This is not a story about COVID-19, although COVID-19 is a key catalyst. This is the story of a new healthcare ecosystem, which will allow the development of new, diverse and creative healthcare experiences.
Today I can acquire a user on Facebook, give them access to physicians via partnership with Wheel, have medicines seamlessly shipped to their homes via Truepill [Editor's note: Hogg is a consultant for Truepill], deliver a home-lab experience via Everlywell, integrate a wireless blood pressure cuff from Omron, create a seamless referral flow with data from Ribbon, and even get paid for much of this via traditional fee-for-service reimbursement, processed via Eligible.
We finally have the right mix of available tools and services, available by API and white labeled, to build quickly. For the first time it feels relatively easy and inexpensive to experiment, test and iterate new healthcare delivery experiences.
To this rich primordial soup we added COVID-19. We forced millions of people, and their doctors, to have their first telemedicine experiences, which they largely loved. We also decided to universally pay doctors for telemedicine visits.
We are about to witness an explosion in virtual-first care models. Can we move beyond transactional telemedicine services to create new long-term virtual-first experiences? What fundamentally new opportunities are opened by virtual-first care? Finally, can virtual-first models get paid at scale, aggregate patients and power, and even, ultimately, fix our broken healthcare system?
Telemedicine is here to stay
Telemedicine is not new, and can take many forms, from a synchronous video visit to an asynchronous SMS exchange. While telemedicine has been around forever, COVID-19 will mark the point at which it became generally accepted by the population.
With this new acceptance, "telemedicine" will get mixed in and mashed up with other "standard ways" of delivering care to build wholly new care models from the ground up. We will see telemedicine combined with all forms of in-person care, combined with remote monitoring from devices, combined with home-based care. We will see a variety of new virtual-first healthcare delivery models tested in the coming years, but must wait to see which models will thrive.
To date, telemedicine interactions for most consumers have been largely transactional. Most telemedicine providers were very good for one-off issues, replacing urgent care or refills for prescriptions.
There have been many success stories with direct-to-consumer healthcare experiences, such as Roman, Hims/Hers and Nurx, which charge consumers directly for telemedicine plus medicine delivery. These offerings have strong brands and good marketing, but are largely transactional in nature.
We will see many more of these types of transactional experiences and consumer brands, with expansion into different diseases and populations.
However, many companies, including some of the ones above, will try to push deeper into true patient care. They will attempt to build long-term relationships between people and their care teams, and manage more complex chronic conditions.
Long-term care is complex
Providing long-term care is fundamentally different from providing transactional healthcare experiences. There are challenges to communication, relationship-building, coordination and the integration of multiple facets of care.
One key challenge is that at some point everybody needs to be seen in person for something. Sometimes a patient needs to be physically examined, imaged or seen face-to-face for a myriad of other reasons. This leads to a hard problem for new solutions trying to be mostly virtual and scale quickly. In fact, all longitudinal virtual care companies will be hybrid care companies.
We will see many different approaches to this in-person problem. We will see companies add new virtual capabilities to their existing physical practices, like One Medical or Oak Street. We will see companies build new clinics to pair with their virtual experience in specific geographies.
Some will tap the growing healthcare ecosystem, and try to solve this problem scalably with partnerships. They'll try to partner with Solv for access to a huge national network of urgent care clinics; partner with Heal for home visits; partner with CVS for access to Minute Clinics, or Carbon Health for local primary care; or even buy a company that enables a workforce of home care providers, as Roman just did.
With all of these great services and potential partners available, building the machine that delivers great long-term, virtual-first care experiences seems possible, and even reasonable. The magic will lie in how all these pieces are put together into seamless, elegant and effective experiences.
So what is fundamentally different about virtual-first care?
The expansive opportunity of virtual-first care
Today healthcare is local. This limits the number of addressable patients, limits the number of recruitable providers and limits the number of facilities accessible. These limitations force solutions focused on breadth, not depth.
