#americanwell healthcarestartup

[aeburns-blog]

American Well: Marketing and Targeting Challenges of a Health-care Start-up in the US

As a technology start-up in the healthcare space, American Well faces a number of targeting and marketing challenges. The American healthcare landscape is highly complex and fragmented, populated by patients and providers as well as public and private payers. In addition, healthcare in the US is governed by strict regulation, and therefore introducing any new service or change to the existing system will likely need to undergo intense scrutiny and approval. This is particularly true for a company like American Well, which is built upon transmitting sensitive patient data electronically in order to deliver remote, real-time care. Thus, American Well faces the challenge of overcoming regulatory obstacles and privacy restrictions, particularly related to HIPAA, before even considering its target customer and developing its marketing message.

When considering its target customer, American Well faces a number of options, each with its own challenges. The start-up considers a Direct-to-consumer (DTC) model, as well as a B2B model in which the company would transact with payers, or insurers, as part of a licensing arrangement. While the DTC model enables American Well to exert more control over the end-customer experience, the start-up elects a B2B model, as this will enable the company to more efficiently scale and generate recurring revenue. While American Well is able to offer a compelling economic incentive for insurers, particularly related to cost savings, American Well faces the challenge of the current economic and political climate, as the company is launched amidst a recession at a time when insurers are semi-paralyzed by uncertainty regarding the future of healthcare reform.

American Well has some success in securing pilots with insurers, however, the company’s marketing efforts are challenged by the many stakeholders involved in the US healthcare system. In addition to securing buy-in from insurers, American Well must also market to and attract providers to participate in the platform, as well as market to end-users, or patients, to ensure adoption. Employers represent a further important stakeholder, as end-user adoption is also dependent upon the healthcare options that employers provide to employees. The messaging that American Well employs must differ based on the needs of each of these populations. For example, for providers and insurers, American Well must emphasize the efficiencies delivered as well as cost-savings. Additionally, American Well must guarantee compliance with existing regulation and flexibility to adapt given impending regulatory change. Though American Well is not selling directly to patients, the company must also market to patients as end-users, and reassure people of the reliability and effectiveness of the system.

Ultimately, given that American Well operates in the healthcare space, the start-up must convey trust and reliability to all stakeholders. This is particularly challenging in an industry that is based upon personal interaction. American Well must essentially encourage stakeholders to alter their mental model of what it means to seek healthcare, and this is quite a challenge. This challenge is amplified by the fact that American Well itself is a start-up, and therefore must earn the trust of customers based upon not only its brand, but the altered behaviors that the company creates. Further, operations in the healthcare space is tremendously high-stakes. Any misstep that the company makes regarding customer experience could have dramatic effects on the company’s reputation and therefore sustainability.

Although American Well is recently launched in the US, the company is also considering product extensions. One refers to expanding the platform to include specialists, a project co-named “Team Edition.” Additionally, American Well is considering adding physical locations to sites where people already seek service as an additional revenue stream and means of increasing end-user adoption. Of the options considered, it is recommended that American Well pursue the development of kiosks in Drug Stores with walk-in clinics such as CVS and Walgreens. These kiosks can be used to alleviate demand on the providers that staff these locations (and potentially reduce costs) as well as help diagnose or troubleshoot individuals seeking assistance. This application will add value to patients, providers as well as the businesses in which the kiosks are located, and, most critically, aid in marketing American Well as a trusted brand. By located branded kiosks in these facilities, American Well can “borrow” the credibility of the retail brand such as CVS, as these retail stores offer a “halo” effect for American Well. Additionally, it is recommended that American Well pursue “Team Edition” and incorporate specialist providers into its system as it expands its footprint in the US. Although this additional service will add complexity when onboarding new customers, ultimately, it simplifies the end-user experience and offers patients a fully comprehensive healthcare solution. Satisfied patients will create stickiness on the platform, which will filter up and encourage increased adoption among providers and payers.

One final note: It is interesting that American Well is founded in the US and named with the national title, “American.” This is particularly interesting given the co-founders origin in Israel. I wonder what motivated their decision to found their company in the United States (other than perhaps that it presented the greatest financial opportunity), and what drove the decision to incorporate “America” in the name. I wonder if the founders were attempting to establish some credibility as outsiders to America themselves. Further, the national title could refer to “heritage” and “trust” and national loyalty, and in this way appeal to new customers despite the fact that the brand is new and the service is unproven.