Marketing Management Case Study on American Well

MARKETING MANAGEMENT-I
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Case Study on:
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AMERICAN WELL-THE DOCTOR
WILL E-SEE YOU NOW
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BY: BATCH-8
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ARCHIT MORE-18A3HP652
CYRIL THOMAS-18A1HP006
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SHASHANK MATHUR-18A3HP640
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SHUBHAM JAKHMOLA-18A3HP620
SHYAM SUNDER-18A1HP021
SIDDHARTH SEHGAL-18A1HP090
VINAY THAPLIYAL-18A2HP452
SUMMARY
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Ido and Roy Schoenberg founded the company named ‘American Well’ in 2006 to revolutionize the
health care industry and alter the way how patients interact with doctors/physicians for consultation
or check-up. The idea was to convert the whole process of consulting/seeing a doctor using internet
and telephony services through the use of a technological platform in real time.
Traditionally, if a patient needed any medical service they had two options, either going to an
emergency room or take an appointment first and physically go to the doctor’s location to see them,
which was time consuming and expensive. Thus physical location and time availability of both
physicians and doctors was a barrier. These barriers were removed through the use of American
Well’s platform. It provided an ecosystem wherein many physicians would get enrolled and then any
patient can log on to this platform, having signed up giving his medical information and credit card
details and can contact any available physician in real time through the use of phone or the internet
by being in the comfort of his home. Once the session ends (which would typically take 10 minutes)
the system would manage the billing process. And thus, without making any appointments the
patient-physician interaction can happen at any place or time.
The key players in the American healthcare market were providers, public and private payors,
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patients and suppliers. Both Ido and Roy were trained medical physicians and had experience of
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working with health insurance companies on a health care start up named CareKey, so they had a
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clear idea about the pros and cons of the health insurance market and with the added benefit that it
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provided a lucrative customer base than individual patients, American Well decided on health
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insurance companies being their target customers. It was also very advantageous to Insurance
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companies as the online care incurred less cost through early detection and diagnosis of ailment,
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reducing the expenses incurred to accommodate office visits.
American well started its online care services in Hawaii through Hawaii Medical Service Association
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(HMSA) in which HMSA purchased surplus licenses and by the end of 2009 American Well was
considering its launch with three other customers. With the advent of its Team Edition product and
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growing market opportunities (both domestic and international) American Well faced a dilemma that
expanding so soon would undermine their focus on the current offerings of online health care on the
other hand if they waited too long their competitors could strike first. So they thought to first
strengthen their base in the current market by setting customer satisfaction as their priority then
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consider other ventures.

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VALUE PROPOSITION OF THE FIRM

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The company provided value proposition to patients, providers and health insurance companies, and
the benefits of this platform wasn’t gone unnoticed by any of them.
1. PATIENTS
For patients, American Well focused on immediacy, convenience, quality of service, choice and
affordability and helping them to treat their medical issue earlier because they can be referred
and consulted with a specialist in matter of minutes.
American’s who stayed in remote geographic locations had to travel miles for medical aid and
doctors could not be everywhere. Through American Well’s platform these patients could get
medical services at any place at any time.
They eliminated the element of shame and provided them with a new form of privacy. Patients
were provided with a large pool of providers and a platform to seek second opinion immediately
after receiving a diagnosis. They provided a personalised platform where patients can manage
their medical information, self-management tools and record of their care before and after
connecting to a physician.
2. DOCTORS
Doctors were hesitant to use technology to guide patients. They thought it would increase their
work load. They thought signing up with American Well they won’t be reimbursed. Roy and Ido
were clinicians themselves and they had a different value proposition for doctors. There were
aware about the infrastructure, leasing and equipping an office, licensing, accreditation, hiring
and training staff, setting up a transaction system, purchasing necessary insurance etc. American
Well system provided doctors with a new level of flexibility. This can help young doctors to add
an extra shift in evening. Doctors could work on their offs, work from home or from anywhere
and they can earn extra income. This can even help retired doctors to come back and practice.
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Doctors/physicians who were enrolled in the system can log in anytime and conduct a session.
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And it eventually helped the doctors to reduce their work load.
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3. INSURANCE COMPANIES
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It was a clear economic value proposition for the insurance companies. An online visit would cost
less compared to an office visit. Insurance companies paid PCPs depending on the complexity of
the visit, location and other factors. For a new patient PCP was paid $100 and for an existing
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customer it was $75. With introduction of Online Care doctors were paid $25 for a 10minute
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online session.
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Insurance companies saw potential and scope of increasing their profit margin if the problem can
be solved online. They were the aggregators in this system. This helped the companies to reach
out to larger pool of non-members and they can expand and monetize their assets. Companies
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could determine the cost of consultation.