Virtual-first care companies need to think and build differently from the beginning. Virtual-first care companies can widen their nets for customer acquisition geographically, dramatically increasing the number of addressable patients.
Aside from customer acquisition cost advantages, this increase in addressable patients will lead to the ability to segment populations and build experiences tailored to specific groups with specific needs. You can either segment geographically, or segment demographically, but usually not both.
Companies will personalize care protocols, recruit specific care teams, and incorporate specific medicines and labs into these new personalized experiences. These companies will develop clear and targeted brands focused on these specific populations.
We will see a continued proliferation of virtual and hybrid care-delivery options focused on specific groups such as Maven, the “next generation of care for women and families.” Folx Health delivers “queer & trans healthcare delivered on our terms.” Spora Health is “primary care for people of color.” All have strong and wonderfully targeted branding, and compelling value propositions.
We will see new approaches to deliver virtual and hybrid primary care and specialty care to poor and underserved communities. Companies like Cityblock that focus on Medicaid and dual-eligibles are now expanding virtual-first offerings to grow their footprint in these populations.
We will see primary care specifically for men with cardiometabolic disease, for people with GI issues and for women in their forties and fifties, as perimenopause becomes a key health characteristic.
We will see new virtual-first solutions for pediatrics, then for kids with food allergies or specifically for kids with ADHD. I bet these all already exist in some form. We will see new care delivery experiences for any segment that can benefit from more tailored care, and for any segment that can be effectively targeted by a more tailored brand.
Show me the money
The last, final catalyst will be payment change in healthcare. The prevailing wisdom is that reimbursement for telemedicine services will survive beyond COVID-19. This opens the door to broad payment for more creative and less expensive virtual-first models.
Previously, all digital health and telemedicine companies had to strike individual contracts with payers and employers, then market only to those pools of patients. The nature of this B2B sales model and the gatekeeping it creates have made it harder to experiment and iterate with experiences.
With broad insurance coverage for telemedicine offerings, if you can convince enough individuals to use it, you can build a successful business.
Additionally, the recognition of telemedicine as a valid way to establish new patients means that new virtual-first care companies can explore existing alternative payment methods and take financial risks. Companies like Cityblock, Oak Street and Iora generate a lot of revenue and will make (or lose) a lot of money if their patients do better (or worse) than average.
Fixing the mess that is healthcare
Healthcare organizations in the U.S. strive to obtain scale and mass in order to wield power in pricing and contracting. This level of scale and mass comes from the aggregation of patients, physicians, facilities and buyers (employers).
Integrated delivery networks (IDNs) seek to aggregate physicians and facilities (and thus patients) in specific regions, and then wield power with payers. Payers seek to aggregate individuals and employers (and thus patients), and then wield power over delivery organizations. Pharmacy benefit managers (PBMs) seek to aggregate employer contracts (and thus patients), and then wield power over pharma manufacturers.
These organizations have tremendous inertia, exemplified by a trove of interconnected contracts, making change exceptionally difficult. Our current location-dependent healthcare system leads to local monopolies wherever you look, and ones that are resistant to forces of change.
For years (decades!) we have tried to remake the existing healthcare system into a more modern and more efficient system with interconnected data, more seamless care coordination and better outcomes for everyone. We have largely failed.
Perhaps to move these large objects with so much inertia and actually create "transformation" in healthcare we need a new approach. Perhaps we can change the center of gravity of the whole system, begin to topple it and create real change.
What we need is a brand new way to aggregate patients, and thereby power, that is outside of the current location-dependent, monopoly-ridden system entirely.
Perhaps the proliferation of new virtual-first care offerings will create this new center of gravity, upset the balance and finally facilitate real healthcare change and reform in the U.S.
About the author: Chris Hogg is a digital health advocate and entrepreneur who most recently served as COO and CCO of Propeller Health, which was acquired by ResMed in 2018. Prior to Propeller, Chris cofounded an early mobile health company in 2011 that used design and data science to promote behavior change. Chris is currently taking a break and thinking about the future of virtual-first care.