Waiting in an emergency room while not feeling well is an awful experience, especially when your condition could have been addressed in a ten-minute primary care appointment. But when it’s after hours, patients have no other choice- or do they?
Teladoc is the United States’ largest telehealth provider, with over seven million members currently enrolled (1). The company offers access to board-certified physicians via telephone or videoconference within minutes, and from anywhere. Doctors provide care for nonemergent medical issues only. Teladoc’s success is evident in its growth: the company served 8 million patients in 2014, and is looking at a second annual 100% revenue increase this year (2). Teladoc is a clear winner in terms of driving alignment between its operating and business models.
Teladoc positions itself as a fast, reliable alternative to urgent care centers and emergency rooms for minor medical problems. This proposition is appealing to employers seeking to reduce time lost due to worker illness. The business model of Teladoc is reliant on:
1) Greater access to care: A recent study found that the average wait time in Boston for a family practice physician is an incredible 66 days (3). Urgent care centers and emergency rooms have wait times on the order of hours, forcing patients with minor conditions to take time off work to be seen. Patients with subscriptions to Teladoc have a physician available to them 24/7/365, within minutes, regardless of their location (1).
2) Higher quality care: Given the nationwide primary care shortage, overbooked doctors often rush through appointments in order to stay on schedule. Teladoc doctors are not on a schedule, and have set aside uninterrupted time to answer calls, allowing for longer (one measure of quality) consultations.
3) Care coordination: Urgent care centers and emergency rooms, if not affiliated with a primary care provider, do not regularly receive or send records to a patient’s doctor; doctors therefore never have access to important information about the illness episode. Teladoc offers an online electronic health record to help ensure continuity of care (1).
4) Price transparency: After visiting urgent care center, patients receive bills for exorbitant amounts; the amount itself cannot be predicted at the time of care due to varying hospital pricing schedules. Teladoc offers a transparent pricing structure, with a monthly subscription cost along with a per-visit fee (4).
The operating model aligns with this business model to facilitate the provision of fast, accessible consultations to patients at a predetermined cost:
1) Services offered: Teladoc only provides services for minor medical problems, such as pink eye, sinus problems, and ear infections (1). These services address discrete conditions which can usually be dealt with without a physical exam, allowing for the remote visits, increasing access. Their diagnosis and treatment are not dependent on a longitudinal relationship with the patient. In addition, these medical conditions produce similar revenue levels for a doctor’s office; the lack of variability in the opportunity cost of delivering these services enables price transparency.
2) Physician flexibility: Doctors working for Teladoc are able to select their working hours. Calls are unscheduled, so doctors do not need to accelerate through visits in order to meet prespecified deadlines for the conclusion of the consultation. As such, average Teladoc consultations are 10 minutes long, in comparison to similar office visits running 3-6 minutes (1). That employed doctors are not on a prespecified schedule allows for longer patient visits, one metric pointing toward increased quality of care with Teladoc.
3) Use of electronic health record: In urgent care, providers often begin with little to no patient history. Teladoc’s physicians are supplied with a patient’s medical record to review just prior to the consultation. This both equips them with pertinent information and eliminates the need for the ill patient to recite prior medical problems during the visit, increasing the amount of time spent focusing on the chief complaint (another quality improvement). The health record is fully portable, and Teladoc patients are encouraged to share the record with their regular doctors (care coordination).
In summary, Teladoc seeks to provide accessible, high-quality, coordinated care at a transparent price. The company achieves this goal by only addressing minor medical problems that can be diagnosed and treated remotely; flexible doctors with time to address a patient’s needs; and an electronic health record that is used by Teladoc doctors and can be used to coordinate with a patient’s primary care physician.
(1) Teladoc.com (various pages within).
(2) “Thanks to Obamacare, virtual-reality doctors are booming.” Sept. 24, 2014. Retrieved from: http://fortune.com/2014/09/24/obamacare-telemedicine-doctors-booming/.
(3) Waiting… and Waiting… July 6, 2014. Retrieved from: http://www.nytimes.com/interactive/2014/07/06/sunday-review/waiting-and-waiting.html.
(4) “Why Teladoc Needs Medical Attention. Oct. 4, 2015. http://www.wsj.com/articles/why-teladoc-needs-medical-attention-1443984154