I bet you thought that I meant President Trump as the disrupter. Although he is becoming the great disrupter I really was referring to Uber and others. My wife and I were in New York City this past weekend and it still amazes me how Uber as well as its competitor Lyft has changed the taxi cab business that others like Yellow Cab and Diamond Cab has for decades controlled.
Disruption is happening at different speeds for different industries shouldn’t lead those industries where it’s happening slower to assume it’s not happening. The worst thing would be to feel like it’s not hitting your industry and to wake up in five years and find out that, actually, the fundamentals have changed. The other thing is, disruption is not all negative. For some players, disruption represents huge opportunity and upside. Whereas, for others, it’s really about containing the damage.
Look at the effect of the Minit Clinics, and the Walmarts and the Mega Drug Stores offering vaccinations and healthcare in their clinics and stores. Walgreens has more than 400 in-store Healthcare Clinics and CVS Health had more than 800 MinuteClinics and by the end of the year 1,035 clinics with plans for 1,500. Today,
About 10.5 million patients a year visit more than 1,800 retail clinics in the U.S., according to a recent report by Manatt Health Solutions, the healthcare division of law firm Manatt, Phelps & Phillips. Traditional provider organizations have also joined the fray.
I was more concerned when I saw 2 more articles.
First there was: Wal-Mart launches new primary care clinics in South Carolina- Lauren Sausser wrote last year that Gov. Nikki Haley and two high profile health care advisors boarded a private plane to Bentonville, Ark., more than a year ago for a closed-door meeting with Wal-Mart executives. They hoped to convince the largest retailer in the country to launch a new primary care strategy in South Carolina.
Healthy Connections Checkup-The South Carolina Medicaid agency launched a new program called Healthy Connections Checkup on Friday. It will provide preventive screenings and family-planning benefits to an estimated 300,000 residents who fall below 194 percent of the federal poverty level. The program is less comprehensive than traditional Medicaid, but it will cover adults who are ineligible for the regular low-income health insurance program.
It’s also much less expensive to administer. Healthy Connections Checkup costs the state approximately $300 per person per year, compared to at least $3,000 a year for regular Medicaid.
“We’ve put public health and prevention and screenings front and center where it should be,” said Medicaid Director Tony Keck. Critics argue that the program is well intentioned, but that it will not benefit uninsured patients who are truly sick because it only covers the cost of screening, not actual treatment. Keck replied, “There are many, many organizations that see people for free or for a reduced cost. When we find people who need care and aren’t able to pay for it, we can connect them.” “We told Wal-Mart, ‘We think this is perfect,'” said Tony Keck, director of the state Medicaid agency, who attended the meeting.
And then there were the articles about Uber: Uber-a-docs: Changing the healthcare landscape for better or worse? Meg Bryant wrote last year that there was a time when a person could ring up the doctor’s office and arrange for their physician to see them in their home. The image of the black bag-toting doctor was ubiquitous in primary care. But that changed as the healthcare system evolved and medicine became more high-tech. Now, the house call is trying to make a comeback via a slew of apps that promise convenient, same-day diagnosis and treatment at a fixed price.
But one question lingers: Is it the best way to use physicians’ time and skills? Some say house calls are time-sucks “House calls are inherently inefficient.” “House calls for physicians are more convenient for patients and they allow the doctor to avoid the overhead of a physical office,” Harvard health policy professor Ateev Mehrotra said via email. “However, they are inherently inefficient because the visit reimbursement has to cover both time of the doctor in the visit and the travel time.”
Physician Jason Parkinson, who launched a solo practice offering house calls in New York City in 2007, agrees. Writing in the online magazine Quartz, Parkinson says up to 60% of his day was spent traveling between apartments in two neighborhoods and to and from the pharmacy or his apartment for supplies and vaccines. While a typical primary care doctor can see about 30 patients a day in the office, the maximum number he saw in a day was eight. “Doctors already spend roughly 40% of their day documenting and doing other administrative tasks,” he wrote. “To waste the other 50-60% of your day traveling between patients is a 50-60% reduction in efficiency.”
Parkinson adds: “Short of teleportation, the doctor house call will always be an irresponsibly massive reduction in primary-care efficiency.” He has since co-founded a digital healthcare service called Sherpaa, which provides online consultations for patients. Triage is essential for success. Andrew Chomer, vice president of marketing for Uber-offshoot Pager, acknowledges the concern, but believes there is a sustainable model for house call apps.
“If it was just a house call service, that time is kind of inoperable,” Chomer tells Healthcare Dive. Pager’s doctors use Uber to get to and from patients, so travel time is frequently used to follow up with patients or for a telehealth call.
