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In my earlier post, I focused on key success factors for driving “virtual care” uptake in India. This article would focus on framework that entrepreneurs / startups / strategists can leverage to build an “at scale” and “comprehensive” virtual care company.
Given that we are looking at “SaaS” based business models, it may be prudent to explore success factors for scaling up such an enterprise. Following are select pearls of wisdom captured from an excellent talk, titled “Scaling from $1MM to $500MM ARR”, delivered by Karen Peacock (COO, Intercom) at annual 2019 Saastr conference:
With core objective and success factors taken care of, let us dive right into the framework. Just to reiterate, the framework would be applicable to health-tech companies looking at “virtual care” as a core business area.
Safety: Within healthcare, three things are mission critical – “do no harm”, “every life is important” and “patient healthcare data privacy”. So, virtual care companies need to have “best in class” safety (data or clinical) ingrained within the culture. With regulations constantly evolving in India, one would be better off bench-marking against global best practices rather than looking to exploit existing loopholes. This may result increase “cost to serve” in the “price sensitive” Indian market through investment in compliance like HIPAA, GDPR etc. but it would be a key differentiator among “quality conscious” customers.
Specialize: A look at Teladoc’s (one of the largest virtual care companies) financials, shows that gross margins are highly volatile and seasonal e.g. it came down during their Jan-Mar’20 Qtr (60% vs 65% in Jan-Mar’19). So, the tech-based platform needs to supplement itself with "virtual care ready" specialties e.g. dermatology, mental health, tele-stroke, nutrition. “Comprehensive specialization” is a must have rather than good to have. This would require thematic collaborations with hospitals, device manufacturers, pharma and digital care players.
Select: The success of the platform depends on “active use” and value delivered to customers and partners. In order to consistently deliver quality customer experience, players would need to develop select pool of prescribers (across specialties) that adopt best practices, have top-notch soft skills, are aware of Do’s and Don’ts, are adept at using productivity and decision support tools. This may require robust on-boarding and training program with clinical as well as non-clinical markers for gradation e.g. experience, awareness, technological readiness etc. “Virtual care” certification programs may be designed to increase stickiness (points based and scope for upgradation) and differentiation.
Supplement: With payer landscape relatively underdeveloped in India, a “safe” and “clinical” technology platform may find takers among next big segment i.e. hospitals looking to integrate virtual care within their operations. With increasing presence of chains as well as adoption of “hub and spoke” play, white labeling “virtual care” platforms for hospitals can be a major share of revenue. Cloud-based technology would further enable efficient penetration within standalone setups. Partnering with pharma can be a source of revenue e.g. platform for training or content development.
Sustain: As the virtual care landscape further evolves in India, we would need to closely watch out for “payers” and “employers”. These segments are major revenue source in developed countries. In India, payers focus more on in-patient and employers have more interest in wellness offerings. Favorable trends around reimbursement or increased acceptance / budgetary allocations among employers, can help sustain our operations. Specialization can help develop “value-based offerings” (Livongo, Omada in US) e.g. payout depends on improvement in vitals like Hb1Ac, cholesterol level etc.
Subscribe: “Active use” would require offerings beyond “tele-consult” visits. This would need clarity around “product to platform transition” i.e. platform to build upon, platform to integrate with or become a platform. For “virtual care” players, “becoming a platform” may aid in providing access to digital care players, e-pharmacies, diagnostic or wellness offerings. This would help address the key unmet need of “reliable healthcare information at one place”. While “per visit” fees seems to be the current trend, “value driven monthly subscription” can improve active usage e.g. less delivery fees, space for health records, family health packages etc. in lieu for a monthly subscription.
Self-care: Virtual care offerings need to have strong “self-care” component thereby improving prevention, adherence, personalization and health seeking behavior. Success of digital care within chronic care e.g. diabetes, mental care, hypertension etc. can been largely attributed to self-care. This brings us to the role of chat bots and AI / ML in healthcare. The founder of Ada (health companion with 1 MN users in India and 6 MN globally) mentioned that users rated chat bots positively as “finally someone was patiently listening”. As feedback further improves accuracy and personalization of AI / ML offerings, it bodes well for virtual care.
A word of caution - as they say, "startups rarely die of starvation, they usually die of indigestion" - so, transition towards a scaled up virtual care platform would require patience and phased approach.
With virtual care taking initial steps toward becoming a “reality”, I think the next decade will be the era of India innovators focusing on “safe technology”, “clinical know-how” and “superior experience”, to improve healthcare access. So, what is your success framework?
In my earlier post, I focused on key success factors for driving “virtual care” uptake in India. This article would focus on framework that entrepreneurs / startups / strategists can leverage to build an “at scale” and “comprehensive” virtual care company.
