In my previous post, I wrote about some exciting work we’ve been doing in the telehealth space. But before we reveal what we’ve been building, there’s more to add about our research and development journey as we moved towards a proposition.
We’d been thinking about diabetes as the long term condition to focus on, but we wanted to be sure it was worth pursuing. So, the next phase of our research was spent speaking to experts out in the world, from entrepreneurial healthcare folk to business people with a strong interest in the condition, to family doctors and cardiovascular surgeons.
Talking to GPs in the UK, it was generally thought that diabetes would be a good long-term condition to pick. However, the condition is a broad landscape encompassing different types, so it was important to figure out exactly what evidence we were seeking to gather – what case were we trying to make to public health providers further down the line?
One GP heading up a really progressive practice in the Midlands, England, is already using telehealth with more elderly patients; its power lies in the aspect of care rather than medicine: the spillover effect on relatives is that it becomes a way of meaningfully delivering TLC. Telehealth’s great benefit in family medicine is to decrease dependency and cut down demand on services, which is compelling. But the value for patients lies in the psychological side of things. ‘The medical bit is not so hard,’ we were told. ‘It’s what you wrap around it that counts…’
Excellent, we thought. Then we spoke to a big health investor for some friendly advice. Not so good. Our telehealth plan then experienced what felt like a seismic wobble.
Business models for direct-to-consumer healthcare in the UK
Our investor asked us if we knew of any precedent where a direct-to-consumer healthcare proposition in the UK was making money. We were unsure, and so was he. We discussed whether there were conditions where there was a better acceptance around self-pay: perhaps pregnancy or even mental health?
We also talked about the cost of customer acquisition and how prohibitively expensive this might be. Think about online pharmacies where the cost of acquisition is particularly high, he cautioned, and multiply your original marketing estimate by 10 to 20 times… You need a good and cheap flow of patients with a capacity to pay (and bear in mind that going direct-to-consumer means GPs might not recommend a service for ethical reasons).
Then we touched on margins – not an uplifting chat – and the fact that diabetes is a pretty busy space, with plenty of people trying to solve lots of aspects of it.
So, at the end of that meeting, we seriously considered exploring a different route – perhaps oncology care and guided pain management along with lifestyle support (which is still very interesting for a later phase). Work with an established brand in the world of healthcare to develop the protocol. Think about purchasers who might not be the direct beneficiaries (always a good thing).
So, we did wobble. These were great points made by a real expert being very candid and helpful.
And then we calmed our oscillations.
The future of direct-to-consumer healthcare
In the UK in particular, consumer attitudes to self-care are changing more rapidly than we might think as people realise that the incumbent health care system is struggling. That if people want convenient, high-quality care and reassurance, it might come with a price tag. Moreover, we read an article which talked about one in three adults in the UK being in a prediabetic state.
We realised that if we were able to frame the proposition in a way that made it less comparable to ‘free at the point of care’ services, we’d be in a position to succeed – and that if we delivered a genuinely superior and differentiated experience, we’d be onto a winner both for patients and from a commercial perspective.
We spoke to a very successful businessman who had Type 1 diabetes and who is a passionate spokesperson around the condition. His view was that the services out there fall woefully short, and that there was a huge opportunity to create a telehealth service where lifestyle education could be brought to the fore, especially for those recently diagnosed.
Exploring the opportunity
We focused our subsequent rounds of fieldwork on both Type 1 and Type 2 Diabetes. The reasons for this were simple: the number of Type 2 Diabetes sufferers is huge, accounting for 90 per cent of the estimated 3.5 million diabetes cases in the UK. We suspected there would be some really interesting learning around lifestyle needs and coaching for this audience.
With Type 1 we felt it important to think about cases where greatest support might be required (and bearing in mind the advice from our investor around the purchaser versus the beneficiary). And, given that most people are diagnosed with Type 1 diabetes in early childhood, we set out to understand what sort of service might appeal to parents. What was the opportunity space? What needs should our proposition serve?
For the next chapter in this series we’ll post in more detail about what we found – who we spoke to, what we learned, and what we prototyped. Most importantly, what emerged is a very clear opportunity space and possibly a way around the challenge in acquiring new users without incurring unfeasibly high marketing costs…