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Case: American Well

Most promising new Market Opportunities.

The delivery networks of hospitals, health clinic chains and other provider systems, according to us, are the most promising new market opportunities that are available now which can be used to achieve higher medical process efficiency and reduced costs. The owners of American Well want to expand their business sector from traditional health care system to a new health care system which adopted the usage of internet and telephone to connect physicians and patients. In this business model; excess demand was match with excess capacity (patients match with doctors). In the next generation of service, Team Edition would connect the PCP and specialist instantly during the patients initial office or online visit. The next logical step is to extend this service to the actual medical scene of hospitals and clinics which suffer from acute demand-supply discrepancy. A hospital gets many patients with non-emergency ailments which tends to eat into the time that should have been utilised for emergency cases. With online care systems it is easier to handle these nonemergency cases effectively and provide the required healthcare solution to the emergency cases. With respect to the Retail clinics, it is often the case that it is manned by mostly a general medical practitioners most of the times. When a need for a specialist occurs, it is often not available due to geographical or economic constraints. An online care kiosk would be a great tool to get access to quality healthcare through specialists for any medical ailment. Adding an additional pharmacist support to the existing healthcare service would provide an additional incentive to the patients (this can also be thought of as a separate market opportunity). With Online Care for insurance companies, it appears like a logical progression to extend the service to the hospitals and retail clinics, as this would help the patients associate Healthcare with American Well, which will be great addition to its brand name. With American Well present in every aspect of healthcare from insurance to hospitals to pharmacies, it will gain a stronger foothold in the Health Industry which is what Ido and Roy Schoenberg aimed at. This comprehensive knowledge of the Healthcare industry will also help when American Well forays into International market opportunities as they could then modify the organisational structure to suit the international requirement similar to what it was.

Analysis of Value of Online Care

A. Strengths, Weaknesses, Opportunities, and Threat (SWOT) Analysis
American Well is still in the process of getting established into the market. Company has been performing good since its beginning, they now need to expand their services and build a position in market, for this the company needs to identify and leverage their strengths and at the same time it has to work on the weaknesses as well. Then only they will be able to fully utilise the opportunities available to them. Strengths First mover advantage in the US market, can leverage this fact in introducing improved services (like Team Edition) in the market Utilize the demand-supply gap for physicians and specialists to expand their business of online care services Substantial reduction in cost for patients as well as insurance companies of up to $3.36 per patient per month(exhibit 9)

Proprietary software as the intellectual property gives a competitive edge Targeting non-members of insurance companies for services at a premium Team Edition is more effective in bringing down the associated legal barriers Weaknesses Possible conflict of interest in approaching insurance companies and other delivery network markets like retail clinics, hospitals simultaneously. Resource constraints over international business expansion Not a big brand name yet, will have to work on that Facing opposition from insurance providers in terms of overutilization of health services, more work for doctors and authenticity of treatment without any physical test. Doctor's apprehensions with respect to increased workload, non-payment by insurance companies. Opportunities Online communication between doctor and patient due to the lower costs is an attractive proposition. With the use of online care services , the legal barriers would be dissolved and patients as well as specialist would have easy access to each other. Tremendous potential in international markets, as restricted medical care is the norm almost everywhere. Application of the online model to fields like legal advisory and accounting services provides scope for business diversification. Threats Business expansion at right time and with right strategy, failing which will allow its competitors would seize the available market opportunities Security and privacy threat for the confidential medical reports of patients

B. Porters 5 Forces
Porters 5 Forces High Low Industry Competitors Potential Entrants Availability of substitutes Buyer power Supplier power Industry Competitors-High There are several other firms which are offering similar online health care facilities to their client. Although the number of competitors in the market are less but whatever firms are there, they are big firms and have a tendency to invest heavily into the business making them strong competitors . Firms like CISCO , RelayHealth are already well established brands in the market and these companies entering into the market of online health care would create a tough competition Potential Entrants-Low Its very difficult for the new player to enter into this market, as the initial investment required in creating the technology/software is very high , American Well itself spent $70 million to create one technology to

ease the communication between patients and physicians. Moreover, meeting the expectations of people is really difficult as they have a particular mindset, changing that mindset would be a difficult task for new entrants without having prior connections in the market Availability of substitutes-High The traditionally methods of physically visiting the physician still prevails in the market. Although these methods involve more expenditure and longer waiting time but still people visit the doctors specially in the areas where there is surplus supply of physicians. Apart from these traditional methods, various big companies have also started online health care facilities for their clients. TelaDoc provide a service to the patients by which they can connect with the physician whenever they want through telephones which are much widely available. Medfusion also provides a similar 24 hour service for patients to contact their physician by phone or online. Such services are the available substitutes for American Well services Buyer Power-Low The immediate buyers for the company are insurance providers and the employers. Further the service is ultimately reaching the patients. Both the insurance provider and patients are gaining out of it. The insurance providers have reduced their cost considerably same is the case with patients, they now can save their travelling cost and they no longer have to wait for their treatment. Considering the benefits involved, the buyers dont have much power with them Supplier Power-Low Suppliers in this case have limited power with them , as there are a lot of physicians and specialist available in the market companies like American Well and they have an option to choose the best out of them . However if there were a limited supply of doctors, then in that case the supplier might have some power. But , now considering the excess availability of physician and specialist they seem to have limited power available with them C. Situation Analysis-5C Customer The customers targeted here is the insurance companies who eventually target the patients seeking medical care for emergency and non-emergency ailments. Insurance companies could additionally open their networks to non-members paying out-of-pocket. Important characteristics are: Immediacy: the waiting time for an appointment with a specialist is quite large(7-60 days). With chronic diseases on the rise, prompt and early diagnosis can be a big factor in effective care. Convenience: the patients can choose the providers, location of choice for appointment etc, i.e. geographical constraints can be removed, this is good for people in rural areas and tourists for instance. Quality: The providers are qualified, the patient experience personal and record management is easier. Increased focus on other specialisations along with acute care like inpatient and outpatient services Affordability: Online care can save insurers $3.36/patient/month, this helps patients as well. Also early disease diagnosis would lead to lesser healthcare costs

