Posted on | April 4, 2011 | No Comments
1. With a decent amount of marketing hoopla, HealthPartners launched Virtuwell, a web-enabled diagnosis and treatment tool for simple healthcare needs.
2. The effort could be seen as an example of hypercompetition, where a company out-innovates itself in order to prevent a competitor from doing it for them.
3. Regardless of the competitive strategy, HealthPartners has a long way to go to clarify its menu of healthcare options; the value propositions are not yet clear to all stakeholders.
Sunny Minnesota spring day. Two boys playing outside. The younger one comes in screaming in pain. The older one screaming, “I didn’t do anything.”
Ah, just another one of the joys of raising boys.
As it turns out, it really wasn’t my older one’s fault (surprise). Over the winter, our new retaining wall went through one too many freeze/thaw cycles. A chunk of six blocks gave way, hitting my younger son’s baby toe on the way down. (Yeah. Ouch.)
While my wife found the ice pack, I hit the HealthPartners website. Boy, had things changed in the few months since I’d last had reason to be there. In addition to hospitals, specialty clinics, and urgent care, I had a new choice: Virtuwell, an online diagnosis tool. What the heck? I didn’t know much about it, but the published wait times at the urgent care clinics are notoriously inaccurate.
Long story short, Virtuwell seems like the perfect option for things like sore throats, flu, lice, and the contagious, but generally harmless pink eye. No “paving bricks on foot” option. Darn.
As we spent the better part of the afternoon waiting at St. Paul’s urgent care clinic, I had more than enough time to really give this some thought.
What does Virtuwell mean for HealthPartners? Isn’t an online option sapping business away from their clinics and ER? How does this provide an alternative to Minute Clinic and Target Clinic? Is this an example of so-called hypercompetition? That’s a strategy scenario – usually reserved for technology companies – in which the dominant player in a market will innovate it’s own replacement products and services before a competitor does it for them.
In one sense, I think that’s exactly what’s happening. If you think about the traditional healthcare service model, it is being beset on all sides with formidable opponents. You’ve got insurers putting downward pressure on fees. You’ve got the Targets and CVSs of the world getting into the easy-care business (and consequently, some of HealthPartners most profitable business). You’ve got a new and uncertain healthcare regulatory environment. You’ve got public anger over what they see as system abuses. You’ve got employer anger over yet another year of double digit premium increases.
It all comes down to this: healthcare providers must find the best delivery model, at the lowest cost, that provides the best measurable outcomes. The one that can innovate the fastest wins.
In that sense, I can see where HealthPartners is coming from. If we think about it a different way, we can understand the healthcare delivery model based on the engagement need of the patient. A world in which everyone goes to hospital emergency room for the most minor ailment is a tremendously expensive way to deliver care, just ask HCMC. That said, hypercompetition could be in play here, but it’s more likely that we are simply seeing technology finally enable a complete delivery model.
The chart below summarizes the different options by engagement level.
By creating Virtuwell, HealthPartners is using technology to fill in the far end of the engagement chain: common conditions, easy diagnosis, typical prescriptions. All of which can be done via chat. (Media richness theory might say that a telephone conversation could add more context to the discussion, but that’s a nitpick. Video chat would fix that.)
We can see on the other end of the spectrum are the high-engagement options: specialty care and hospice. Next to them are the hospital systems (not as engaging; ideally, they don’t want you there any longer than you need to be). Then the clinics. Then the urgent care centers. Then a missing option: in-retail clinics. Then Virtuwell.
From a cost and delivery perspective, it is a pretty impressive model. But from a branding perspective, it is clear healthcare consumers really don’t understand yet how to choose (I am also not sure it helps that Virtuwell features a clearly different visual message). In marketing-speak, they don’t have a clear value proposition at each level.
For consumers with insurance, what incentive do they have to choose the cheapest option? They’ll choose the most convenient. For uninsured consumers, they’ll wait until they have an emergency, or they’ll choose the retail clinics with the easy-to-understand price menus. Or they won’t go at all. The common denominator is confusion. As consumers, we’ve complained about healthcare costs and services, but we are loath to engage with our options more fully.
Virtuwell is a good start from a delivery model perspective, and makes sense from a hypercompetition perspective, but in the short term adds another layer of confusion to a crowded set of options.
In order to get the return on investment it wants (needs), HealthPartners needs to do a better job helping all of us understand how to choose from its menu of care options. When do I choose a specialist? When do I go to the ER? When do I hop on nurse chat? It will be hard work, but unless that’s clear, I’m not sure it will be successful.
As a parting note, the younger boy turned out fine. Nothing broken. Whew.