American Well – Synopsys

The stakeholders e.g. Customers, Physicians, Specialists and Insurers are the major
stakeholders who need to be sold the idea of online care. The other set of stakeholders are
pharmacists, retail chains and nurse practitioners who can also join Amwell for improving
services to patients.

Most important assumption or belief here is that marketing can promote a good idea and
bring in change in the behaviour of the stakeholders. However, if the business model itself is
not robust or useful enough for the stakeholders then it might not stand the test of times.

The biggest assumption from the case writer’s side seems to be that the retired, young, and
unutilised doctors can be brought in to take care of the patients in online care. However, you
must never get swayed by facts given in the case and must see them in reality and assess their
feasibility. It is a trick which case writers put in cases so that they can first bias participants
and then they are made to see the real picture. But if you can see the things clearly with an
objective mindset I guess you will train yourself as a good manager.

The realistic assessment as discussed in our classes is that if, there are 25 percent doctors who
fall in the category of new doctors, unutilised doctors and about to retire doctors. Then you
need to do the job of assessing each category of the doctors using some parameters e.g.,
qualification, experience, complexity of cases handled, and reasons for remaining unnoticed
and then take some of them. Because you don’t want a not-so bright new doctor to treat
patients using your medium. You don’t want a bad doctor who was unutilised to get on to
your platform. You also want to avoid old doctors, who may not have the energy to treat or
inclination or physical capacity. So for each category you can pick and choose the doctors
and provide good evidence to the patients about their achievements so that you can sell their
services through your platform. In a realistic estimate, may be 10-15 percent of these three
category of doctors may be deserving and willing to work online for the reasons you
promised. So you get a chance to promote them and bring more services to patients.

This way you are doing a very good job of bridging the demand – supply mismatch. Please
note that just by changing the mode of operation time cannot be created. Time is created only
when you facilitate the trivial or routine works of the physician via online care or any other
method thereby creating some space in his / her schedule to see more patients. Without
removing the existing bottle-necks in the system time cannot be freed-up.

Vision of the organisation: You want to promote universal health care at the affordable
prices (Must say, affordability’s meaning is relative in marketing, e.g. Gucci bags are also
said to be affordable to certain segments of customers).

What to do on the ground: You are interested in serving more patients and bring more
transparency in the system of medical care. So you will explore and utilise all the options

Value proposition for customers / patients: The patients who were to wait for long time
before meeting the doctor can now see the doctor a bit faster. Further, the patients can
recognise their health problems faster which may result in saving of their lives. This might
reduce the medical expenses for the patients in the long run. Most important certain health or
mental problems e.g., sexual diseases or psychological counselling which are considered a
stigma can be handled through the online medium. It helps patients to take the help of doctors
without any fear or hesitation. People in the remote locations who were deprived of good
health services can now have access to doctor and specialist for consultation.

However, patients might not prefer the online mode as it is new and not proven itself yet.
Also there is a question of doctors and specialists opting to be treating patients online. There
is also issue of conflict of interest for the doctors and specialists due to which they may not
want to promote the online method and scare the patients not to opt for it.

Looking at the value proposition for the Doctor: The marketing pitch has to talk about
targeting those doctors who are good but are not being utilised completely.
- We can offer them patients coming from other geographies or states who don’t
have the medical services provided regulations allow this.

- This way we are filling the demand – supply gap to some extent and improving
services for those who don’t have access to healthcare earlier. However, more
doctors overall will surely address the demand – supply gap better.

- We can also reduce the burden on the existing popular doctors by reducing
patients of smaller ailments by redirecting them to nurse practitioners. We are
improving time utilisation by physicians.

- Some of the ailments are secretive and discretion is needed. By going online
AmWell will be able to help those patients meet the doctor online and get
medication for their problems. This way, patients will not have inhibitions of
social stigma and doctors will have more patients for their practice.

- Overall the pitch should not talk about money as the major goal, but all the above
points and money to be shown as a result of it. If we go by the logic of Economies
of Scale being the goal and mass production as just one of the means of achieving
it. This will also reduce the moral burden on the Doctor as he can say he is serving
more patients for good, rather than for earning more money. This is to be sensitive
to certain culture where showing off one’s money is not considered a good
gesture.

Value proposition for the insurance agencies: Cost reductions and capturing of non-
members is the goal here.
- Cost savings for online care as patients with chronic diseases will get taken care
much before.

- There is scope for involving non-members in the online care for improving
revenues by designing special packages for them based on their incomes.

- The cost considerations i.e., sharing of cost for treatment between patient and
insurance agency needs to be taken care for the business model to work well.

- Insurance companies may also fear that Amwell once established with customers
can go direct and develop conflict of relationship by connecting directly with
customers (at least non-insured ones to begin with). Please clarify that you are not
in insurance business, you are in the business of facilitation and do not have the
capacity to take over insurance.
 - Even with insurance companies it is change of bargaining power to Amwell, so
they too will take steps slowly in accepting the online care.

