ZocDoc: Finding a doctor when you need one!

Patients wait an average of 24 days to schedule an appointment with a doctor in U.S. cities.  This is a 30% jump from 2014 and has been driven by doctor shortages, aging baby boomers, and greater insurance penetration (thanks to the Affordable Care Act).  In Boston, the average wait time was 52 days to schedule an appointment with specialists like cardiologists, orthopedic surgeons, or gynecologists.[1]  In 2007, ZocDoc was born to improve access to healthcare.

How does ZocDoc create value?

ZocDoc is a two-sided digital platform that allows patients to search and view the available appointment times of doctors online and book them instantly.  The ZocDoc platform allows patients to search based on the doctor’s specialty, location, insurance coverage, and profile reviews.  Appointment booking is not just online but also via iOS and Android apps.  Doctors, in turn, can choose to be listed on ZocDoc and allow the platform to access and integrate with their digital calendars so that their updated calendars can be viewed by patients in real-time.  ZocDoc is essentially a Yelp for doctors with the features of OpenTable.

Therefore, ZocDoc has created value for both patients and doctors:

  • Enabling patients to book doctor appointments within 24 hours: wasting less time in visiting a doctor could mean early detection and cure for patients and lower healthcare expenses.
  • Increasing doctor utilization: while doctors are often booked for weeks, their utilization is 60-70% because of last-minute cancellations and no-shows[2]. By helping doctors see patients whenever they’re available, ZocDoc allows them to distribute their fixed costs over more patients.
  • Reducing administrative costs for doctors: ZocDoc’s insurance checker helps doctors pre-verify a patient’s health insurance. Because administrative processes such as getting insurance information from patients are time-consuming and constitute ~15% of healthcare expenses, ZocDoc improves profitability for doctors.[3]

How does ZocDoc capture value?

ZocDoc is valued at over $2B[4].  It does not charge any fee from the patients.  Instead, it charges $3,000 annually from listed doctors. As of August 2015, ZocDoc had over 49,000 listed doctors. That translates to revenues of $147M in 2015.  ZocDoc offers its services across the U.S., covering 60% of the U.S. population[5].  Analysts estimate that the company has been profitable in all markets it has been operating in since 2013[6].

Apart from charging listing fees from doctors, ZocDoc captures value in two other ways:

  1. B2B vertical: In June 2014, ZocDoc launched a premium service that employers can offer their employees, called ZocDoc for Business. This was ZocDoc’s first offering for employers, whose names include Foursquare, Gilt, IAC, Jefferies, NASDAQ OMX, and Quirky.[7]
  2. Advertising by doctors: In November 2017, ZocDoc introduced sponsored results, a feature that allows doctors to increase their visibility to patients – similar to sponsored results on Google.[8]

How did ZocDoc scale?

ZocDoc was able to overcome the “chicken-and-egg problem” of multi-sided platforms through a strategy that many of us followed in the class simulation – it gave the platform free to patients and charged doctors (more over time) as patients on the platform increased.  Today, ZocDoc’s platform has reached over 6M patients.[9]  ZocDoc’s strategy succeeded and it was able to scale because it took advantage of the high indirect / cross-side network effects in this market.

More doctors on the platform will attract more patients because they can then find a doctor of their choice / in their insurance network / close by easily.  More patients on the platform will attract more doctors because they can then improve utilization and reach more patients.  Therefore, by offering the platform free to patients, ZocDoc attracted them and once the platform had patients, the doctors came aboard with a willingness to pay, and so on the cycle continues.

How does ZocDoc build a defensible platform?

When ZocDoc launched, it was one of select few multi-sided platforms for patients and doctors.  Today, ZocDoc’s competitors include DocASAP, One Medical, DocPlannr, Doctoralia, Kyruus etc., each of which has tried to differentiate its product through unique platform features.  For example, Kyruus allows patients to book appointments on the doctor’s own website as well if the patient wants.[10]  Therefore, ZocDoc will face increased competition in the future and because of the nature of the service, there be high-multi homing as well – doctors will cross-list on multiple platforms and patients will also book through whichever platform they prefer.

To protect its user base, ZocDoc must try to incentivize doctors (especially the highly rated ones) to exclusively list on its platform.  Building the strongest doctor coverage in specific geographies could also serve as a defensible barrier in those geographies.  Additionally, ZocDoc will need to build more value-added services, such as the insurance checker, to raise the switching costs for both doctors and patients.



