On-Demand Healthcare Investment Could Reach $1 Billion In 2017

By Christine Kern, contributing writer

The “Uberization” of healthcare.

Funding for on-demand healthcare companies providing location-based offerings with 24/7 and near-real-time services could reach $1 billion by 2017, according to an Accenture report.

“On-demand healthcare is fundamentally changing — and enriching — the doctor-patient relationship, making the physician much more accessible to patients while simultaneously reducing costs,” explained Kaveh Safavi, M.D., J.D., senior managing director for Accenture’s global health business. “With no end to this type of investment in sight, there’s an enormous opportunity for companies to offer fast, convenient and customized user-experiences that ultimately improve the patient experience and outcomes.”

Just two of the top 10 funded on-demand companies — Teledoc and American Well — focus on healthcare, Forbes reported, although the healthcare segment grew from four firms in 2010 to 42 in 2014. Investment is likely to remain strong as payers agree to reimburse for on-demand healthcare services. Already Anthem, Aetna, UnitedHealth Group, and a number of Blue Cross and Blue Shield plans cover some services.

On-demand healthcare is also perceived to create cheaper visits, more widespread use of smartphones, growing interest in digital health options among seniors, and competition among insurers to offer best-in-class benefits packages, according to Accenture.

The main forces driving interest and investment in on-demand healthcare include:

• Government support: Large payers are now reimbursing virtual doctor’s appointments, with government backing. Twenty-nine (29) states have telehealth parity laws, up from 20 in 2014.
• Attractive economics: On-demand virtual visits are less expensive for consumers: up to 40 percent less expensive for primary care, 28 percent less expensive for urgent care, and 3 to 7 percent less expensive for emergency-room visits.
• Technology maturation: Roughly 190 million people in the U.S. own smartphones. As the number of mobile users rises, so too will the demand for mobile health services.
• Cultural adoption: Expectations for seamless, coordinated services are not limited to Gen X or Y; more than half (57 percent) of seniors are also interested in digital health options.
• Plan design: Payers want to create best-in-class benefits packages with new products and services that will attract and retain members. On-demand services can be the differentiator.

“Investment in on-demand healthcare and collaboration between industries will ultimately precipitate a shift away from a goods and services model to a ‘life care’ model, providing patients with personalized services that addresses a multitude of daily needs,” added Safavi.
 

Yet this “Uberization” of medicine may not be the positive thing it appears, according to the Los Angeles Times. He posits the question of “whether healthcare is a service that can be reduced to fundamental like local transportation. Is diagnosing or treating a disease the same thing as driving a car?”

Hiltzik concludes, “The truth is that no one even knows yet if Uber's model is a profitable one for Uber itself. For a capital and knowledge-intensive sector like healthcare, in which a missed or mistaken diagnosis can mean injury or death, the idea that an app is the answer looks more like fantasy.”