the industry.
Prices in this industry are fast changing to reflect the intended causality – that of market forces tending to a perfect competition, a consequence of reverse auction phenomenon. This leads to standardization of prices in long run. At last, speed of delivery is one area, where the first head start for their business operations happened! As these startups scale, time taken in delivery of said service would reach an industry wide equilibrium.
Take Teladoc for instance. They have more than 5 million members, and yet have an average response time of 22 minutes.
To me, it seems that the long due consumer empowerment has finally arrived in the healthcare industry , though 15 years later than others. In 2014 itself, as many as 85 million consumers with $600 billion in purchasing power may be shopping for their own health care, and in the process, transforming the status quo in favor of a better future.
With the industry boundaries fast blurring and newer entrants making ground-breaking innovations, health care industry has become ripe for disruption, and that incumbents must watch their step, for the change would neither be linear, nor gradual and the turbulence bound to ensue shall consolidate this market in the favor of those who’ve learnt from similar precedents in other industries.
When businesses must have first started adapting to this reform, they might have never imagined the sheer velocity and prowess of this change. It was a wave. One, which enabled the disaggregation of physical assets in space and time, creating digital platforms that make these components – service, goods or information – amenable to pricing, matching, and exchange.
The sharing economy revolution in healthcare delivery, coupled with a monumental shift in focus from volume to value has eroded traditional models, empowered individuals and democratized entrepreneurship to enable crowdsourcing of information, individual skills or assets. This sums up to create an ecosystem conducive to creation of such marketplaces at a rapid pace.
Some of the existing enterprises which fit this definition can be explored here –
- Doctors/Clinicians – Hospitals Marketplace
Health Gorilla™ is an online healthcare marketplace to connect all doctors and clinicians with over 9,000+ diagnostic labs and 35,000+ radiology centers. Founded by Steven Yaskin, this startup has raised $2 million in 2 rounds from 9 investors.
This emancipation has led to reduced prices for hiring, which in turn has helped the bottom line of healthcare enterprises, and would, in long run enable flow of these profits to the bottom of pyramid.
- Medical Devices – Hospitals Marketplace
Cohealo is an asset mobilization and analytics platform for the healthcare industry. They help hospitals use their non-emergency medical equipment more efficiently and save money on their future equipment purchases. Founded by Mark Slaughter, this company has raised $17 million in 7 rounds from 3 investors, and holds a promising position when you rope in Big Data, and the combined possibilities for improved IT infrastructure of hospitals and public health.
- Crowdsourced Safety Net
HelpAround is a help search engine that provides a crowdsourced, human “safety-net” for people who battle difficult life circumstances (e.g. a chronic condition, demented parent). The HelpAround crawler discovers relevant peers on the web, Twitter, Google Plus, etc, and creates a virtual “peer support network”, and makes them available via the HelpAround App for requests, advice, and emergencies. Founded by Shlomi Aflalo & Yishai Knobel, this company has raised $550 thousand in 1 round from 4 investors.
These marketplaces, work on the principle of reverse auction, a method which enables buyers to be sought by the sellers, thus resulting in reduced purchasing cost, increased market efficiency and access to a larger supplier base.
They operate and inhabit the paradigm of sharing economy village, wherein, the market forces drive a more personalized, accessible, and a valuable customer experience.
The core factors which must be done right to enable this experience for the customer and create this shift are – trust, collaboration & geographic proximity.
Of all things, trust factor or review layer is one thing which must be done right for people to get onboard for the want of authenticity and early adoption.
These marketplaces have enabled a review/trust layer, a payment module, a deployment algorithm which aligns with the goal of geographic proximity, along with an ability for consumers to take part in this sharing exercise on their own terms, a reason why this model has bode well with the fast changing ideals of our society.
Similarly, the curation models have come to play a crucial role in informing the decisions of the common man about their day to day health care issues.
These business portals thrive on the singular idea of trust – a reason for accelerated transformation of our economy. With businesses capable of sourcing trust from both sides of the market, they have made a newer degree of freedom possible, one which is powering this consumerization.
The ‘trust’ we’re talking about has now come to be measured in terms of reviews, ratings or recommendations from peers or other third party verification agencies.
One such successful model is Sharecare. Here, review or trust layer takes the center stage since information from trusted peers only is deemed worthy of action by users.
Shown in the left is a snapshot of how Shervin & Scott put the evolution of ‘our global village’ when on demand economy brings it to scale.
At Juggernaut, we strongly believe in investing ahead of where the market is today.
Which is to say, many people still don’t know if they need all services on the tap of a button, personalized doses of medicine or a health advice customized to suit their medical history, because they think all of this would mean fuss, friction and expense. But if you use our technology and make something fast and easy, consumers will come to appreciate it — and maybe even pay for it. So the upfront investment is worth it!
For the same reasons, we’re creating an ecosystem wherein people can create on-demand businesses or perhaps their own marketplaces, and help create a better world, one wherein people share more.
If you are planning to start something or looking for a technology partner for a solution that you are already working on, do get in touch and we’d be happy to assist you.