AMERICAN WELL: THE DOCTOR WILL E-SEE YOU NOW

Long queue, busy schedules and inaccessibility to certain regions continued to possess a
problem for customers demanding health care and other health facilities. With a revolution on
their mind the Schoenberg brothers were all set to change the scenario. With the vision to use
the internet and telephony to connect patients with physicians and PCPs(Primary Care
physicians),they set up ‘American Well’ in the year 2006,a company that focused on
providing extensive healthcare through internet and telephony, a service that was first
provided by an Hawaiian organisation ‘Blue Cross Blue Shield’. Prior to setting up American
well, the brothers co-managed a organisation Care-key in the year 2000 by Roy Schoenberg,
which was the first organisation to provide customers with internet PHR’s along with certain
set of tools to self-manage health issues. With the prior success in Care-key and the insights
derived from it the root for American Well seemed to be pretty strong.
Having being the co-founder of an organisation such as iMD soft, a company that first saw
the potential of IT in delivering healthcare, Ido was well aware of the potential that the
company could possess. However, he was keen on expanding the market segment and also
increase the applications that they provided that would make them stand out from other
competitors. Having been already approached by a number of non-U.S health insurers amidst
the initial phase of expanding their scope of business, they feared entering into international
markets already might undermine the company’s abilities in being the dominant force in the
field of online health care. The standout feature of the company was the introduction of
“Team edition”, that not only connected the patients with physicians but also with PCP’s and
specialists that not only saved the customers’ time but also eliminated the need to come back
to PCP’s for follow ups. Although this modern technique was adapted by many physicians
and specialists, many felt communicating through email and telephone could result in late
replies.
The GDP figures for health care expenditure in 2009 stood at $2.5 trillion and were projected
to reach $4.3 trillion by 2018, about 17.6% of the total GDP were affirming to the future of
the company. In a country that had 990000 physicians of which 40% were PCP’s, 2.5 million
registered nurses, 74000 physician assistants and 147000 nurse practitioners the network of
the company looked very solid. American well seemed like a solution to all the barriers that
posed a challenge to the traditional method of delivering care. Problems such as regional
shortages of specialists, inaccessibility in rural areas, provider shortages and the complexity
of U.S. system for financing patient care wherein, dependency on employer for people with
private coverage, constraints imposed on insurers in various states and the funding for others
hanging between public and private payors didn’t seem to be much of a trouble for American
well. One of the main problems with the traditional methods that American well could seem
to solve was that of the people who were not insured. Due to the cost being very high 14% of
americans went without a treatment and even for some of those who were insured due to high
plan deductibles, paying high amounts out of pockets seemed difficult for many people.
Innovations bought by American well such as maintaining online records, appointment
scheduling, bill-pay services etc reduced the administrative burden on the payors and in turn
made the process of getting health care cheaper for the customers. They initiated a 10minute
process where a customer had to enter their credit card details and choose the type of
 specialist, the enrolled specialist got the history pf the patients medical records could interact
and solve their problem. Due to the volatile U.S health care environment many insurers
implemented spending freeze and unaware when such restrictions may be lifted procuring
care got even more difficult. Ido believed that insurers might look at American well as a
solution to their problem because it offered them access to large pool of patients, access to
medical records through which they could sponsor online consultancy. Also, the rate for
reimbursement for online consultancy as compared to in-clinic visits was comparatively less
and could serve as a value proposition to the insurers.Insurance companies could enter a new
market that was of non-members(uninsured) by charging a reasonable amount $45-50
depending on the type of consultancy. American well also could solve the conflict of interest
between physicians and insurance companies, where delivering more services for a physician
meant more incentives it implied higher costs for insurance companies. They could reduce
their cost if physicians insisted their patients to opt for online consultation for non-emergency
situations and for follow ups.

a. Do you share the assessment of the founders regarding the potential of the Online care
to revolutionize healthcare delivery?

I conform with the idea of founders Ido Schoenberg and Roy Schoenberg that the online care
platform has potential to transform the health industry. It can provide common healthcare
services to patients, 24/7 from the comfort of their home.

