Care Model 101
In healthcare, you can build the world’s most gorgeous mousetrap and there’s a frighteningly high potential that nobody would use it. That’s because there are two basic routes to building a new care model:
- Create a great idea that’s now in search of a business model, or
- Find the established business model, and reverse engineer a superior service.
The former is infinitely harder, but potentially more disruptive and innovative. The latter is more a sustaining-type of innovation, yet, very likely, a clearer path toward real business success.
After determining what kind of business you are as a care model, the next step is to understand who’s going to pay you:
- Insurance companies
- Third parties
- A combination of the above
Depending on which entities pay you, you have to then create strategies for the following financial arrangements:
- Business to business
- Business to government
- Business to business to consumer
- Business to consumer to business
- Direct to consumer
Putting all your eggs in one basket in terms of revenue opportunities with a model that’s not yet proven can be risky. So, after you’ve defined the type of company you are and who’s going to pay you, you’ve got to define your pricing model. Is it fee-for-service? Are you paid on a value-based arrangement? How much do you charge for your service? Knowing that “you don’t know the price of something until you show it to a person,” how do you test a dizzying array of pricing strategies?
Once you’ve defined all of these, how are you going to drum up business? If you’re entirely B2B, do you hire a person with a robust established rolodex, or would that not make a difference? Do you hire a big sales team, or is sales going to be founder-led for quite some time? Do you need to build a whole online marketing tech stack with integrations into your platform to track a new user from ad to care? Or are you avoiding D2C altogether?
In the end, GTM strategy is literally everything and most often where new care models fall apart and fail to deliver real revenue. Deeply understanding the past and how digital health companies have either failed or succeeded is critical to forming your strategy. Unfortunately, there have been more failures than successes. But, in healthcare, it’s much better to be 3rd or 4th mover. Learning from the past is mission critical.