Roy Schoenberg, CEO of American Well [L] and Jay Parkinson, founder of Sherpaa, have a lot in common: They both want to revolutionize healthcare delivery. But is that going to mean synchronous or asynchronous care? And how will we succeed in increasing user adoption of telemedicine? To dig into the specifics, we invited both men to debate the next steps for the industry.
Interview by Logan Plaster
Roy Schoenberg: Jay and I are remnants of the early days of the Health 2.0 conferences, and boy has the world changed.
Jay Parkinson: There have been a lot of success stories, but also a lot of casualties in the market.
Logan Plaster: Roy, what makes American Well unique in the market?
Schoenberg: We’ve been in the business of telehealth for almost 10 years now. We’ve always believed that telehealth should be blended into the traditional practice of medicine with the understanding that it really is a communication infrastructure that brings physicians and patients closer together. What you see in the media is that telehealth is a kind of quick fix, a way for anyone to get in front of a physician in two minutes or less. We have a slightly different view. We believe that we are a clinical communication infrastructure between patients and physicians fostering deeper and more intimate relationships. Today we serve about half of the health insurance plans around the country. We have 30 or so of the largest health systems in the world.
Plaster: Is that perspective unique in the telemedicine market?
Schoenberg: If you look at the people we serve, and you look at how our systems are designed, we operate very, very differently than the other guys out there. While we do fill an urgent care role similar to the Teladocs of the world, the vast majority of our business is spending time with the physicians and the health systems, doing all of the things that are less popular and less public, things like EMR integration, dealing with insurance and eligibility, dealing with physician work flow. If you think about infrastructure projects, that’s the investment in the highways and gas pipes. That has always been our approach. We’ve always believed that telehealth should become an infrastructure for care delivery rather than a quick x solution on the side.
Plaster: Jay, tell us what makes Sherpaa unique in the telehealth marketplace?
Parkinson: We see ourselves as a health service that is powered by a new genre of healthcare. You’ve seen how asynchronous messaging has really taken over the world from the synchronous phone call. That’s had a profound effect on how we communicate as a culture, and we’re bringing that to healthcare to solve the doctor-patient relationship. I think it’s a little bit absurd that in traditional health care our health stories have to be told within the confines of 10 minute office visits. That’s not really how health stories work. Things evolve and it is important to let people communicate those evolutions over time, around a core case. Our main difference in the healthcare space is this: We hire our doctors – more as a healthcare service than a platform – and then we carefully target companies that would understand and appreciate the kind of relationship that their employees could have with doctors. We’re working to match early adopter doctors with early adopter patients so that we can create what the future of healthcare delivery will look like. That is, once we get out of the confines of the transactions that power healthcare payments today.
Plaster: Jay, you’ve gone on the record many times eschewing video telemedicine in favor of asynchronous text. Could you explain why?
Parkinson: The reason we do that is that we don’t really want to change people’s behaviors too much. Apple has gone on the record saying that they serve about 40 billion iMessages a day, and only about 15-20 million FaceTime chats. In our three and a half years, we’ve never really had anyone ask for a video chat. Ninety-eight percent of our cases are taken care of over asynchronous text on our secure platform. Only about 2% of the time do we jump on the phone. Twenty-five percent of texted cases have photos attached. I think that photos combined with asynchronous messaging with the occasional use of phone is sort of the ideal means of communication for a few reasons. One, it doesn’t force people to think on their feet, on both ends. As doctors, if we get a case that we’re not particularly familiar with, we can go read up on it and then get back to the patient once we’ve brushed up on it. For the patient, talking with a doctor is stressful. If you can eliminate the concept of time and let them think about their responses and respond on their own terms, I think it’s just an ideal means of communication.