Context The context can be described in the following external factors. Demographic: The number of providers (physicians) in different regions is skewed. This leads to a situation of over-supply at one place and over-demand at others. Online care aims at bridging this gap. Economic: Healthcare expenditure is pegged at $2.5 trillion in 2009 slated to reach$4.3 trillion in 2018 (major part of GDP). With more than 80% of population under age 65 insured, online care is a good prospect. Political/Legal: With increasing concern over patient privacy and security, doctors' concern on reimbursements by insurance companies for online care, legislations like HIPAA have been put in place to tackle the mentioned concerns. Technological: Online Care is a direct consequence of advancements made in technology with respect to collecting, managing and communicate health records of patients electronically. Socio-cultural: with advent of technology, patients and physicians are now willing to communicate through email and secure messaging for medical records rather than arranging a personal meet. Company The company "American Well" was established in 2006 by Ido and Roy Schoenberg, both trained physicians. The company was essentially created on the context of lack of access to quality and affordable healthcare and the ways in which IT can help bridge the gap. Healthcare was still considered a manual process of personally meeting physicians and specialists for diagnosis of even non-emergency ailments. The idea was to bring healthcare to people's homes and workplaces by using IT to bring patients and doctors together in real time. The aim of the company was to make digitise healthcare, i.e. everything was electronically done, interaction with the doctor, diagnosis and report creation and transmission. The company provided value proposition of immediacy, affordability, quality and choice to the patients while it alleviated the need for extensive infrastructure for a practicing doctors and provide them with greater flexibility. The primary customer for Online care were Health Insurance companies who in turn targeted patients enrolled with them. This resulted in reduced operation costs than would have achievable in dealing with individual patients, this also enabled Insurance companies to align the financial incentives for physician with Online Care. Another gain from this was enabling large and medium sized companies to acquire insurance at a much lower price and avail American Well's services. Collaborators and Complementers: Collaborators: Doctors: Doctors with various specialisations can be made available to the patients. This will decrease the workload of unnecessary diagnosis on the specialists and reduce the follow-up clutter with the PCP. Doctors that are more likely to join this service are: new Medical graduates, retired doctors and doctors who have not been utilized fully. IT: Since the whole process is based on IT, IT companies are an important collaborators. Complementers: Insurance companies: Online care's primary target. These can act as gatherers of patients and offer attractive insurance offers as the main service will be provided by Online Care, which will help reduce costs. Also allowing access of its resources to non-members at a premium will result in increased revenue, from a market never tapped before. Pharmacies and Hospitals: The patients can choose a second opinion from a physician or a specialist along with that in the hospital. This leaves a lesser margin of error in diagnosis. Also Pharmacies can use the knowledge base to clarify medicine related queries as and when required.

Retail Clinics: Healthcare can be provided through online care Kiosks at places where services of a senior level physicians cannot be availed of. Competitors: As of now, they're quite a few products/services that offer functionality that might seem similar to that of Online Care, but one of the significant is the speed with which things can be done with Online Care (Team Edition). The competing services offer only a low level of medical expertise barring a few like MedFusion which offered the services of medical specialists. But even with service systems with Medical specialist support, it often took weeks for a PCP's referral to materialise into an appointment and the subsequent follow-up. With Online Care's proprietary platform, this interaction was done in real time. Since this platform was the intellectual property of American Well, It provided an edge over the competition. But this edge will not remain forever, with the rapid advancements in IT, it's imperative for American Well to keep innovating to retain the edge or else some other company might just overthrow it in the technology stakes.

Best course of action

After our extensive analysis we have come up with a best course of action consisting of following three steps: First step: we recommend launching of Team addition as it is more of a natural extension to the existing product. The new product would provide the following benefits to the customers: The cycle time for the customers for repeated visits and follow-ups would be substantially reduced from months to minutes. Immediate attention / facilities could be provided to the people in need Specialist advice and treatment could be provided to the people in remote areas where the physical treatment by the specialist is not possible It would be a cheaper option for customers as now they wont have to travel and wait for the treatment/ advice , hence they would be very keen to try this new service For the existing customer base, it would be an added facility which would further reduce their expenditure and provide them with better quality service Companys ultimate goal is to be leader in Online Care, the product Team Edition will be more effective as the product will help the company to achieve differentiation among the competitors and thus help improve the market share. Developing Team Edition will not cost much to the company as it has already strong R&D and required technology for the same. The company should approach the already identified customer base for online care. These target customers will definitely be interested in this addition and it will be winwin for everyone. Second step: After successful completion of step one company should move into diversifying in other potential markets like hospitals, chain of health clinics, Pharmacies. Once company is on firm grounds after step 1 it will be easier for the company to allocate its resources to different new markets without compromising on quality. Third step: To expand internationally American well need to completely re-organize the company structure and enter into partnerships with different companies in different countries. It will be possible only after company establishes itself as market leader in home market first.