[1] Doctor Wait Times Soar 30% In Major U.S. Cities, Bruce Jaspen, Forbes, March 19 2017, accessed 5 March 2018, https://www.forbes.com/sites/brucejapsen/2017/03/19/doctor-wait-times-soar-amid-trumpcare-debate/#6f03ceb92e74

[2] Zocdoc’s CEO thinks you should be able to see a doctor within 24 hours, Jonathan LaMantia, Crains New York, April 11 2017, accessed 5 March 2018, http://www.crainsnewyork.com/article/20170411/HEALTH_CARE/170419980/zocdocs-ceo-speaks-with-crains-about-appointment-scheduling-a-nightmare-for-patients-in-the-health-system

[3] Zocdoc appointment booking app now verifies insurance with AI, Bill Siwicki, Health care IT News, October 25 2017, accessed 5 March 2018, http://www.healthcareitnews.com/news/zocdoc-appointment-booking-app-now-verifies-insurance-ai

[4] THESE STARTUPS ARE MAKING PEOPLE ACTUALLY WANT TO GO TO THE DOCTOR, Joe McGauley, Thrillist, 2 June 2017, accessed 5 March 2018, https://www.thrillist.com/tech/nation/zocdoc-forward-one-medical-group-doctors-appointment-startups

[5] ZocDoc Joins The Unicorn Club (Officially), Connie Loizos, Tech Crunch, August 20 2015, accessed 5 March 2018, https://techcrunch.com/2015/08/20/zocdoc-joins-the-unicorn-club-officially/

[6] Billion Dollar Unicorns: ZocDoc Should Be Able To Withstand Public Market Scrutiny, Sramana Mitra, December 1 2015, accessed 5 March 2018, http://www.sramanamitra.com/2015/12/01/billion-dollar-unicorns-zocdoc-should-be-able-to-withstand-public-market-scrutiny/

[7] ZocDoc gets $130 million to go beyond doctor appointment booking, Jonah Comstock, Mobi Health News, August 21 2015, accessed 5 March 2018, http://www.mobihealthnews.com/46245/zocdoc-gets-130-million-to-go-beyond-doctor-appointment-booking

[8] Introducing Zocdoc Sponsored Results, Liz Bedor, ZocDoc, 3 November 2017, accessed 5 March 2018, https://www.zocdoc.com/about/blog/for-doctors/zocdoc-sponsored-results/

[9] Doctors will have to be more like actors as A.I. gains momentum: Zocdoc CEO, Christina Farr, CNBC, 11 Jan 2018, accessed 5 March 2018, https://www.cnbc.com/2018/01/11/zocdoc-ceo-doctors-of-the-future-will-have-a-higher-eq.html

[10] Need a doctor’s appointment? Click it, Rachel Arndt, Modern Healthcare, May 17 2017, accessed 5 March 2018, http://www.modernhealthcare.com/article/20170517/TRANSFORMATION01/170519859


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Student comments on ZocDoc: Finding a doctor when you need one!

  1. Great post! I wonder if ZocDoc could form a partnership with insurance companies to gain exclusivity with doctors. I wonder if there are ways to streamline the reimbursement process, payments, and scheduling check-ups to make it more sticky for doctors as well.

    1. That’s an interesting thought! Totally agree with you that ZocDoc could (and should!) form partnerships with payers. It would be value creating for insurers and patients because patients would get an added tool using which they can easily find in-network providers, which is often a painstaking task initially, and thus be more sticky with the payer. Additionally, ZocDoc would become more sticky for patients too!

  2. One potential criticism I have for ZocDoc is that it lowers patient switching costs across doctors, which can create a negative experience in the long run. It definitely addresses the pain point of long wait times to reach doctors, but patients who only select doctors based on availability and convenience may jump around among providers, to the detriment of sustained and consistent care. I found myself jumping around among dentists to accommodate my schedule but it led to a worse overall experience because I had no continuity of care.

