The Future of On-Demand Healthcare: Driving Investment and Meeting Consumer Expectations

It’s no surprise that during this era of increasing personalization consumers are looking for customized service offerings in all aspects of their lives—including healthcare. A recent article in the Wall Street Journal reminded us to check back into a topic that’s grabbing the attention of consumers, payers, and providers alike. To recap from our post in August of last year, consumers have begun prioritizing accessibility and comfort in regards to their method of care delivery. In addition, the various changes to the healthcare ecosystem, like the full implementation of the Affordable Care Act and the unfortunate uptick in cost of care and insufficient outcomes, have either stimulated or curtailed a shift from the ER to on-demand care.

A recent report from Accenture revealed that on-demand healthcare investment will likely grow from $250M today to more than $1B by 2017. Much like every other player in the game, we’ve been thinking about the million dollar question: why have investors been so eager to pour capital into these young companies? For healthcare-related companies the equation is simple; unfavorable care outcomes coupled with increasing costs have yielded a high demand for a new type of care delivery.

While the healthcare industry is difficult to navigate and fraught with regulation, incumbency, and politics, tightly-integrated technology and services are allowing for capital efficient models that can scale quickly. A new generation of entrepreneurs are entering to appeal to a recently-empowered class of consumers who want to take charge of their own healthcare costs and outcomes, just as they do in every other aspect of their lives. Thus, the perfect storm of innovation and ample capital was created and has yet to lose momentum.

Similarly, this market has begun creating measurable value to consumers, especially considering the rapid shift of plans towards significant out-of-pocket cost requirements. An article released by the WSJ entitled, “Startups Vie to Build an Uber for Health Care,” reported that employee contributions are nearing $5,000 annually, and, just last month, a pilot project providing on-demand care for 8,400 Medicare patients with multiple chronic-conditions cut costs by more than $3,000 per patient. Providers are noticing the demand for this type of care and some are teaming up with startups to better satisfy their patients’ needs. For example, Centura Health, Colorado’s largest hospital chain, is partnering with True North Health Navigation, a Denver startup that offers on-scene care to 911 callers as an alternative to a costly ambulance ride to the ER. Centura plans to offer True North’s home-care services to its own employees and other patients whose costs it is responsible for under insurance contracts.

While consumer-paid models attracted early investor interest, we are also intently watching for the adoption of this on-demand care model in payer-focused businesses. Aspire Health, which offers both in-home and outpatient palliative care services to patients, physicians, and health plans, has adopted a derivation of the emerging “Uber” based healthcare model. Both Landmark Health and Aspire Health  have adopted derivations of the “Uber” healthcare model. By providing highly personalized care focused on the specific needs of each patient (the former focused on primary care, and the latter on palliative care) both companies are bringing value to the payer market by reducing medical expenses, creating greater satisfaction and engagement, allowing for more accurate Hierarchical Condition Category (HCC) scoring, and improving clinical outcomes. Blue Cross MN’s recent investment in Retrace Health  here in our own backyard may speak to a larger trend here as payers seek to find their place in a consumer-friendly healthcare world. With all of this taken into consideration, it’s hard to imagine that many other businesses like Landmark and Aspire will not adopt similar models in order to truly optimize their care offering in today’s evolving healthcare environment.

The influx in investment that’s been pouring into these companies hasn’t been much of a surprise. Consumers have been craving personalized services for a while now, and companies like Uber are catalyzing the shift at a shocking rate. The on-demand shift is finding its place in the healthcare industry as well, and it’s likely here to stay. TripleTree has been at the forefront of research surrounding the development of such on-demand, tech-enabled services, and we are eager to observe the market capitalization of this emerging sub-market’s most innovative players.

Let us know what you think.