Schoenberg: I whole-heartedly agree that if you want to relieve some of the pain of healthcare delivery, you have to speak the patient’s language. However I also don’t want to be unrealistic and think that we can pass in one clean swoop into the patient domain. If you want an example of how radically problematic that could be, ten years ago there were all of those internet pharmacies. They were the most conve- nient way to get medications because you bypassed the physician. Admittedly from a patient standpoint, when you are educated and you know what you need, that would be by far the easiest thing to do. But very quickly everyone realized that that is not a good way of doing medicine. There are a lot of different components to the interaction between the doctor and the patient that need to be upheld in order to do good medicine. While giving patients the kind of care or the convenience of care that they are looking for is a valid goal, we have to balance it with the notion of patient safety. If you are a physician and you are treating your patients, you know who your patients are. You met a couple of times and you have a good understanding of what their reality is. Are they frail? Do they have multiple conditions? At that point, the means of communication that you need could be very asynchronous. Text messaging might be fine. When it comes down to patients that you don’t know, clearly you need more indications as to what is the state of that patient in order to do your job responsibly. Jay is right that there is no right modality, and the ability of the patient to get in front of the physician is very important, however I wouldn’t go as far as to say that we should just eliminate all of the important communication modalities between the physician and the patient for the purpose of convenience because I think many physicians would appropriately say you are making it very hard for us to truly keep up to the professional standard that we signed our name to.
Plaster: How many cases are able to be handled in-house and what percentage gets handled with a referral?
Parkinson: We solve about 70 percent of our cases that come at us. About 30 percent of cases are actually referred to be in person. at statistic has held true for the last 3-1/2 years.
Schoenberg: On our direct-to-consumer side, anywhere between 75 and 85 percent of patients state that their issue has been effectively resolved and that they did not need to do any kind of follow up. But to be very, very clear, the reason why that is the case is because physicians are instructed to immediately – within the first minute of the transaction – instruct patients who present with issues that they consider to be inappropriate to be handled through telehealth to seek care in more appropriate venue. When this happens, the transaction is nullified. So even though they give them guidance, they’re not assuming that the transaction is going to resolve the issue. And that is, by the way, a commitment that we’ve made to medical boards around the country; again very unlike most of the other people that offer telehealth that are in really deep trouble with medical boards, sometimes in court.
Parkinson: We hear those numbers from your direct to consumer line and it just confirms to us that so much of this stuff can be handled with good communication, no matter what that communication is.
Plaster: What are some of the ways you’ve seen the market shift since you first joined a decade ago?
Schoenberg: Really over the last year or year-and-a-half the world has completely done a 180. It is unbelievable. Standing in front of medical boards even five years ago was like a crucifixion. And today they’re inviting us to come in and help them, literally help them write their new regulations to embrace safe telehealth. Towers Watson – probably the largest benefits broker in the U.S. – just came our with their analysis. They said that between 2015 and 2017, we’re going to go from 20 percent of employers requiring telehealth services for their employees to 80 percent. So within the next two years, telehealth is going to become the required norm of essentially your health insurance. If that number actually pans out, this will become the fastest adopted healthcare benefit in American history.
Parkinson: My problem is this: If 80 percent of people are offering these services but only two to three percent of people are using them because maybe they’re uncomfortable using them, the modality doesn’t resonate with how they want to communicate; how do we sort of get from two to three percent usage to something like our usage, which is 85 percent of our companies employees sign up and 60 percent of their employees become users of the service more than once a year.
Schoenberg: I’ll be the first one to say that what you guys are doing is at the highest level of personalization – you feel warm and fuzzy when you work with your providers because that’s how you build the brand and the product. It is realistically also more expensive to do. And down the stream are very, very high-end concierge services and so on. I think we need to realize that the more you’re providing those kind of services to the masses, which is really where Teladoc is and where we are, you inevitably are not going to be able to tie an individual physician face to the service. It’s going to be very, very difficult to say to people in 48 states: is is the doctor or two doctors that you’re going to end up talking to. Our networks really have thousands of physicians who are serving all of these states 24/7.
I would also say that it really depends how you market it. And Jay, you do an amazing job in communicating kind of the warm embrace of your services. I think a lot of companies have done not such a good job in doing that. When we work with a large manufacturer, somewhere in the northern United States that has blue collar employees, many of them don’t even have email. So you’re going to get to that three, four, five percent level of use. Oracle is a client of ours. And when they deployed telehealth in collaboration with us utilization rates were 25 percent. So that’s five-fold or six-fold difference. The reality is that that is also changing very, very fast. People are very comfortable with using mobile devices. Facebook is introducing video chat. Skype has become something that people actually know about. The financial incentives are there. The adoption is there. The clinical validation, the clinical support, the physician support for that kind of medicine is there. Regulation is changing in this direction. I think we’re playing with numbers that realistically within two or three years are not going to matter. Telehealth is going to become one of the ways you interact with your physicians.
