10 - 2020 - Damo Consulting

Big tech’s big play on telehealth and digital ‘front doors’ The pandemic has accelerated the adoption of virtual care models using telehealth technologies provided by specialized firms. Now big tech seems to be getting into the act. Originally published on CIO Online In the wake of the pandemic, healthcare has seen dramatic shifts in how patients access and receive care. Technology has become a more critical enabler than before in ensuring patients can easily access care – a fundamental challenge for the primary care market, which is arguably the most contested competitive space in healthcare today. In the past couple of years, the notion of the digital “front door,” which refers to digital access points for primary care services, has been slowly gaining traction. In an earlier column on digital front doors, I referred to the competition between traditional healthcare providers and non-traditional firms such as CVS and Walgreens. The pandemic has accelerated the adoption of virtual care models using telehealth and online self-service tools by specialized companies such as Teladoc and American Well. Both of them have seen their telehealth visit volumes go through the roof. Now big tech seems to be getting into the act. In this article, I discuss the major themes related to digital front doors and how the big tech firms are playing into these themes. Health and wellness Many early digital startups aimed directly at healthcare consumers, hoping to win them over with slick health apps that could help them manage their health and wellness, avoid costly hospital admissions, and possibly even forego health insurance coverage altogether. Most of those startups have either folded or pivoted to B2B models. A handful of digital health startups have pursued health insurance companies and self-insured employers. Notable successes with the latter approach have been companies like Teladoc and Livongo (read my earlier column on how the merger of these two companies is accelerating the shift to virtual care). Many of these firms are turning their focus now to healthcare providers. While the B2C approach to healthcare seems to have stalled for startups, it’s a different story with big tech firms. In the past few years, devoted Apple customers have been diligently recording their exercise activities to the Health app on their Apple devices. Apple has steadily added to its health offerings over time, notably through its Watch (an example was the ECG app). This past month, the circle came together more tightly as Apple launched a fitness service meant to tap right into the trend of home-based workouts, especially in the COVID-induced sheltering guidelines. Google’s acquisition of Fitibit, announced last year (though still facing challenges with anti-trust scrutiny), was a highly visible play by the tech giant to get into the personal health and wellness market. Google has taken a multi-pronged approach to the healthcare market, with Alphabet companies like Verily aiming at "moonshots" and Google Cloud aiming for the traditional enterprise IT market though high-profile cloud hosting deals with brand name health systems such as Mayo Clinic that are tied to data and analytics on patient medical information. The wearables space has long held appeal, for the treasure trove of information that it can provide in addition to markers for health issues. In September, Amazon launched its Halo "health and wellness band" that targets the fitness space, with a unique feature using its Alexa-enabled voice analyzer for detecting mental health issues. Telehealth and virtual care Despite the dominance of EHR firms in the health IT landscape, the steady shift to virtual care has led to more specialized digital health companies targeting the various aspects of a comprehensive digital experience for healthcare consumers. For the most part, these firms have been stand-alone firms with platforms built specifically for the healthcare markets. The platforms integrate with core EHR systems through industry-standard APIs, allowing patient data to move back and forth, enabling the tracking and billing for virtual care services, and providing useful add-on self-service tools such as chatbots and symptom-checkers. Big tech firms have mostly stayed out of the core care delivery business, preferring to focus on providing technology infrastructure and enterprise-class applications to improve caregiver productivity and efficiency. That may have changed recently with Microsoft’s partnership with leading EHR vendor Epic, enabling caregivers to launch telehealth visits through Microsoft Teams from within the Epic EHR platform. The development is significant for two reasons: in addition to providing an advanced video platform, Microsoft's O365 platform now becomes a significant enabler for caregivers by becoming a conduit for the secure movement of clinical data such as images. Microsoft has been getting deeper into telehealth recently; an example is their recent partnership with Nuance Communications to integrate voice-enablement technologies that reduce clinical workload by synthesizing physician-patient conversations during virtual visits through Microsoft Teams. Following the Halo wearable launch, Amazon announced recently that it is offering virtual care to all its employees in Washington State, laying the foundation for further expansion into primary care services. Amazon's earlier effort to harness a captive employee base through Haven, a joint venture with JP Morgan and Berkshire Hathaway, has made limited progress, which may have led Amazon to pursue a different path and go on its own. (Amazon’s earlier foray into healthcare through the acquisition of Pillpack has run into challenges) Over the past few years, Apple has steadily built an ecosystem around its iOS devices, signing up over a hundred health systems that now allow their patients to pull their EHR data directly into the Apple health app. With its renewed focus on health and fitness, its vast cash reserves, and the dominant ecosystem of iOS devices, Apple may be the best positioned to engage directly with healthcare consumers with an expanded range of healthcare services in future. Much has been written about the sanctity of the in-person doctor-patient encounter. Ironically the pandemic has demonstrated that telehealth can meet most routine care needs. This may be a profound moment for healthcare as pure-play technology firms seize the opportunity and use their platforms as a way to enter the healthcare services business, notwithstanding their firm repudiation of any such intent. Healthcare executives I speak with acknowledge the changing dynamics in the marketplace and are upgrading their telehealth and digital experience capabilities to meet consumers with a range of online services, very often in partnership with the same big tech firms. The question may now be: when does the partner become a competitor and what does that mean for healthcare consumers in the future?

Big tech’s big play on telehealth and digital ‘front doors’

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