Pager’s platform offers three possible care paths. As soon as they hit the button on the app, the user is connected with a nurse who assesses what the problem is and the level of care that is appropriate. If the issue can be handled by a phone call or videoconference, then it is triaged to telemedicine. If it can’t be resolved via phone or internet chat, the next step is to consider a house call. If Pager doesn’t feel the problem is within the scope of its services, the patient is referred to a specialist or emergency room. The company, which operates in and around New York City using its own medical practice, has partnerships with Weill Cornell Medicine and New York Presbyterian Hospital.
Pager marketing VP says about 60% of calls are handled by telemedicine and 40% are house calls. Chomer says about 60% of calls are handled by telemedicine and 40% are house calls. Overall, about 10% lead to referrals. Pager, which fielded “in the tens of thousands” of calls from individual and enterprise clients last year, boasts a 99% customer satisfaction rate.
Triage is essential if physician house call businesses are going to succeed, says Gorkim Sevinc, managing director of Johns Hopkins Medicine Technology Innovation Center, who doesn’t want to see healthcare “commoditized like a cab ride.” Not all health concerns require an actual doctor visit, so the question is “how do we become a little bit more smart about deciding who should be seen and who should not be seen?” he says. Not every house call app provides a filtering process. Sevinc also worries the rise of house call services like Pager, Mend, and Dispatch Health will erode the traditional patient-doctor relationship.
“The biggest thing about a primary care [physician] and a patient is to start to establish trust and have a relationship between them,” he says. While these apps are great and they fill a certain demand demographic (the individual can’t venture out, they need to see someone right away), in most instances “I would prefer to go to my PC because I have an established relationship with them,” Sevinc adds. “How am I going to establish a relationship when I am swiping left and right on an app?”
As more of these apps spring up across the country, there are other concerns, too, such as patient safety. “Some of these services that are talking about being able to sew someone up at their kitchen table — is that a sanitary environment? Is the lighting good? Is the proper equipment available to handle some type of medical emergency that might occur?” urgent care expert Alan Ayers asked ABC 7 in Denver.
Spared no expense? Patient access is also an issue. On the one hand, house calls lower the barriers to access by allowing anybody to request a doctor and have them there quickly. On the other hand, most, if not all, are not covered by insurance and require cash payment upfront. For an in-patient visit, Pager charges $50 the first time and $200 for each subsequent visit. Other companies report fees in the $150-$200 price range.
The issue comes back to value and the best use of doctors’ time, says Sevinc. “If I’m paying out of pocket for this, if my insurance is not covering it, what is that sweet amount that I am okay with paying that is also value enough for the physician to actually travel to me?
Triage is essential if physician house call businesses are going to succeed. The insurance picture may be changing. According to Chomer, Pager is in the process of becoming in-network with some “well-known” carriers and expects to roll that out in the third or fourth quarter of this year. The company is also looking at possible opportunities with Medicare and Medicaid in the future, he says.
According to Healthcare Finance News, the American Academy of Home Care Physicians estimates that home-based primary care could save Medicare between 20% and 40% by preventing unnecessary ER visits. If you figure that one diverted ER visit saves about $1,500, then that would offset 10 house calls, the group said.
That still doesn’t resolve the basic question of whether house calls are an efficient use of primary care doctors. “Everyone talks about Uber for healthcare, which is great,” says Sevinc. “Healthcare needs to be modernized, and a lot of startup companies are trying to do this, but we need to do so without lowering the value of our healthcare providers.”
So, now there is a suggestion that Uber can use this strategy to get into other markets. While dozens of startups today look to Uber as a template for how to bring on-demand convenience to a long-standing market, one “Uber for healthcare” startup has an advantage. Its cofounder Oscar Salazar, who helped build the first Uber prototype, knows a thing or two about the $46 billion-plus valuation company first-hand.
Pager announced, Uber Cofounder’s ‘Uber For Healthcare’ Startup Raises $14 Million, last year that it had raised $14 million from Ashton Kutcher’s Sound Ventures and New Enterprise Associates, with existing investors Goodwater Capital, Lux Capital and Montage Ventures rejoining. The money’s aimed at expanding the New York City-focused service to new markets including San Francisco and Los Angeles and building out the product.
While services like ZocDoc and Doctors On Demand have made it possible for customers to find and book doctors more easily by computer or phone, Pager tries to take the process further by making your appointment instant and for a flat fee. A first-time urgent care visit is $50, and $200 after that. A physical is $100 and a phone consultation $25.
