A few years ago, I explored the idea of a healthcare marketplace model. At the time, I imagined it would be pretty difficult to build a true marketplace for several reasons: low frequency and high unpredictability of use (because thankfully, we’re not always sick), the monogamy issue (people prefer to stick to the same doctor once they find one), and most transactions are handled offline and won’t be captured by the platform.
These factors are just as valid today as they were back then. In fact, it seems that the common destiny for true healthcare marketplaces we’ve seen has been a directory of providers. However, Boris’s recent post on what exactly is a managed marketplace, as well as some recent conversations with entrepreneurs, have made me reflect on what might be possible.
Could a managed marketplace model work for healthcare? Maybe it starts off by serving basic health needs, then expands into more complex ones. In particular, I’ve been thinking about three key elements:
- Aggregate and curate supply
A managed marketplace can aggregate and curate a pool of providers. I could see the marketplace showing which physicians have last-minute openings – i.e. what types of doctors can patients see this afternoon? And this “available inventory” can be updated on a daily (or more frequent) basis. I can see this system working particularly well for non-complex cases from colds and flus to UTIs, and teeth cleaning to botox injections.
- Manage the pricing for services on the platform
In most cases, patients don’t necessarily want to haggle on pricing when it comes to healthcare. With that said, a “Priceline for healthcare” might not be a great UX for patients who likely don’t know how much a certain service or procedure should cost. In this sense, I think of the UX of Uber and Lyft, and its resulting success (i.e. both companies set the price for rides vs. the more Wild West feel of Sidecar where each driver set his or her own price). Perhaps a healthcare marketplace can manage and standardize the prices on its platform – and even advertise discounts when “inventory” is expiring (i.e. a provider needs to fill a few more slots for the day)?
- Connect the patient to the physician after the service is booked
When a marketplace standardizes the price of a service or procedure, patients won’t think to correlate it with quality if every physician is charging the same. As such, the marketplace can assign patients to available physicians, just as Uber/Lyft assigns riders to drivers. When there is no choice for specific supply, this can be advantageous for several reasons. First, it ensures that communication and transactions between patient and doctor remain on the network. This, in turn, might address the interoperability issue and poor data sharing – a big problem in healthcare. In addition, this model can reduce the chance of leakage since patients are more likely to associate the service with the marketplace brand, rather than an individual provider. And patients can always find a cheaper price going through the marketplace since supply is based on inventory that is expiring.
From here, once you have built a high quality network of physicians and won the mindshare and trust of patients, you can imagine the potential expansion into more complex cases and advance appointments. And perhaps, with this underlying network, you can even become a new type of insurance!
Now, a managed marketplace might not overcome all the challenges of scale, but it seems promising, and I think it has a strong potential to challenge the high cost of healthcare.
Is anyone else thinking about this business model? If so, we’d love to talk to you!