It can help as reputational benefit for insurance companies, they were considered out of touch
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with average Americans and driven by profit. With the help of American Well insurance
companies can create goodwill with their existing customers by providing them affordable,
convenient, novel and personalized health care. They can reach out to remote geographic
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locations, unserved population, disabled patient, uninsured American’s. they could see the
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benefits from the improved provider driven care management enabled by American well.
American Well provided significant savings for insurance companies and addressed the issue of
aligning their monetary benefits with doctors. Doctors were advised to encourage their patients
to use Online Care for non-emergency and follow up appointment.
Therefore, to conclude it was considered a handsome proposal for insurance companies to enter
into such lucrative market. They had possibility to save huge sum of money and tap untouched
market.
4. OTHERS
Hospitals can install online kiosk machines in their emergency rooms, which will allow patients to
consult physicians’ online while they are waiting and the information will be passed on to the
hospital physician. With the hospital kiosk machines, they can be more efficient and lesser time
would be given to each patient. Hospitals in remote geographic locations can leverage the physicians
using Online Care and it will help to build relationships. They even might travel distance to visit the
hospital.
Retail chains can install online care kiosk machines. Nurses were the clinical staff present at retail
clinics, online care kiosk machine can boost the confidence of patients of the legitimacy of retail
clinics. They can be used even when nurses are not able to attend them or when patient needs a
second opinion.
Pharmacy chains can be one of the potential customer of American Well. Patients are afraid to ask or
forget to ask questions like- potential side effects, drug combinations, medicine usage. If pharmacies
are added in American Well platform patients can ask these questions at any time and place.
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American Well was distinguished in the Marketplace due to the following skills:
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(i) The main idea of Ido and Roy Schoenberg for starting up American Well was to fill the gaps of
health care industry. So they provided a common IT platform for the redistribution of medical
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services rather than just medical records. Healthcare was considered a physical process of personally
meeting Physicians or Specialists for Diagnosis. The company revolutionized this concept by bringing
healthcare to people’s home and workplaces by using IT to bring the patients and physicians
together in real time. They made everything electronic, from interaction with the doctor, diagnosis,
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report creation to transmission.

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(ii) They followed the B2B approach rather than DTC approach as their business strategy. Health
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insurance companies were their primary customers who would in-turn target the people that are
enrolled with them. This resulted in reduced operation costs. Insurance companies who were
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offering Online care would only pay a one-time fee for each individual member. For each individual
there was an annual maintenance and support fee as well as annual hosting fee. American Well
earned on the basis $2-$7 for every online care transaction and to be prorated if session extends
more than 10 minutes. By following these methods American Well was able to target a large market
of patients who were already enrolled with the insurance companies.
PORTER’S GENERIC STRATEGY

American Well decided on a being a B2B company rather than following the direct to consumer (DTC)
model which would allow them to reach a wide range of customers, thus opting for a very specific
market, i.e. the health insurance companies and in doing so American Well believed that it could set
them apart from other companies offering IT solutions in health industry. By referring the Fig.1.1
(representing Porter generic strategy) it can be inferred that American Well had chosen a focus
strategy for their business model.
Now the question remained as to what would be the source of American Well to gain a competitive
edge over other companies be, it chose customer satisfaction as its top most priority. American Well
was focused on catering to the needs of the customer, be it the spending freezes due to the volatile
US health care atmosphere and recession or the bad reputation the insurance companies had
garnered over the years or the daunting task of creating a new revenue generation stream, American
Well offered it all. IT focused on differentiation rather than cost, which can be inferred from the fact
that in order to create its sophisticated technology platform it had invested $70 million in an attempt
to develop proprietary intellectual property which could block future competitions and enable
American Well to gain a distinctive advantage.
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Fig.1.1 Porter’s Generic Strategies [1]

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[1]- https://www.mindtools.com/pages/article/newSTR_82.htm
POSITIONING OF THE COMPANY AS COMPARED TO COMPETITORS

 As American Well decided health insurance companies as their primary target customers. They
were able to position themselves as the solution of “industry’s spending freeze”. Company
believed that the insurer would view these e-services as part of a solution to all their problems
such as favourable public image among people, by offering a convenient, affordable and novel
health care services through American Well online platform.
 These insurance company have further no more need to pay physician consultation charges to
doctors which were unavoidable earlier and these insured patients able to resolve their health
problems online with less charges, and from this insurance companies will be able to generate
large amount of savings.
 As both medical patients and the Doctors have an access to American well online platform this
facilitate them to treat medical conditions earlier because of the immediacy of receiving
professional medical attention.
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MARKETING MANAGEMENT-I

consider other ventures.

VALUE PROPOSITION OF THE FIRM

could determine the cost of consultation.

report creation to transmission.

PORTER’S GENERIC STRATEGY

Fig.1.1 Porter’s Generic Strategies [1]

POSITIONING OF THE COMPANY AS COMPARED TO COMPETITORS

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