The parallels to Uber are peppered throughout Pager’s product. The service finds and verifies doctors for its network and bills you automatically over a linked credit card. There’s a $10 cancellation fee if you bail on an appointment after more than 5 minutes. And because the service is out of network for now, it favors those for whom convenience can come at a premium to healthcare network costs. That’s why it’s no surprise that Salazar is involved. Since building the prototype of the Uber app with billionaires Garrett Camp and Travis Kalanick, Salazar’s become something of an on-demand Uber exporter. He’s got a cofounder title with Ride, an app to bring Uber-like convenience to carpooling. Last month he linked up with another startup to work on an “Uber for trash.” Salazar doesn’t work full-time or daily at any of these startups.
“I don’t build companies, I help people build companies,” says Salazar. “It’s part of my strategy to work with companies like Uber, because I can do my job faster and I want to have value to add.”
As Salazar helps with high-level product issues and builds out technical teams, it’s up to operators lesser-known than Kalanick to execute at each one. At Pager, that’s the job of CEO Gaspard de Dreuzy. “Pager is focused on delivering a broader range of care options on demand” than exist today, de Dreuzy says. “It could be a tele-consult via phone or messaging, or an in-person visit in the home, or a referral to the right specialist. We like to think of ourselves as the Amazon for healthcare.”
Eventually, Pager will build partnerships with national providers to improve their own customer reach, says new investor and NEA partner Mohamed Makhzoumi. That’s where Pager’s vision may translate into large numbers of users, as its technology helps push the rest of the industry to improve its tech. Otherwise Pager’s pricing and pitch could come off—as Uber once did—as a service of convenience for the well-heeled.
The influence of Salazar’s background helped with investors and with the product. It also helps Pager stand out among dozen of startups striving for attention. But Salazar himself makes it plain that he’s not helping any of his startups score major Uber partnerships trading off his reputation at Uber HQ.
Salazar’s already got a new area where he’s looking for an “Uber for X”: education. “ They all share a narrative, Salazar says. “All the projects I’m involved in have a social impact. That’s where startups can change the world faster.”
What’s the secret of those incumbents that do survive—and sometimes even thrive? One aspect surely relates to the ability to recognize and overcome the typical pattern of response (or lack thereof) that characterizes companies in the incumbent’s position, i.e. the disruptors. This most often requires acuity of foresight and a willingness to respond boldly before it’s too late, which usually means acting before it is obvious you have to do so. As Reed Hastings, the CEO of Netflix, pointed out (right as his company was making the leap from DVDs to streaming), most successful organizations fail to look for new things their customers want because they’re afraid to hurt their core businesses. Clayton Christensen called this phenomenon the innovator’s dilemma. Hastings simply said, “Companies rarely die from moving too fast, and they frequently die from moving too slowly.”
How about the announcement that Forward, a medical office startup founded by CEO Adrian Aoun, announced its arrival to the world on Tuesday, Business Insider reported. Aoun, a former Google employee, is joined by ex-pats from prominent tech companies Uber and Facebook and has received investment funding from the likes of Peter Thiel’s Founders Fund and Marc Benioff. The service, currently offered in San Francisco, costs $149 a month in lieu of insurance and/or a co-pay, Tech Crunch reported.
According to Business Insider, Forward’s take on care delivery twists the concept of concierge care, a model some detractors believe favors wealthy individuals. Forward’s services boast a smattering of services, including basic screening, blood tests, wellness services, wearable monitoring as well as access to an artificial intelligence system.
Armed with the bells and whistles of a modern tech startup, Forward is adding to the growing list of companies seeking to disrupt the care delivery system. As the industry attempts to shift patients away from over-utilizing hospitals and lead to more of an outpatient/preventative care model, patients are being seen on a spectrum of acuity. This is markedly different from the traditional fee-for-service model. Therefore, companies are looking to make fiscal gains while offering access to high quality care services across the acuity continuum. For another recent example, Oscar opened a primary care clinic in Brooklyn for its members.
“Healthcare is not a repair shop but an ongoing relationship,” Aoun was quoted in USA Today. This quote shows exactly how care delivery providers are beginning to think about customers in the long term. As a fee-for-service model is slowly chipped away, provider-patient relationships will be increasingly important as that could help fuel a doctor “brand loyalty.”
It looks like these companies are strategically evaluating the needs and the ability to make a profit and deliver a service that the average and even the above average potential patient is willing to pay for. And with more insurance companies and government agencies realizing the efficiencies and cost savings, more will consider funding these services. I think that these disruptors, which, strategized and established these healthcare alternatives back in the Obama years, that President Trump’s business background and bias for reducing regulations and allowing the business community to grow will stimulate more startup alternative systems to flourish as the demand grows.