Plaster: Jay, would you say that Sherpaa’s higher end model of care would be difficult to scale up in a massive way?
Parkinson: I would agree with that. I think Roy and I are doing something markedly different in terms of strategy. In terms of our mission, it’s very much aligned. But strategy-wise, my concern right now is really targeting those forward thinking companies. We’re not going after these production facilities in Iowa that have no email addresses. We’re going after the forward thinking companies that have a collection of employees that just immediately get this. And by doing that, it’s a much smaller growth, smaller company. But it gives us an opportunity to sort of iterate quickly and treat our patients as partners in our process. That’s what I’d be happy doing for the rest of my life, always being at that cutting edge of what the future of healthcare should look like.
Schoenberg: The truth is that our models are actually complementary, right? When people walk into an urgent care center they can expect a certain level of care and a certain level of sophistication. They also know that if they walk into the Cleveland Clinic, it’s going to cost more. It’s going to be very, very serious, very highly educated and capable and experienced physicians. Telehealth is no longer monolithic. There are different services available on the same telehealth system. Some of them are high end and some of them are low end. Historically, telehealth was all about primary care. Now we have specialties.
We consider American Well more as the switchboard. We are the AT&T. We connect supply and demand. That does not mean that the supply is monolithic or that the demand is monolithic. There are different services and they all need to be connected through technology. And frankly, we could work with Jay tomorrow to ex- pose Jay to that population that we serve today. And some people will kind of dive in and say: Yeah, that’s the kind of service I’m looking for. That’s the kind of interaction I’m looking for.
Plaster: To downshift and get a bit more personal, what was your a-ha moment for knowing that you wanted to move away from practicing medicine into business, business development and healthcare technology.
Parkinson: When I graduated from Hopkins residency I became a practicing physician, and then I really stumbled into the business side of things. It’s not something I had on my radar at all, besides being a small business owner. But I think the most important quality that I have is curiosity. If I see something that I’m unfamiliar with but looks extremely intriguing, I’ll dive right in. And I think that’s probably the characteristic we need in physicians who want to become business people.
Plaster: What would be a concrete first step for someone who has those inclinations and that curiosity?
Parkinson: That’s a good question. I have my master’s in public health. If I’d go back and do everything over, I’d probably have gotten my MBA with a healthcare perspective. But you live and you learn. But in reality, it’s really about jumping in and doing something. Because like everything, you go to school for something. Whenever you get out of school, you’re doing something very different than what you studied. So to me, having the opportunity for a young physician or an older physician who wants to get into this world, jump right in and start working with companies that are already doing this and getting some experience and then see if it’s in your wheelhouse to strike out on your own. I think Roy and I have both seen a lot of ideas and a lot of executionary [failures] in our years of witnessing this sort of Health 2.0 space. So, curiosity isn’t the only characteristic. It’s really a good idea; understanding the sort of healthcare economic landscape and executing well. And I think Roy and I have both agreed that executing well is the hardest thing to do.
Plaster: Roy, what was your a-ha moment for transitioning from medical practice into business?
Schoenberg: Well, so my reality was at the moment I finished my medical training, I actually became a military physician and was running the hills, trying to charge my life - up from military generators. I really want to thank Jay for coming up with the most important word here: Curiosity. You want to do things differently. Curiosity is probably the most important ingredient or foundation for you to move into that do- main. The one thing, however, that I think is very, very important: Too many people say that they want to go into a start up. They want to start a company. And that scares me. Because I think historically people started the company when they wanted to do something. They had an idea. They saw an opportunity to do something more efficiently, in a way that delivered value. And today a lot of people are saying: I just don’t like the way my life looks, so I’m going to start a company. Jay mentioned the fact that you are specifically in healthcare dealing with a lot of different people, where the safe choice is to not make any changes. Introducing change in healthcare is tougher for some good reasons. So the only two cents that I would say is that: Curiosity is the key secret ingredient in moving into this world. You have to have it in your blood. But if you’re going to move from clinical practice into telemedicine or healthcare innovation or something like that, you really have to have a passion about an idea; not a passion about changing your lifestyle. And I think that’s an important thing and it’s not easy. If you end up running a healthcare company or a healthcare technology company, if you think that that means you’re going to sleep more and that you’re not going to be busy on weekends, you better think again. That’s not the case.