KRY: Adressing rising healthcare cost with platform technology
Swedish telemedicine startup KRY connects the right doctor with the right patient at the right time.
The rising healthcare cost in the U.S. has become a major topic of discourse in the political arena. It is projected that between 2018-2027, healthcare spending in the U.S. will increase from 17.9% of GDP to 19.4% of GDP [1]. Digital innovations are widely seen as a potential measure to keep healthcare expenses manageable. One of these innovations is advanced telemedicine—the seamless connection of the right doctor with the right patient at the right time. The Swedish startup KRY (also known as Livi) is one of the market leaders in that space [2]. The company is not the only upcoming telemedicine provider, but it perhaps best understands how to manage the complex regulatory environment.
KRY connects healthcare professionals with patients via a digital platform. This platform matches patients with doctors based on a small questionnaire filled out by the patient regarding his or her symptoms, and some basic information on the doctors’ fields of expertise. Doctors can review the questionnaire and the medical history of patients before the appointment and can already make recommendations and referrals to specialists. KRY facilitates the appointment via an encrypted video chat, which feels very similar to the in-person experience. Video appointments typically take 15 minutes and result in prescriptions, recommendations for lab tests, or referrals [4]. After the appointment, patients can give feedback, and doctors add any new information to the patients’ medical records stored on the platform.
KRY creates value by taking inefficiencies out of the healthcare system. Usually, patients go to doctors nearby who might not be specialized for the patients’ conditions, or simply do not have the capacity for an additional patient. As a result, patients receive wrong or late treatment, some doctors are overworked while others have spare capacity, and the system is stuck by unnecessary referrals.
By using KRY, doctors, patients, the healthcare system, and even the economy benefit. KRY allows doctors to offer appointments while being at home or on vacation. This improves doctors’ general work-life balance and enables them to make use of any spare capacity. Patients save travel time and the cost of an in-person appointment, or they can even replace cumbersome home visits. Additionally, patients who often feel overwhelmed by the healthcare system have the opportunity to provide direct feedback on their experience after each appointment. By matching patients with the right doctors, unnecessary referrals are eliminated, and healthcare resources are used where they are really needed. Finally, the time before work or on lunch break can be used to speak to a doctor instead of taking time off. This decreases the rate of absence from work and benefits the general economy.
KRY’s platform is innovative in the sense that it best maneuvers the challenging regulations around the patient doctor relationship while providing a simple user interface and high-quality service. For example, in Germany, doctors cannot use KRY to write prescriptions which need to be covered by statutory health insurance while, in Sweden, doctors cannot write sick leave notes. KRY is on top of all these regional differences and educates participants about potential limitations. Additionally, the company is fast when it comes to regulatory changes. Only months after the German government eliminated regulatory hurdles for telemedicine, KRY launched its services in the country.
The platform is still in a stage of growth, trying to fine-tune its business model. At the moment, patients seem to be charged a flat fee per consultation (e.g. $25 in France; see [5]) which differs across geographies. Typically, the fee is reimbursed by patients’ health insurance [5]. 400 clinicians joined the platform since inception [4]. These clinicians are supported by healthcare professionals who are on the company’s own payroll. It seems that the company focuses on attracting patients who are willing to pay for the service and expects doctors to follow once a certain number of patients have signed up. Interestingly, KRY recently announced that it plans to open physical healthcare practices in Sweden, France, and the UK [6]. While this move seems counterintuitive, the company explains that it wants to improve efficiency along the whole healthcare journey for patients who often need to see a doctor in person after the initial conversation via video chat [6]. This would further increase switching cost for patients, and would establish a closed KRY healthcare system within the already existing healthcare system. Opportunities for KRY to capture value would be enormous.
It remains interesting to see if KRY can develop into a true, two-sided platform without own healthcare personnel, and how the move into physical practices might affect its digital service model, if at all. KRY is definitely trying to establish a platform in one of the most heavily regulated markets. Making change in healthcare is difficult and takes time, but once a company or practice is established, these challenges play to their own advantage as customer are locked-in for the long-term.
[3] https://www.pgpf.org/blog/2019/03/why-are-americans-paying-more-for-healthcare
[6] https://www.insidescandinavianbusiness.com/article.php?id=278
Very interesting post; thank you for writing it. Reading this I am struck by a few questions. First, I wonder if there are different in health outcomes between services rendered in informal settings (through the app at home, on vacation) vs. services rendered in more formal settings. Second, though the cost per visit may be lower, I wonder if reducing the barriers to service increases utilization (people calling in for things they would ordinarily deal with themselves) and thus actually increases total spend on doctors visits?
How is the company addressing quality in the healthcare service. Can customers provide reviews?
Moreover, can customers choose the doctor they want? This would seem to be an industry where individuals might feel more comfortable choosing their service provider as opposed to being automatically matched to one.
That’s extremely exciting space, thanks for the post!
I’m very curious about how the product features for direct visual observations are designed. This is possibly the main barrier for platform adoption because it’s one of the very basic tools of modern medicine. The governmental regulations exist for a reason in this case.
Overall I can’t wait when technology will break this barrier and hospital visits will become rather an exception.
Very interesting post. The patient-doctor relationship is very specific, but it might be reshaped by technology. My doubts concern mainly the articulation value capture model. Are “flat fee per consultations” the right way to value medical expertise? Will this platform attract only low-quality doctors?