Value proposition for specialists: I am not sure if there any value that Amwell is adding to
the specialists.
- The specialists are anyway burdened with cases which is why they take 60 days to
reach a new patient.

- In such situation will they accept patients online is a question we should consider.

- Also the relationships between the physicians and specialists have to be good and
without which the online care doesn’t work.

- As most physicians and specialists have their own networks, will they leave that
for Amwell is a question?

- Also will the doctors lobby allow some tech company to take over their profession
and give commands over internet is another question?

- The fear of shifting power to tech companies does bother doctor’s fraternity and
they will always try to keep the bargaining power with themselves.

What is the learning?

- American Well proposes savings for insurance companies (in $30 million range)
and from one hospital – BCBS (in $13 million range). This indicates the potential
for the company as well as its collaborators. The AW needs to market itself well
to the insurance companies saying that its technology saves a lot of money.
However, there is a condition, i.e., not all consumers would want to go online,
older people and the younger ones will not take online care. Even among the ones
who are targeted based on the disease the patients may not take online care. This
means that about 40 percent of the proposed savings can be realised by an
insurance company.
- The government may also support this initiative as pandemic made it mandatory
to maintain social distance to be observed.

- We may have a very good business model, but we also need to see if (i) it is
challenging the existing status-quo which cannot be changed by the level of
technology that is proposed, (ii) if the technology is really able to challenge the
status-quo and break it, e.g., Ola – Uber which revolutionised the transportation.
So we need to be balanced in our approach in deciding the power of technology to
change things. There are certain aspects which technology appears limited.

- So the thinking process should be based on “Socio-technical system” where we

see the semblance between technology and its acceptance in society. It is not
possible in certain circumstances to challenge and change the existing status-quo
in society so technology can only play a limited role of enabler rather than a game
changer. However, in instances like transportation, it definitely proved to be a
game changer.
 - Being sensitive to the societal aspects of the technology and use it appropriately to
improve the lives of consumers / stakeholders is needed.

- Being sensitive to customer i.e., patient and her/his speedy recovery from the
disease the business model of AmWell seems to focus on the traditional aspects of
the hospital i.e., being disease centric. However, it is different to the extent that it
is trying to be more efficient than the traditional hospital system which is
overburdened with patients. The simple fact that patient’s welfare is important for
an initiative to succeed (just as in marketing customer welfare is important for an
agency to succeed) seems to be missing from the ideology of the promoters of
AmWell. So it is just being efficient, whereas the requirement to revolutionise the
healthcare system was expected to effective in patient care. The biggest problem
in such case would be that AmWell will not be able to establish a competitive
advantage for itself in the market. It will be able to establish comparative
advantage only. When an organisation is harping on comparative advantage, it
stands a chance to get overtaken by competition which can bring in further
efficiency with the improvement in technology. Instead if AmWell were to bring
in effectiveness in its patient care that could be a unique point, which cannot be
easily copied by competitors.

- Considering the limitation of the business model in terms of not being

revolutionary as promised, it would be difficult to convince angel investors to
pour in money for the venture’s expansion. It may be argued that efficiency can
also be sold and steps can be taken to curb the competition from entering the
market, thereby convincing the angel investors to make money. It is still a hard
job with less promising future (Also may depend on context, serendipity and drive
from promoters which cannot be estimated in quantitative terms). In such
scenario, promoters having ideas to expand the service all over America and then
moving on to capture international markets seems a bit far-fetched. Because it is
not just about being efficient in itself, but also being able to cut through the
established nexus between doctors and insurance agencies, which will determine
the success of AmWell. When it is difficult to cut through the nexus of one
domain, i.e. health care, the promoters also plan in the long run to get into law,
accounting and religious services. This is bit more of a stretch of imagination. It
can be aptly said that the promoters have “lofty ideals but down to earth plans /
resources” to achieve those ideals.

Competition e.g. Cisco can be a future threat even if the technology succeeds. The
organisation might not take legal route, but as it has infrastructure and equipment it can
challenge Am well in its own turf. As of now the business model has not been popular in US
or in other places. It is seen as an option in case of visiting hospital is not possible (e.g. due to
pandemic Covid-19) people want to remain at home and take medical advise. However, it is
possible that after the pandemic is over they want to fall back into normal routine and want to
visit the hospital. So competition in this realm may not be so high. Once the positives and
profits of the business are proven then it will have more competition, till that time it will be in
experimental stage only. Most important development is entry of Amazon in health
insurance, which might want to buy our the business and deliver the service through its name.
But most important factor that needs to be taken into account is that Amazon now is coming
under scrutiny for its anti-comeptitive practices, so caution is needed.