Given that we are looking at “SaaS” based business models, it may be prudent to explore success factors for scaling up such an enterprise. Following are select pearls of wisdom captured from an excellent talk, titled “Scaling from $1MM to $500MM ARR”, delivered by Karen Peacock (COO, Intercom) at annual 2019 Saastr conference:
- Expand your customer base by focusing on NOT what they want but what they need e.g. they may ask for budgeting tool, but cash management software better serves their needs
- Watch what your customers do NOT what they say e.g. they may say quality is my top selection criteria but in actual practice, always goes for cheapest option
- Your strategy is as much about what you DON’T do e.g. few short-term gains are worth a miss
- Add-on purchases happen upfront - nail your purchase experience and “show” rather than “tell”
- Keep reinventing – find the market fit again and again
- Fall in love with the problem NOT the solution
- Focus on active use and DO NOT fall for vanity metrics like visits, downloads etc.
- Decide your platform play – focus on delivering value to customers, partners and then yourself (yes, in that order)
With core objective and success factors taken care of, let us dive right into the framework. Just to reiterate, the framework would be applicable to health-tech companies looking at “virtual care” as a core business area.
Safety: Within healthcare, three things are mission critical – “do no harm”, “every life is important” and “patient healthcare data privacy”. So, virtual care companies need to have “best in class” safety (data or clinical) ingrained within the culture. With regulations constantly evolving in India, one would be better off bench-marking against global best practices rather than looking to exploit existing loopholes. This may result increase “cost to serve” in the “price sensitive” Indian market through investment in compliance like HIPAA, GDPR etc. but it would be a key differentiator among “quality conscious” customers.
Specialize: A look at Teladoc’s (one of the largest virtual care companies) financials, shows that gross margins are highly volatile and seasonal e.g. it came down during their Jan-Mar’20 Qtr (60% vs 65% in Jan-Mar’19). So, the tech-based platform needs to supplement itself with "virtual care ready" specialties e.g. dermatology, mental health, tele-stroke, nutrition. “Comprehensive specialization” is a must have rather than good to have. This would require thematic collaborations with hospitals, device manufacturers, pharma and digital care players.
Select: The success of the platform depends on “active use” and value delivered to customers and partners. In order to consistently deliver quality customer experience, players would need to develop select pool of prescribers (across specialties) that adopt best practices, have top-notch soft skills, are aware of Do’s and Don’ts, are adept at using productivity and decision support tools. This may require robust on-boarding and training program with clinical as well as non-clinical markers for gradation e.g. experience, awareness, technological readiness etc. “Virtual care” certification programs may be designed to increase stickiness (points based and scope for upgradation) and differentiation.
Supplement: With payer landscape relatively underdeveloped in India, a “safe” and “clinical” technology platform may find takers among next big segment i.e. hospitals looking to integrate virtual care within their operations. With increasing presence of chains as well as adoption of “hub and spoke” play, white labeling “virtual care” platforms for hospitals can be a major share of revenue. Cloud-based technology would further enable efficient penetration within standalone setups. Partnering with pharma can be a source of revenue e.g. platform for training or content development.
Sustain: As the virtual care landscape further evolves in India, we would need to closely watch out for “payers” and “employers”. These segments are major revenue source in developed countries. In India, payers focus more on in-patient and employers have more interest in wellness offerings. Favorable trends around reimbursement or increased acceptance / budgetary allocations among employers, can help sustain our operations. Specialization can help develop “value-based offerings” (Livongo, Omada in US) e.g. payout depends on improvement in vitals like Hb1Ac, cholesterol level etc.
Subscribe: “Active use” would require offerings beyond “tele-consult” visits. This would need clarity around “product to platform transition” i.e. platform to build upon, platform to integrate with or become a platform. For “virtual care” players, “becoming a platform” may aid in providing access to digital care players, e-pharmacies, diagnostic or wellness offerings. This would help address the key unmet need of “reliable healthcare information at one place”. While “per visit” fees seems to be the current trend, “value driven monthly subscription” can improve active usage e.g. less delivery fees, space for health records, family health packages etc. in lieu for a monthly subscription.
Self-care: Virtual care offerings need to have strong “self-care” component thereby improving prevention, adherence, personalization and health seeking behavior. Success of digital care within chronic care e.g. diabetes, mental care, hypertension etc. can been largely attributed to self-care. This brings us to the role of chat bots and AI / ML in healthcare. The founder of Ada (health companion with 1 MN users in India and 6 MN globally) mentioned that users rated chat bots positively as “finally someone was patiently listening”. As feedback further improves accuracy and personalization of AI / ML offerings, it bodes well for virtual care.
A word of caution - as they say, "startups rarely die of starvation, they usually die of indigestion" - so, transition towards a scaled up virtual care platform would require patience and phased approach.
With virtual care taking initial steps toward becoming a “reality”, I think the next decade will be the era of India innovators focusing on “safe technology”, “clinical know-how” and “superior experience”, to improve healthcare access. So, what is your success framework?
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