Zocdoc – Trust Above All Else
Zocdoc: Giving Power to The Patient
Overview
Zocdoc was founded in 2007 with the mission to “give power to the patient” as part of an ultimate goal to improve the patient experience. While quite a broad mandate, Zocdoc’s current goal is to develop solutions to better “unite modern patients and doctors”. (1)
The idea came about after one of the co-founders had to wait 4 days to see a doctor after rupturing his eardrum on a flight home from a McKinsey consulting engagement. One man’s pain point – long wait time to see a doctor – was actually representative of a major issue patients face throughout the US. (1)
Since uncovering the major issue of long lead times to see doctors, Zocdoc has been laser focused on pairing patients and doctors in a timely and simple fashion. Today, Zocdoc’s web and mobile platform, supported by a team of 600 employees, helps thousands of users search and seamlessly book appointments through Zocdoc’s database of 30-40,000 doctors in all 50 states (2).
Business Model
Zocdoc operates a two sided network that pairs patients and doctors with one another. Zocdoc creates value for patients by providing:
- A platform to see doctors’ availability and book appointments online, simplifying the booking process and reducing the average wait time before seeing a doctor
- A closed-loop, verified review system to help patients make informed choices about their health care providers
- A way to fill out forms before getting to the doctor, reducing time spent in waiting rooms
- Other ancillary services, such as tailored reminders, to streamline the process of seeing a doctor
On the other side of the network, Zocdoc creates value for doctors by:
- Driving additional traffic through doctor offices
- Providing replacement patients for the 10-20% of appointments that are made and cancelled within a day or two of the appointment (3)
- Improving the customer experience with that doctor by streamlining patient bookings and check-in processes
- Providing a platform for soliciting patient feedback and tailoring services / experience to better suit patient needs
Although both sides of the network are critical for its success, Zocdoc always prioritizes the patient over all other parties, including itself. Zocdoc provides patients free access to the network and captures value for itself by charging doctors up to $300 per month to be a member of the network.
Operating Model
Zocdoc’s main assets are credibility, the network of doctors, and its employees. Zocdoc has simultaneously built and deployed each of these assets in order to drive the most value possible for patients.
Credibility: By far the most valuable asset and the one that Zocdoc a) strives hardest to continue building and b) protects at all costs. From the beginning of the user experience, Zocdoc establishes trust and transparency with the patient. The only information you must provide in order book an appointment is your name, email, sex and date of birth. You can opt-in to giving additional info in order to take advantage of other services, but it is by no means necessary in order for the patient to receive value from Zocdoc. By creating a viable product that allows the user to slowly gain comfort with Zocdoc, the company is operating in a way that prioritizes the customer, and does not treat collection and monetization of data as a way for Zocdoc to capture value.
In addition, the closed loop review system is another way of building trust with the consumer, as well as with doctors. The comment vetting process delivers “useful, representative, and reliable” reviews to consumer and protect doctors, at the expense of being labor intensive.
Network of Doctors: Although the platform’s highest goal is to deliver value to consumers, the overwhelming focus of their sales and market efforts is directed to adding doctors to the platform. Rather than focusing on selling a product to consumers, they are creating the best possible product/user experience, and relying on word of mouth and user engagement to drive growth of patients.
Although Zocdoc is a tech company and wants to provide value to “modern patients and doctors”, the company is not afraid to utilize “old fashioned” operations to achieve their goal, including a labor intensive, non-digital sales and marketing effort to attract doctors.
Lastly, Zocdoc has resisted the urge to move too quickly and try to be too many things to too many people. They can’t transform and modernize healthcare unless they do their first task well, which is creating a viable network for doctors and patients. If they do that, they will build trust with patients, the most valuable asset they can have, their opportunities are endless. As Klosla Ventures states in contrast to other less successful healthcare start-ups, Zocdoc was “focused and specific, and its strategy is to get a foothold in health care, gain credibility, and go from there.” (3)
Sources:
- 1) Zocdoc website and company blog.
- 2) Company does not disclose number of appointment bookings or number of doctors. Range of estimates based on articles and analysis based on sampling of # of doctors whose names start with specific letter)
- 3) NYTimes: http://bits.blogs.nytimes.com/2012/01/30/lessons-from-zocdoc-a-health-tech-start-up-that-works/?_r=0
- 4) Glassdoor
Thanks for the very clear articulation of both the patient and doctor angles for the two-sided platform. How do you see ZocDoc growing as they scale? Would they be entering any adjacencies?
What sort of products has Zocdoc focused on cross-selling to consumers down the line? How much of their current revenue do they make in advertising versus doctor subscriptions?
Thank you, Cary. I agree that the main value proposition for doctors is your first point – driving additional traffic to their offices. Unfortunately, however, I have often found that doctors do not provide complete visibility to their schedules on the Zocdoc website, despite the ability for patients to specify whether they are new or existing patients. After trying to schedule one or two appointments myself and not finding a time that fit my schedule, I quickly learned that I could call the office and would be given many more convenient options from which to choose. As a result, I have not accessed the Zocdoc website since, and I fear that many patients might similarly use Zocdoc to find new doctors but abandon it once satisfied. Do you think there is a way to incentivize doctors? And to keep patients coming back?
This is a great post about another successful marketplace business using software to alleviate pain points. While ZocDoc operates within the fee-for-service healthcare reimbursement model, the company’s reviews section allows patients to comment on the quality of care they receive. In addition to giving ZocDoc credibility and trust with consumers, reviews also allow consumers to make assumptions about the quality of care they will receive before booking an appointment. As the healthcare system in the U.S. continues to evolve away from a fee-for-service model and towards quality-based reimbursement, it will be interesting to see if and how doctor reviews have a place in this new reimbursement model.