Telemedicine: Who will come out on top?

Actually, before we can address “Who will win the Telemedicine arms race?” we must establish whether it is a race worth winning in the first place.  

A true adoption of telemedicine practices requires a complete change in patient behavior, which is never simple to facilitate or realize. However, there are three main factors that I believe make this behavior change inevitable. First, consumers simply have an ever increasing comfort with technology. We have gotten used to banking online, using instant message customer service solutions, and FaceTiming friends and family.  Second, health care payers (including employers, private health insurance companies, Medicare, and Medicaid) are all desperately looking for ways to reduce expenditures. Payers are actively working to change their members’ behavior patterns as they would much rather pay for a $40 telemedicine visit, than an $1000+ ER visit. Finally, there is a widely acknowledge growing problem around the limited access to primary care physicians and psychologists. Telemedicine, allows all patients – regardless of geography or access to transportation – the ability to interact with a health care provider at the exact moment that they are seeking care.  Furthermore, that patient can return to the same doctor over and over again, establishing a true relationship, all from the comfort of their own living room.

However, even though the remote care segment of heath care shows clear signs of being the future for patient-doctor interaction, it is not clear which telemedicine solution will rise to the top of a fairly crowded field. Teladoc, the most senior player in this space, had an IPO this summer with a fully diluted market cap valuation of $758 million.  American Well, HealthTap, Specialists on Call, MDLive, and Doctor on Demand are all telehealth companies with substantial VC backing and promising value propositions.

So, the opening question remains: Who is going to come out on top in this extremely promising telehealth landscape?

I believe that Doctor on Demand will outpace all their competitors because they are superior at both creating and capturing value within the telehealth space.

On the value creation side of the equation, Doctor on Demand appears to have demonstrated an impressive ability to create demand for their telemedicine solution with patients who previously had never interacted with telehealth.  To facilitate this demand, Doctor on Demand employed an “Apple-like” strategy where the sole marketing focus was initially direct-to-consumer in order to build brand, customer awareness/acceptance, and establish a “customer first” product design approach. However, this strategy has allowed them to seamlessly pivot to a B2B strategy where they have the ability to work with payers that know the Doctor on Demand offering will be accepted, and at times requested, by their members. In this space, a B2B play is the ultimate value creation approach because one customer brings many members/patients onto the Doctor on Demand platform.  Additionally, Doctor on Demand has a wide array of health care service offerings available – they quickly expanded beyond just urgent care providers to pediatricians, psychologists, and lactations consultants. This expanded service offering presents more opportunities for patient interaction with Doctor on Demand and creates the opportunity for those same patients to return to the platform for different services.

On the value capture front, Doctor on Demand has the edge over competition due to their focus on creating the best possible experience for each and every one of their patients. This “experience focus” manifests in a superior technology platform and UI, highly-qualified and well-trained physicians, and a responsive and dedicated customer service team. The result is that Doctor on Demand has more 5-star App Store reviews than every other telemedicine app combined – not an easy feat to achieve. On top of this customer-centric focus, Doctor on Demand has a highly accomplished executive team and is backed by a knowledge board, dedicated VCs, and impressive rounds of series A & B fundraising.
Doctor on Demand has all the tools necessary to be the clear winner in the disruptive landscape of telehealth.


Does Google Monitor Your Carry-On? Digital Innovation in Travel Accessories


The Struggle of a Retail Giant: From Catalog to Clicks.

Student comments on Telemedicine: Who will come out on top?

  1. Great post KMY! I fully agree with your assessment of the success factors of the telemedicine industry and why Doctor on Demand looks to be on top. I would add a few elements to your analysis that will help telemedicine companies both create and capture more of this value:

    1) Partnerships
    In order to be truly successful, telemedicine needs to develop stronger partnerships with hospitals, insurance companies, and ancillary service providers such as Visiting Nurse Associations (VNAs), Patient Centered Medical Homes, (PCMH), and Skilled Nursing Facilities (SNFs). Telemedicine has great potential value for reducing 30-day readmissions rates (something that hospitals are assessed on publicly and nationally) and can, for example, reduce readmissions for congestive heart failure (CHF) patients from 20% to 4% in some instances. By working with hospitals and demonstrating their cost effectiveness in a quantitative way, telemedicine companies can integrate themselves more deeply into the fabric of these hospitals and their discharge processes. By partnering more actively with state-run insurance exchanges and increasing payer coverage of telemedicine services by demonstrating their value, they can further expand their reach, particularly as more Americans obtain public health insurance. For example, MassHealth only recently started to cover some telemedicine services, and there is a long way to go. Reimbursement is the main reason many hospitals have not set up telemedicine programs. Finally, many patients are discharged with home health care (visiting nurses who provide care at a patient’s home) or to a skilled nursing facility, and telemedicine companies can increase their value capture by partnering with these organizations to offer set-up of telemonitoring devices (scales, blood pressure machine, oximeter, glucometer, etc) as well as encourage patients to input their vital signs daily and help them track their progress.

    2) Expansion
    Many low-income patients are automatically excluded from being able to participate in telehealth programs given a lack of smartphones, internet access, language barriers, and secure housing in which to store telehealth equipment. Innovating to find alternate methods to include these patients in telemedicine programs can significantly expand the number of patients reached by telemedicine, as well as substantially improve population health outcomes for those marginalized citizens who need it most. Telemedicine companies should also think about taking their services globally – one of the most effective tools in the recent Ebola outbreak in West Africa could have been telemedicine, which would have helped physicians assess patients for Ebola symptoms without risking exposure of other patients and citizens to the virus as they traveled long distances to health centers or remained in waiting rooms in healthcare facilities.

    3) Humanity
    Telemedicine capitalizes on the increasing digitization of our generation and globe. However, healthcare remains the industry that renders people the most vulnerable, afraid, and uncertain. Telemedicine companies must be careful not to digitize all the way and lose the human element of healthcare. Telehealth monitoring for cardiovascular and mental health patients has shown to be clinically most effective when a mix of technical remote monitoring and human contact is used (i.e. daily or weekly phone calls to remind patients to input information and discuss health status, visiting nurses discussing patient progress, creating ways for patients to talk to healthcare providers live when they need to, etc). These companies will need to find the right balance of digitization to generate true cost savings, improved health outcomes, and increased patient satisfaction.

  2. I agree completely that Doctor on Demand is best positioned within Telemedicine right now. How do you think the industry will adjust when or if large healthcare players enter the market? Will Doctors on Demand have the consumer loyalty at that point to shape the regulatory framework since they shifted so early to B2B (while of course continuing in the directo to consumer business), or will large companies with lobbying organizations and knowledge of state differences, together with large IT budgets be able to compete once they enter the market?

Leave a comment