Key Takeaways
- One of the telemedicine business models is B2B2C, where vendors contact employers and payers directly, then market their telemedicine product to the payer’s consumer market.
- Platform business model works best for those organizations whose aim is not to sell a product, but rather to partner with a service provider who facilitates interactions on a platform powered by an organization.
- Payvider is another model in which both healthcare providers and payers like insurance companies work together to provide care at a minimum cost.
Healthcare technology businesses constantly stay on their toes to counter the growing telemedicine application development market. Changing trends, user preferences, and emerging technologies compel HealthTech companies to strategically alter their business models. One size doesn’t fit all, so one business model may not work for all telemedicine development companies.
Studies show that the telemedicine business model focuses on issues related to consumers, organizations, legal, and insurance. Additionally, telemedicine business models are designed to meet certain standards of HealthTech companies such as market competition, financial sustainability, revenue streams, cost structure, service platforms, and add value to users.
Let’s understand the structure of these trending business models in detail.
4 W’s of a Telemedicine Business Model
The telemedicine business model can be complex as it covers multiple aspects such as patient-doctor communication, pharmacist-doctor communication, remote care, and integration of technologies such as AI and machine learning. So, here are four basic questions to answer while finalizing a telemedicine business model.
- Which patients and what type of medical conditions are in dire need of telemedicine services?
- Who will be most affected if the telemedicine business fails or if the application stops working?
- Why are you starting a telemedicine business?
- On which platform you’re providing telemedicine services?
Apart from this, while building a telemedicine business mode, clearly define the following nine aspects:
- Cost structure
- Key partnerships
- Resources
- Value to customers
- Revenue streams
- Customer relations
- Delivery channels
- Value proposition
- Consumer segments
Trending Telemedicine Business Model
1. B2B2C (Business-to-Business-to-Consumer)
New or existing telemedicine application development companies need ways to get paid by payers. The B2B2C model exists for this reason alone. In this model, vendors first contact directly to employers and payers, then once both parties sign a business agreement, vendors start to market their telemedicine product to the payer’s consumer market.
To explain with an example, a CTO of a telemedicine development company approaches the directors of healthcare organizations, insurance companies in need of telemedicine apps to manage claims/reimbursement, or private clinics for collaboration, and then target their patients to sell telemedicine apps. A daily-life example could be mobile companies like Apple, which collaborate with online shopping sites like Amazon to sell their products to consumers.
Furthermore, in the B2B2C model, vendors are paid a small amount per user, regardless of whether someone uses the telemedicine product or not. At times, following this model can be frustrating because vendors may go for months together without a contract or may face telemedicine implementation challenges such as security.
Currently, the B2B2C approach is experiencing high market traction, so the bar to entry has surged too. Business meetings no longer move forward without a HIPAA compliance audit and a HITRUST certificate.
2. B2C2B (Business-to-Consumer-to-Business)
B2C2B market strategy begins by marketing a product directly to the employees of the company or directly to the consumer base. These consumers act like influencers and help to promote the product. Once a product gains enough popularity, the chances of companies lining up to collaborate increase. The goal of the healthcare technology businesses is to partner with a company that can pay them. One of the examples of the B2C2B business model is LinkedIn. Initially, LinkedIn marketed a free platform for professionals, and now it offers premium packages for those looking to create business or company pages.
B2C2B is a go-to-market strategy as it focuses on controlling user acquisition and growth. However, to achieve user growth, digital health companies need to develop telemedicine applications that solve major problems faced by users. The end-users decide whether the telemedicine app is worth it or not, and only then top-notch organizations will be interested in collaboration.
3. Platform Business Model
The platform business model works best for those organizations whose aim is not to sell a product, but rather to partner with a service provider who facilitates interactions on a platform powered by an organization. Sources of monetization for platform businesses are advertising, access fees, usage fees, or any other source.
The telemedicine business model can be derived from the platform model. For example, the need for on-demand healthcare services, virtual care, and remote care has accelerated since the onset of the pandemic. Telemedicine application creates a platform for doctors to provide their services to patients remotely. Users can leverage the services of telemedicine apps from their homes, and physicians can earn extra income by working at any time.
Furthermore, healthcare software development companies can make use of trending technologies such as big data and AI, and integrate them with telemedicine platforms for better patient care and diagnosis. AI algorithms analyze patient data, and the analysis results help doctors to use preventive and predictive strategies to improve patient outcomes.
4. Outsourced Virtual Care Network Models
The task of forming a virtual provider network is taxing for healthcare development companies. Setting up a robust virtual physician network demands a lot of effort, money, and resources. So, in such cases, the best option is to outsource physician networks.
Telemedicine apps can be altered with a feature that leases physician networks (which is a storehouse of virtual nurses and doctors) to companies. Rather than hiring clinicians directly who will offer their services on a telemedicine platform, companies can leverage available physician networks.
5. Telemedicine Payvider Model
Payvider is exactly what it sounds like, a combination of Payer + Provider. Payviders aim to deliver cost-effective care, and as a provider, they’ve complete control over the quality of healthcare offered. Additionally, a payvider partnership reduces financial risk, increases profitability, and improves health outcomes too. Moreover, the payers think about the risk in premiums, whereas providers think about risks in terms of the cost of care offered to patients.
For an effective payvider model, it is necessary to have robust care coordination. The payvider has to remain on par with the care offered to patients, and two main aspects to keep in mind are complete accountability and transparency. This is where telemedicine apps come into the picture. Telemedicine application bolsters care coordination and allow providers to follow up on patient wellness.
Furthermore, using payvider as a telemedicine business model works because both provider and payer work under the same platform. For example, a collaboration of healthcare providers + insurance companies form a payvider model, both can work under the telemedicine platform.
If you’re looking to collaborate with a telemedicine application development company to expand healthcare services and diversify revenue streams, connect with Arkenea. With over 12 years of experience in the healthcare software development field, Arkenea has delivered top-notch telemedicine applications and varied healthcare software.