Should American Well go ahead with its core product online care? Explain Why it should or should not.
If yes, then how should it do it? American Well should go ahead with its core product Online Care because of the following reasons: a. Technology is one of the strengths they have harnessed in implementing Online Care and this can further serve to block competition in the future b. They had the first mover advantage and progress in this segment with maximum customer satisfaction will provide American Well the opportunity to become the definitive leader in Online Care c.No huge investment or hiring of resources will be required to continue the operations d. If they fail in this venture (their first and core product) none of their extensions would then have a potential to capture the market e. They had good financial support of many sophisticated and angel investors f. Managerial expertise of both Ido and Roy in handling this sector and their previous track record in this area is an advantage which they can leverage while marketing this product g.
Market demand of such a product was huge as according to a survey of 2006, 74% of the respondents wanted such a service h. Value proposed to all the players with this service created a win-win situation for all and hence growth in this segment was inevitable.Health insurance companies could save $3. 36 per patient per month (Exhibit 9) and patients too could exercise choice and convenience According to Exhibit 11 (selected cities also shown above), Boston, Los Angeles and Washington DC has the highest average time new patients wait for appointment with family practice physicians (62, 58, 30 days respectively).
This is a great opportunity for American Well to transfer this segment of people who still go for family practitioners to online health care segment by helping them to utilize their time efficiently and cater to their health needs immediately. Hence, National Roll-out Plan of its core product by starting off with these cities will be a great plan to progress in its core product and emerge as a leader in the near future.Should American well go ahead with Team Edition? Explain why or why it shouldn’t. If yes, then how should it go about implementing the additional service? Based on our analysis, we feel Team Edition is the natural extension of the existing services of American Well.The service involves moving ahead the typical PCP and patient interaction over internet and involving the specialist in the online space as well without any additional costs. This key feature has the capability to serve as a differentiator for American Well as the market competition in the online healthcare space is high and hence differentiation is of utmost importance.For American Well, offering Team Edition is a good value proposition as it allows the company to add an additional service in its offerings at no substantial additional costs (the technology platform developed for the core service can be modified to include Team Edition as well).This results in business expansion and increased brand awareness Furthermore, issues pertaining to acceptance are negligible as customers are already well versed with the technology platform and comfortable with the same For its core customer segment of health insurance companies, the add on feature is highly beneficial majorly because of two reasons:oFirst, additional cost savings for the companies would be substantial due to early detection of certain medical problems thereby reducing coverage for patients (as patients can immediately take the opinion of the specialists, it results in early detection and thereby reduces long term insurance coverage)oSecond, having Team Edition as an additional option for their insurance packages would place them as a much more attractive option for Employer groups/multinational corporations and institutions as the range of services offered are broader But, we have also observed that its core product has not adequately achieved the desired market penetration and there is a lot of room for the core service to grow (see exhibit 2 below).
Although, American Well has taken steps to improve the situation by striking deals with more health insurance companies to further promote and create acceptance of their online care service. Hence, American Well should definitely consider launching Team Edition but it should only do so after it has adequately catered to the demand for its core product in cities where patient waiting times for PCPs are high. (Cities such as Boston, Los Angeles and Washington DC)The company should then subsequently go for an aggressive launch of Team Edition in cities such as Miami (see exhibit 1 and 2) where the patient waiting times for specialists are high and the demand for its core product has been satisfied. Doing so, the company can capitalize on its add-on service and gain additional profits as in such markets, the feature will serve as a key differentiator.Based on the above data, we can conclude that for cities such as Miami, Seattle, Portland, Dallas and Philadelphia, Team Edition can be launched as the average patient waiting times for FPP or PCPs is much lower as compared to other cities Should American Well go ahead with the new customer segment? Explain Why and How?The new customer segment for American Well consists of hospital, health clinic, pharmacy.
•FOR HOSPITAL OPPORTUNITIES oOut of the 5500 hospitals (where total expenditure in 2008 was $718. 4 billion, which is approximately 30. 72% of the total expenditure), 5000 hospitals are already captured by Cisco Telepresence (Which provides real time live video conference service enabling interaction between health care provider with physicians as well as sharing medical data).Also Relay Health ,another competitor of AM already working with 50 Hospitals oSimilarly, Cisco Telepresence collaborated with 600,000 physicians (whichare approximately 60. 60% of the total physicians in U.
S. ) through these hospitals. Another competitor Medfusion already tapped 28,000 physicians for providing their service Recommendation oSince very less opportunity is left for AM (8. 18% of the whole market) to penetrate into hospital market.
So they should not focus on hospital segment. •RETAIL CLINICS OPPORTUNITIES: oRetail clinic is consisting of 147,000 nursing practitioners. Also from exhibit 2, it is evident that approximately 24% ($561.
9 billion) of the total expenditure is spent on Physicians, clinical, and other professional services oThere is no competitor present in the market Recommendation oSince retail clinic is untapped market, so there is a good market opportunity for American Well to cater.American Well can add value to patients to get a second opinion in retail clinic immediately with a physician online if they wish or if the NP is not able to address patient’s issue oSince Nurse practitioners are highest level clinical staff at retail clinic, offering accesses to physicians would boost the perception of legitimacy of the clinic •PHARMACY OPPORTUNITIES: oFrom exhibit 2, pharmacy expenditure consists of approximately 10%.($234.
1 billion) of the total expenditure in 2008. So we can conclude that pharmacy market has got huge potential. No competitor is yet present in this segment. Recommendation oAmerican Well could target the pharmacy market. It can provide pharmacists the facility to interact with patients online and answer queries of the patients regarding the drugs.
Since, it is again an untapped market, which has huge potential; American Well could play a leading role and get benefit out of the service. Should American Well go international?Explain on why it should do so and how should it go about it? American Well should weigh the pros and cons before making a decision on going international •PROS oCustomers in Australia, Germany and United Kingdom are interested in availing their services oExposure to international markets and recognition worldwide •CONS oIt will require extensive changes in the American Well’s Organizational structure oIt may require them to customize their product based on the needs, governing policies and regulations of different countries.oThere is risk involved in diverting resources from the current market in which they are not fully developed to new international markets which will need substantial investments Based on the pros and cons associated with the decision, best course of action would be in the following order: •NATIONWIDE ROLL-OUT OF ONLINE CARE: AFTER AN ANALYSIS OF THE DATA PROVIDED for the waiting time of the patients to meet their physicians in various cities of US, we have concluded that the services should be rolled out in cities like Boston, Los Angeles and Washington D. C where the wait time is relatively high and hence it would help capture a larger market share•LAUNCH OF TEAM EDITION IN ESTABLISHED MARKETS: GIVEN THE DATA regarding the waiting time of the patients to meet specialists, rolling out Team Edition in cities such as Miami where the company’s services are well established would be a competitive advantage for American Well •LAUNCH PRODUCTS IN INTERNATIONAL MARKETS:TO EXPAND INTERNATIONALLY American well need to completely re-organize the company structure and enter into partnerships with different companies in different countries. It will be possible only after company establishes itself as market leader in home market first.