MARKETING MANAGEMENT

Case Study- American Well: The Doctor will E-see you now

SUBMITTED TO-
Prof. Manoj Das.

SUBMITTED BY-
SECTION-A

SUMMARY
With the advancement in the IT infrastructure throughout the 2000s presenting itself as a
platform that was ready to be capitalized, the founders of American Well, Ido and Roy
Schoenberg who were physicians themselves, recognized this opportunity to pioneer a healthcare
delivery model. They visualized and developed a platform that would use web-based
technologies to bring patients and physicians together in Realtime. This platform helped bridge
the gap between Realtime excess supply/Capacity with Realtime excess demand. The first
challenge faced by them after the development of the platform was to decide upon the business
model they would work upon, they could either go for a DTC model or a B2B model. Going for
a DTC model provided the company more flexibility to control their user interface whereas the
B2B model targeted Health insurance providers as the target customer which came in with the
benefit of a huge database of patients and doctors. Keeping in mind the risk involved via the
external factors of the DTC model such as government reforms, American Well decided upon
the B2B model. One of the most promising value propositions for the health insurance
companies was that the platform would help them save a major portion of their cost. Another
factor that added value was that they could capitalize on their huge network of doctors by
offering chargeable online consultations. Roy and Ido also insisted on creating the next-gen
product of American Well which was named Team edition. It was aimed at revolutionizing the
interactions between the players with the promise of alleviating some of the greatest functions in
a health care delivery system riddled with cost inefficiencies. The brothers believed that
American Well's model had applications well beyond the health care industry. They plundered
on diverting their resources to focus on new ventures but we're very cautious of the fact that they
might lose their place as the top player in the Online Care segment. Another point of concern
was that the unexplored markets if left open, would be tapped on by the new competitors.
Ultimately, they settled on maximizing customer satisfaction.

Q1. Do you share the assessment of the founders regarding the potential of online care to
revolutionize healthcare delivery?
Yes, we do share the view of the founders that online healthcare delivery will revolutionize the
healthcare delivery system. There exists a fundamental problem of the supply and demand for
healthcare existing at separate geographical locations. The founders have the vision to eliminate
this problem and ensure affordable, efficient and easily accessible healthcare delivery to patients.
Following are the few ways that online healthcare will bring revolutionary changes to healthcare
delivery: -
- Affordability – US spent 17.6 of its GDP, $2,338.7 billion to be exact on healthcare (world
highest). The traditional healthcare system is expensive and can cost hundreds and even
thousands of dollars. On the other hand, online healthcare is relatively cheaper than this. (Exhibit
1 & 2)
- Easily accessible – Traditionally, patients or the doctor needs to physically visit the other
person. This creates a problem where there is a shortage of medical practitioners. Online
healthcare eliminates this entire problem. Patients in remote and rural areas can get easy access
to healthcare as long as they have an internet connection.
- Efficient and convenient – As Exhibit 11 & 12 shows, patients have to wait for days if not
weeks to get an appointment for a check-up. A serious ailment can worsen in this time and might
become life-threatening. With online healthcare, the need for making appointments becomes
redundant. Patients can choose from various doctors who are online at the moment and get
instant treatment. They can even get a second opinion within minutes. Furthermore, the new
service concept known as “Team Edition” will be of huge help to those who are referred to a
specialist. With Team Edition, PCPs can instantly refer a patient to any specialist who is
currently online.
- Better patient experience – This is the most important factor of all because it’s only the
receivers of the service who will decide if it’s a success or not. It is evident by the survey in
Exhibit 5 that they are preferring online healthcare over traditional healthcare. Online healthcare
provides privacy and more personal experience to patients which is making them more inclined
towards it.

Q2. Which of the new market opportunities do you see as most promising?
As the health insurance market was already in focus and a lot of work was already done in this
sector, Ido and Roy started accessing other opportunities that they could exploit and gain from.
Some of these opportunities came into the picture after extensive research by “eMarketer Digital
Intelligence”, called “Hassle-Free Healthcare, Delivered Digitally” as given in Exhibit 5 of this
case. Also, exhibit 11 and 12, taken from “2009 Survey of Physician Appointment Wait Times”,
Merit Hawkins and Associates shows that a lot of time is wasted in waiting for an appointment
before finally getting to see the Physicians and Specialists. It is very clear that a lot of people
prefer online healthcare services as it saves time, money, etc.
After studying these factors, the opportunities that came up were Installation of Online Care
kiosks in the emergency rooms, Consulting physicians before leaving for the hospitals and
Supporting and in turn improving the customers' perceptions about retail clinics through the
installation of kiosks. Ido also discusses how Medical waste can be controlled and also reduced
through their services, similarly Malpractices in terms of insurance claims and other such frauds
can be curbed.
The most promising market opportunity comes out to be Pharmacy Chains. American Well plans
to connect customers to pharmacies through their portal. People can consult Expert Pharmacists,
regarding their prescriptions, medicines, their side effects, etc, which they usually feel
embarrassed to do in front of other customers, or they simply forget at times. American well
could bridge this gap and give customers the comfort of addressing their queries in peace without
any inhibitions. As seen in Exhibit 6, American well provides a very personalized experience to
the customers where they can freely interact with the physician and it can be done in this case as
well, where pharmacists do the same.
American Well also focuses on guiding the customers about the right doctor for the right
situation by assessing the symptoms. On being connected the customers can reach out to the
physicians or pharmacists through calls, chats and live video conferencing. This would help
customers maintain records of their conversations, prescriptions and other information; use the
same to connect with the pharmacists.
American Well also plans to expand to other nations considering their success till now. They
have Australia, Germany and the United Kingdom in their mind as they have shown interest in
their service. Further, if we study Exhibit 10 “An Actuarial Analysis of Online Care- Appendix:
Chart F.5” Milliman, it can be seen that there are a lot of treatments that have the potential for
Online Care such as Minor burns, infectious diseases, orthopedic disorders, poisonings, and toxic
effect of drugs, etc. They also plan to expand to disorders that usually people are embarrassed to
talk about, such as AIDS, male and female sex gland disorders, eating disorders, obesity,
testosterone replacement therapies, anxiety disorders, etc.
In a nutshell, though American Well has a lot of opportunities, it should not forget that these
opportunities involve a lot of costs, infrastructure, and investment. This would involve a huge
investment in terms of marketing as well and assistance from the US health insurance market.
This would have to be a very strategic move as it involves both insured and noninsured patients
and could lead to conflicts of interest.

Q3. If you were in the shoes of American Well Management, would you pursue any of the
next-generation options in 2010 or would you just focus on the core platform with the core
target market?
American Well was founded in 2006 and by the time it had established its root in the market, the
economy worldwide had suffered a major recession. The United States remains one of the most
highly affected countries by this recession. HMSA was the first health insurance company that
they had managed to get on board and offer Online Care and this was possible only by January
2009. The expansion if limited to the Health care industry across the globe had great scope and
was something that could benefit consumers. As displayed in Exhibit 5- Survey responses by US
consumers on Advantages of E-mailing their PCPs had received a lot of positive response and
justifies the expansion of such a product across the globe. Concurrent with the polls the decision
taken by the founders stands right as the focus on the target market and core operations were
important in the extremely tough conditions of the economy. A service model of online-based
care requires constant updating of user experience along with a key focus on customer retention
and expansion. We believe that the stage at which American well was looking to launch any new
undertaking was very volatile in terms of floatation of funds, hiring or retention of the
workforce. Hence any diversion would have been futile at the time for an organization of the size
and operations of American well.