The fusion of video technology and medical diagnoses still carries the promise of disrupting health care at lower cost, according to American Well co-CEO and president Roy Schoenberg — even though it will require the health care industry to pivot significantly.
Telehealth is used in a variety of formats, including web chats, phone calls and video conferencing, and is employed by health care operators like insurance companies, doctor’s offices, a hospital or pharmacy.
Its original purpose in the health care system was as an urgent care solution — a way to save health insurers and patients the cost of an emergency visit in exchange for a convenient and quick analysis from a video chat.
But 15 years later, there is a realization that telehealth is lagging in its original promise, in part due to slow sales cycles and low adoption of the technology. Yet Schoenberg insisted to Yahoo Finance that the field can still fulfill its original mission.
“The way we look at telehealth today is the way people looked at Amazon when Amazon was selling books online,” he said.
“Amazon completely upended the retail business, they were trying it out through books. Telehealth is going to upend health care and it’s tried it out through urgent care,” Schoenberg added.
Yet the debate over how telehealth can make its leap into Amazon’s league is still an open question, especially amid cost concerns.
American Well currently boasts 150 million users, including 55 health insurers, as partners, as well as a handful of employers and other retail partners. They also work with 2,000 hospitals, where a significant portion of business comes from. Unlike competitors such as Teladoc (TDOC), American Well is largely paid through insurers instead of employers or independently.
Via a partnership with Cisco, the privately-owned American Well is looking to bolster those numbers by expanding telehealth to elder patients. American Well previously announced plans to harness in-home TV sets to deliver broad-based medical advice, planning to ride the transformational wave of an industry that’s modernizing — slowly but surely.
That plan is, despite some hurdles, still set to launch in 2020, Schoenberg said.
“I think the relationship is changing fast. Unlike health care that usually moves in a glacial pace, this is technology and technology goes much faster,” Schoenberg said.
“This is the most exciting time that I can probably remember in telehealth, because for the last maybe 13 to 14 years, what we were going to do was limited to urgent care,” he said, noting that the evolution of technology in the health care field has opened up brand new frontiers.
“Now that the ability to deliver health care over technology has become an acceptable way of practicing medicine and delivering care, now, everybody has started rewriting the whole world of health care,” Schoenberg stated.
As more advanced tech takes root in the field, hospitals and health systems “are reimagining where they are going to care for patients,” the executive said.
Like a concierge
Schoenberg launched American Well back in 2006 with his older brother, Ido. At the time, the two entered a space where a remote visit was seen as transactional — no commitments, no history, no promise of future interactions.
Now, the company sees itself as “in the business of logistics. What we do, what we run, is a switchboard. It’s a distribution for live health care services,” the CEO added.
With more people willing to use it — and convinced that it is a safe enough method for health care despite occasional complaints— Schoenberg believes American Well has found the recipe for success.
Telehealth lets doctors find specialists if their hospital or health system doesn’t have one, while oncologists can follow-up with cancer patients from the convenience of their home. Meanwhile, physicians can follow-up with their patients any time.
Enhanced connectivity through mobile apps and electronic health records makes it seem “as if you signed up to a very good concierge practice,” Schoenberg said.
Calling the new uses of the technology “a new insurance product,” he described the advancements as “a new way to imagine...your journey in consumption of health care. It’s way broader than the urgent care we have today.”
With billions in capital flowing to digital health overall, Schoenberg told Yahoo Finance that there are benefits to American Well staying private, but in terms of future growth, all options are on the table.
The company has already raised half a billion dollars, and expects telehealth will remain a hot ticket item for venture capital funding for future growth.
Staying private “gives you a lot of autonomy to make decisions that are more disruptive in the market, you can be more strategic that companies who have to move quarter by quarter to generate numbers,” he said.
In addition, the technology is developing and being reimagined at a pace that requires quick and nimble adaption— which would be harder as a public company, Schoenberg said.
“One of the places you want to be when that happens is have ample flexibility ...to bring in a lot of other capabilities that you can’t buy with pure cash,” he said. “You have to buy with currency that goes beyond that currency that has long staying power.”
Anjalee Khemlani is a reporter at Yahoo Finance. Follow her on Twitter: @AnjKhem