App-first care points the way to the on-demand healthcare economy

Providers, look to your business models: The “app-first” approach to on-demand healthcare delivery is now under way.

Digital tools are punching holes in the rapidly emptying moat around many healthcare delivery services. Take Amazon Care, a pilot program launched by Amazon for its Seattle-based employees last autumn. Enrolled employees may use chat or video to consult with a caregiver; if necessary, a nurse is dispatched to the employee’s home, and prescriptions may be sent by courier.  Little doubt that Amazon’s acquisition of PillPack will help streamline the prescription delivery.

While currently available only to its employees, this program is clearly Amazon’s trial run and incubator for introducing a commercial health service. The company’s recent acquisition of digital-native Health Navigator lends even more weight to this thinking. Health Navigator conducts digital triage tailored to e-health encounters. Notice there are no traditional provider settings in Amazon Care.

Lowering Barriers to Care

Not to be outdone, Walmart announced plans to become “America’s neighborhood health destination.” Last fall, it opened its first Walmart Health center, which provides primary care, labs, X-rays and EKGs, and counseling, dental, optical, hearing and community health education services in one facility. Clear prices are posted, such as $20 children’s check-ups and $25 adult teeth cleaning. The company reports it is using technology to avoid paperwork and streamline scheduling, check-ins, estimates, payments and other activities.

At health industry events throughout 2019, we saw dozens of vendors in the “care on-demand” space. They promise to shave wait times for appointments to hours vs. days or weeks via telehealth consults. These vendors say consumers will flock to convenient, high-quality care delivered at lower prices.

Consumerization of Care

What does all this add up to? For many years, healthcare providers might have seemed immune to the disruption digital technologies have wreaked in other industries. How could delivering care be likened to selling books or retail services? But we’ve been predicting digital technologies would compress the healthcare value chain and force even providers to adopt new business models.

That’s happening now. The “healthcare anywhere” business model we discuss in our most recent report is emerging, shaped in different ways by Amazon, CVS, Walmart, startups and would-be healthcare players from Bose to Best Buy. These models largely disintermediate traditional providers of care and undermine their value propositions. Given the national footprint of these new competitors, consumers could embrace these new models quickly. Healthcare providers must act rapidly to ensure their place in this on-demand healthcare economy.  

Start with these Investments

It will be a balancing act to maintain care quality while investing in the future. That said, we advise providers to make the following “no-regrets” investments to support great care while creating capabilities needed for a future of increasingly virtual care delivery. These investments include:

• Leading with an app. Build a digital-first patient engagement layer that offers health consumers the convenience, accessibility and affordability they expect from service providers today. At a bare minimum, offer email, text and chat options for physician and patient communication. Many health consumers are now wired for near-constant connectivity and expect to conduct transactions anytime, anywhere using tools in their homes and offices, from PCs and smartphones to virtual assistants. Our research shows next-gen consumers likely will trust algorithmic recommendations as much as brand reputation, so providers must play in this space.

• Invest in new technologies and build new capabilities, especially for data. It’s past time to master social, mobile, analytics and cloud. The urgent work now is to layer in artificial intelligence (AI) tools like machine learning (ML) and natural language processing. These are key tools for working with the floods of data that the Internet of Things will generate and 5G will deliver. Amazon and Walmart know how to use data to uncover customer preferences and identify ways to improve efficiencies and reduce costs. Providers must get equally data-savvy.

• Rethink operations. Redesigning the patient experience is central to competing for on-demand healthcare. Providing real-time data on price and quality is a must. By embracing value-based care, providers can focus on the patient. They can use their industry incumbency status to advantage, with their deep clinical expertise and data stores complementing the speed and innovation of tech giants and startups.

• Rationalize the technology foundation. It’s time to move off legacy systems and invest in next-generation plug-and-play technology platforms. The application programming interface (API) economy is here. Providers must tap quality innovations created by third parties instead of trying to do all the development themselves.

By providing more convenient and affordable access to care, the industry will likely unleash pent-up demand for preventive services. It may also create new demand for services, just as people who never considered taking cabs turned to Lyft and Uber as affordable options.

That said, with the rise of value-based contracts, healthcare providers must collect data that proves the value of incorporating on-demand care, such as reduced costs, better outcomes and improved patient satisfaction. Amazon and Walmart are probably already compiling this data to inform their next moves.