    1. That’s an interesting point! I agree that continuity of care is important, which is why patients are typically loyal to their providers. But don’t you think that you could use ZocDoc to easily check when your preferred provider is free as well? I’m sure checking whether your preferred provider was free or not at a particular time before ZocDoc was more cumbersome. Moreover, ZocDoc is not forcing anyone to choose one provider over another. Having said that, the worse overall experience you faced, while not ZocDoc’s full responsibility, will be attributed to ZocDoc, just as you did! Which basically means that they need to figure out a way to help patients ideally be routed to their preferred providers or suggest providers which are similar in nature perhaps to them. Thanks for your thoughtful comment!

  3. Thanks for the post! As a frequent ZocDoc user, the move to incorporate sponsored results left a bad taste in my mouth. When it comes to an industry like healthcare, I believe that customers have a lower tolerance for promotional listings as they calls into question the real quality of the clinician. If the doctor was already doing a good job, why would he or she have to buy promoted listings? If they purchased the listing rank, could it be that they also faked some of the positive reviews? What are your thoughts on the impact of sponsored results on the customer experience? Do you think it gives the customer another reason to multi-home?

    1. Thank you for your comment! Fully agree that it can feel sketchy but I think it may not be as bad as you think. For example, just because a drug is advertised on TV doesn’t mean that everyone will think that it is not as good, right? Having said that, I fully agree that clinicians shouldn’t market too much – though creating awareness about their services is fine. Where that line is drawn though is will make a for a good debate between clinicians and ZocDoc! One way to do it might be customer segments – only do sponsored adverts for new customers on the platform, perhaps? Maybe that will feel less icky as new customers may appreciate sponsored results as they are learning how to navigate the platform?

  4. Great post! Something that I think is dangerous for ZocDoc, is that there isn’t really any quality assurance for the users. There’s the rating system, but for a doctor, a star rating system (a la Amazon) isn’t that assuring for something that is so personal. There also remains a lack of transparency around pricing of services.

    From a user standpoint, I had a poor experience where I rated a dentist under 2 stars because of a painful experience, and ZocDoc’s system wouldn’t let me comment on my experience. It seemed I could only comment if I rated it 3 stars or above. The company is only allowing users to provide feedback for doctors/dentists they’ve had a positive experience with, which isn’t helping to highlight low quality doctors. Additionally having had one poor experience, I never used ZocDoc again. I think if proximity is the only thing you care about ZocDoc is a valuable proposition, but they haven’t nailed quality, and this has a negative impact on network effects too.

    1. Super interesting, thank you, Laura! Had no clue about this and it seems ridiculous! Why would you not allow text reviews for <= 2 stars! They should enable it for sure. You're totally right – not allowing it makes the platform seemed rigged somehow to be biased towards a good NPS. I am truly surprised by this and can' think of any reason why they would not allow negative text reviews. In fact, if I were ZocDoc I would eliminate doctors from my platform regularly if they fell below a particular rating!

  5. Great article! I have always been a fan of efficient/fast healthcare and feel like there is a lot of value that can be captured in the process as illustrated in this article. While in college, I used a similar platform called ZoomCare which essentially is an on-demand urgent care, primary, and specialty care clinics that made it quick and easy to find and book appointments online. As new incumbents enter the market it will be interesting to see how sticky patients actually are. I am assuming platforms will have to compete on quality doctors (reviews), availability, and convenience. The more small clinics they are able to establish the more market share they will be able to gain.

    1. Completely agree with you! It will be very interesting to see how ZocDoc competes with the newer players and what barriers to entry is it able to build to prevent multi-homing. I think partnerships with other players in the healthcare ecosystem who can make the patient experience better and more depth and coverage of doctors in specific geographies may be a good starting point. Thank you for your comment!

  6. Thanks for an interesting read! On the point of building more value-added services, I wonder they could offer consultation services by phone or email so patients are more likely to stay in the platform once engaged in conversations with doctors. Other than that, in other countries, I’ve seen examples whereby the platform offers ranks or medical tips on top of appointment services, increasing the use case and stickiness of the app.

  7. Great post! I wonder if there are ways to make ZocDoc more sticky to users by offering other value-add features. One idea could be by aggregating patient electronic medical records gathered across different ZocDoc doctors that the patient has visited to provide patients with a one-stop-shop for viewing their healthcare information. Although a barrier to achieving this would be obtaining such records from providers, medical record availability may become more ubiquitous as patients start to demand more of their data.

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