The online healthcare system emerged at a time when the present healthcare system was
stagnating due to shortage of healthcare professionals and specialists in various parts of
country.
The recipient of health-care system in U.S were patients, providers, public and private payers
and suppliers of essential products such as life saving drugs and medical equipments. The
Providers included firms involved in delivering healthcare services such as hospitals, nursing
homes and health clinics as well as physicians and other health professionals. The recipient to
provider ratio was not matching which was creating insufficient access to healthcare.
Following shortfalls in conventional health care system was the main reason for the success
of American well. It bridged the gap between patients and health care professionals. Also it
brought about a lot of technological developments in the field of healthcare like
telecommunications and computer-based tools to collect, manage, and communicate
healthcare related information and transactions.

b.What value do you see “Team Edition” creating? What barriers to its adoption do you
foresee?
Team Edition is a new generation concept that would revolutionize the way doctors interact.
Conventionally, if patients had to consult a specialist, they had a waiting time of weeks. Even
after consultation, they had to visit their primary care physician (PCP) for follow ups as per
the doctor’s availability. Dialogue between the physician and the specialist via reports would
further complicate the case.
Team Edition is the idea that would make this process quick and hassle free. In case a
physician wanted an expert opinion, he could reach out to the specialists available online via
the Team Edition platform, that too while the patient is still in the his office. This would not
only save both, the patient's and the PCP's time but also improve the quality of treatment. It
would also benefit the health insurance companies as problems would be resolved before they
get severe. Additionally, PCP's could consult specialists from anywhere is US, thus
overcoming the barriers of medical licensing. It is an opportunity to expand American Well.
It would not only add value to the existing technology but also to the stakeholders.
However, investing in a new venture could also lead to a shift in focus from it’s core
business. Apart from this, it would divert resources from the U.S health insurance market. It
would also require additional funds and additional hiring. Therefore, the brothers were
contemplating whether it’s the right time to much such significant investment but if they
waited too long, they would loose out on the 1st movers advantage.

c. Which of the new market opportunities do you see as most promising?

We feel that most of the new market opportunities in the health care IT innovation were
promising. The Health Insurance Portability and Accountability Act (HIPPA) set the national
standards to the providers, insurance companies, group health plans and the government
payors on disclosure and usage of patient information. The act took care of the patient
privacy. Even the new method of CODING the medical services using phrases and numbers
made by the American Medical Association (AMA) had made online communication with
patient possible.
Many companies took steps and started providing electronic services for improving patient
care. “RelayHealth” and “Medfusion” making online communication between the patient and
physician either through setting up appointments or through Virtual Office Suit. RelayHealth
also provided facilities like updating health records, update of lab results and prescription
renewal. Both of the companies offered interactive questionnaires for describing the
symptoms a patient is suffering. TelaDoc provided the patients with 24-hour 7-day access to
physicians through phone where they could consult them for short-term. “Cisco
TelePresence” made real time health services possible the patient and physician could interact
on video conferencing along with sending medical data collected from medical devices.
Beside the online devlopments of the market even the ofline. The Nurse Practioners
underwent additional training and were allowed to perform in hospital emergency rooms,
retail clinics and nursing homes. They also performed activities like health education, disease
prevention activities. Even some walk-in health clinics named “MinuteClinic” and
“RediClinic” were started. They provided treatment for routine health issues and injuries.
Installation Online Care kiosk in the hospital emergency rooms through which the patients
waiting could consult the physician online and by the time physician could actually see the
patient they already know their case; this would increase the efficiency of the hospital. Usage
of the Online Care would also help better utilization of capacity of physicians in hospitals of
low-demand geographic location. Online Care could also be used in Retail Clinics for
consulting physicians as the Nurse Practioners are the highest-level staff present there. It
would help change patient perception for Retail Clinics.
Online communication with pharmacies will help the patients to clear their doubts as the will
get an opportunity to ask any question they coulnt ask in public. It will help patients to
understand the side effects, dangerous drug combination and other relevant information.