(We originally posted this in 2020. You can read more of our original ideas in our archive.)
Problem: With people more reluctant to leave their homes due to COVID19, doctors have less access to check up on patients.
Solution: Video-based tele-health services. While the idea itself is not particularly unique, the time is ripe to do it now. As I discovered during an online Trivia session with JP Morgan Chase, in 2019 only 11% of US households used telehealth services; today that number sits at 46%. While many of these customers may only have used telehealth once, a platform that makes the experience seamless and delightful will quickly become a leader in this market where conditions have led to more experimentation and willingness to try new products.
Below is an analysis from Madison Faller and Elyse Ausenbaugh, Global Market Strategists for J.P. Morgan
Megatrends are likely here to stay, and they’re accelerating. Megatrends like sustainability, digital transformation, and healthcare innovation may continue to offer investors above-market levels of growth and potential returns. Consider that:
In 2019—the halcyon days before the COVID pandemic—only 11% of all U.S. consumers had used virtual medical services, a.k.a. telehealth. By May of this year, that portion grew to 46%, as patients sought virtual primary care visits with doctors during lockdown periods. Some recent estimates suggest that about a quarter of healthcare office visits and outpatient care could be delivered virtually, signaling huge potential for more efficient and cost-effective medical services in the future.
However, not all telehealth companies are this bullish. As described by CNBC on September 17, 2020 right after Amwell had their IPO,
Amwell made its public market debut Thursday after months of rapid growth because of the coronavirus pandemic. But co-CEO Ido Schoenberg told CNBC that the “enormous” digital transformation of health care remains a process that will take years.
“This giant surge in visits may not be continuing into the same pace, and we fairly expect it to go down for a little bit,” Schoenberg said on “The Exchange.” “Our goal is not to count visits. ... Our main performance indicator is the number of active providers on our platform.”
Schoenberg, who co-founded the company with his brother, Roy, in 2006, said bringing more doctors onto Amwell’s platform is critical because it’s important to provide patients with flexibility in how they receive health care.
“We simply believe that, in the future, your doctor will connect with you sometimes in person and sometimes online,” he said. “It’s easy to explain to me, but of course it’s a different story to actually implement it. There are many barriers and complexities, which is what we do. That will take a long time.”
Shares of Amwell were up more than 25% Thursday to almost $23 apiece in its first day of trading. Shares of Amwell on Thursday closed up 28% at $23.07 apiece in their first day of trading. The company, which also scored a $100 million investment from Google’s cloud division, priced its IPO at $18 per share.
One of the largest barriers to adoption is these platforms is not user growth, but rather provider growth. They will need more doctors on the platform and will need to integrate these existing tools into the complex framework of the healthcare system.
Globally, telehealth market size was valued at $49.8 Billion in 2018 and is projected to reach $266.8 Billion by 2026, exhibiting a CAGR of 23.4% between 2018 and 2026. A business which can capture even a segment of this would be well on its way to become a unicorn company.
Monetization: Fees for using these services.
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)