06 Jan Non-Consumers: Why American Well Will Do Well
Consumer (kən-sū’mər) n. .
- Ultimate user of a product or service.
- One that consumes, especially one that acquires goods or services for direct use or ownership rather than for resale or use in production and manufacturing.
I have been following American Well for the last year and have spoken at several conferences with CEO Roy Schoenberg. American Well is Act II for the Schoenberg brothers who had a successful sale of their first company CareKey to Trizetto for $100M dollars (imagine Dr. Evil saying that!) back in 2005. Beside the immaculate dress and German accented baritone voice that had a couple of my conference colleagues swooning, Roy has a clear and compelling business proposition with American Well: utilize technologies to help patients seeking care to connect to physicians willing to provide care.
Essentially, a consumer utilizes a simple web interface to enter in basic health information to establish the reason for the request to see a physician. An intelligent “black box” (proprietary American Well technology) engine sits between the consumer and a pool of physicians on the other side of the transaction. The black box routes the consumers information to the appropriate physician on the other side, who has made herself available, has a profile that matches the patients problem (specialists can also use the system), and can make the determination whether or not they want to see this patient. Having determined to proceed, the physician accepts the requests and begins to interact with the patient via voice, video, chat or whatever combination makes sense.
Besides the above electronic connection mechanism, the “black box” also provides the functionality for the patient to pay for this visit (in the form of insurance/credit card), for relevant health information to be reviewed (provides for interfaces to EMR/PHR via Microsoft Healthvault, Aetna ActiveHealth, etc), and for accurate documentation and followup information to be both recorded and shared with both the patient and any relevant providers.
American Well fairly quickly ran up against the traditional regulatory hurdles that have held back telemedicine for decades – namely the regulation against practicing across state lines (internet making time and geographic boundaries irrelevant), the question of licensing physicians, the challenge of liability, and of course figuring out who is going to pay for this (consumers, employers, or plans). I am happy to see that they smashed through most of these road blocks (innovation at work!) with the following:
- Telemedicine – hold off on the cross state thing by focusing on one state with an obvious need for and bias toward telemedicine: The Island State of Hawaii – brilliant! This gives them time to get some experience while dealing with the other 49 states. Of necessity, I believe American Well will have to develop a core competency in physician licensing.
- Physician Licensing – instead of having a multi-state pool of licensed physicians, why not focus on the physicians who are already licensed in the state and furthermore are already approved by the payer? Plenty of “paneled” physicians have pockets of downtime where they would be interested in leveraging their skills to see a few more patients. Essentially, American Well is tapping into the “cognitive capacity” of physicians who are not seeing patients but could be if it were convenient, compliant, and cash generating. Bingo.
- Liability – Web based telemedicine introduces a range of new and complex liability issues. However, American Well has solved this by going to one of thee largest (although recently tarnished) malpractcie insurers and obtaining a first of a kind policy for practioners utilizing telemedicine to see patients. Given the nature of the online interaction and the supporting platform, the coverage is small enough to typically be covered for by the payers instead of the physicians. Solved!
- Payment – will consumers pay for this service without being “tethered” to a health plan? Who knows, but American Well will hedge their bets by selling the service through health plans on a PM/PM as well as a per transaction and offer it for $10 co-pay (but with limits on number of calls) to health plan members or a non-member price of $45 (best of both worlds on both front). Bravo!
The naysayers will come out in force against this in terms of diagnostic capabilities of this type of system, liability/quality issues, access issues, and a host of other reasons why it can’t work or can only work in limited environments. To be candid, in most cases they will be right that it is not the best for diagnosing complex things, there are interesting liablity and quality of care issues, and the nuances of this type of system are unknown. However, there is a wide range of current non-consumers of health care or just in time health care services that will find this solution absolutely compelling. Further still, this type of offering, and the others variations that will surely expand (TelaDoc) or become platforms (HelloHealth) themselves are good enough for an entire range of people who don’t have other options or find these new services “good enough” to accomplish the job they are trying to do.
And that, my friends, is the very definition of Disruption Innovation.
So Aloha, American Well, we look forward to seeing you on the mainland soon.