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American Well is a healthcare IT provider having an Online Care technology innovation that enables physicians to render care to patients online. Through this technology, non-emergency patients can easily reach out to their physicians concerning health issues via online or by phone. It allows patients to gather advice related to health without leaving their homes. Ido Schoenberg and Roy Schoenberg, the company's co-founders, see this as an opportunity to decrease care delivery costs and can ultimately provide a better healthcare delivery system. Despite its benefits, however, in November 2009, only three insurers have accepted the technology although American Well looks forward to more over the next 12 months. The company is now looking into other growth options.
Elie Ofek; Ron Laufer
Harvard Business Review (510061-PDF-ENG)
March 30, 2010
Case questions answered:
- Do you share the assessment of the founders regarding the potential of online care to revolutionize healthcare delivery?
- What value do you see “Team Edition” creating? What barriers to its adoption do you foresee?
- Which of the new market opportunities do you see as most promising?
- If you were in the shoes of American Well Management, would you pursue any of the next-generation options (products or markets) in 2010, or would you just focus on the core platform with the core target market?
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Case answers for American Well: The Doctor Will E-See You Now
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In a Challenging Healthcare World, American Well Thrived.
Traditional Healthcare Scenario
In the world where the only way for a patient to see a doctor was through the emergency room, through a similar acute-care facility or through fitting themselves to the physician’s schedule, Ido and Roy tweaked the norms for good. They exploited technology to redefine the how healthcare sector operates.
In an industry reaching a 4.3 trillion expenditure, satisfaction comes out as a service defining parameter. Players on one end of the spectrum, the patients, justify the service’ by the time, quality, and efficiency of treatment they get which made the USP for Ido and Roy’s American Well. They opened up a new way of doctor-patient interaction which was time and quality efficient.
The Health care market at that time consisted of a few prominent players namely, patients, providers, payors both public and private, and suppliers. Services being offered by these players posed various challenges making the function of the system more tiresome and tedious.
Financial and operational constraints, insufficient access to care, coverage requirements, reimbursement limits, out of pocket expenses, rural constraints, regional health care constraints were many of the pressing issues at the time when the aforementioned players struggled for a balance. Resolution to which the American Well presented a structured and direct approach.
Involvement of IT: Easing into E-mail communication
E-mail became the breakthrough to the first Techno-Healthcare world. With 74% of respondents wanting to use e-mails as a medium of communication, only 4% was the conversion rate as such service was not offered. With a significant reduction in on-call appointments and relatively quicker communication between the patients and doctors, the latter were still reluctant to use it as a means.
With a dicey mindset that it’ll increase their workload and the service not being covered under insurance, the “e-mail-doc” soon was proven ineffective in solving the problem. The last spark of e-mail-doc died with the HIPAA (Health Insurance Portability and Accountability Act) issue, bringing in security concerns of patient’s information. Even, revision of the act in 1996, with technological advancements in purview, couldn’t win back its credibility.
Coded payment methodologies were based on fee-for-service and so was the adoption of the newer technology by the physicians. American Well was faced with strong competition too. RelayHealth, automating the traditional process; Medfusion, giving a virtual suit experience for the patients to interact with physicians; TelaDoc, giving patients option for round the clock services; Cisco TelePresence, kicking it up a notch with a video conferencing setup for tech-based interaction, gave Ido and Roy a purpose to better their product.
Advent of American Well
With experience in managing major companies in the health care sector and a strong belief in the potential of technology to make improvements in the existing health care services, Ido and Roy figured out the gaps which could be bridged with the help of IT. They realized that people were still under the impression that the internet was about redistribution of medical records, as the trend was going on but it was also about redistribution of medical services. Ido and Roy decided to capitalize on this opportunity!
They focused on the constraints being faced by the health care industry and devised methods to overcome them. They ensured that the process from the beginning i.e. the patient login- to the patient’s treatment, in the end, is carried on in a smooth, user friendly, and…
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