American well an ambitious startup designed to provide virtual health/medical transactions between patients and doctors, has been

invited to present its product overview in a thoroughgoing waya deep dive, in Health 2.0 patois. In this liveblog, I need to control the depth, of course. Ill try to boil this into five (5) key points about American Well: 1. Unlike other industries, health so far hasnt succeeded in doing transactions (Amazon, Expedia, eBay, etc.) on line. Imagine Expedia if, instead of buying a ticket, all you got was a picture of your plane. Whats missing? In health, its the real care transaction. 2. American Wellness is essentially a brokerage system for online wellness servicesreal services, not just information. Connecting consumers with providers and, as important, the moneywhich is to say insurance reimbursement systems. Patients, docs, money, all tied together. 3. Consumers can access specialists, from anywhere, for a fee. Their calls, e-mails, etc. are aggregated and distributed to the appropriate specialists in real time. [The liveblogger anticipates the big question: How does this provide continuity of care? And the answer comes immediately--the AW marketplace delivers only specialists, not a primary care doctor. The tradeoff of getting someone with whom there is no existing relationship to have immediate access to care. ] 4. Whats the transaction like? The demo shows a consumers entry into the system. [The interface is very clean--you can tell they usability tested this really well.] First, consumer looks for a doctor. [PowerPoint slide joke: Doctor profile that comes up is an OB whose name is given as Otto Matic.] Doctors presented with bios, videos, etc. Ratings? Yes, but not clinical ratings. Just consumer satisfaction ratings. [Needless to say, this is one of many services attempting to aggregate patient evaluations of doctors.] Part of summary isprice transparency! The cost of the anticipated consult is listed. Patients can fill in their health background to let docs understand the situation more fully. Then doctors, in real time, review request and decide if its appropriate that they take it on. Then: When patient and doctor both agree to a clinical encounter online, an interactive console pops up the interaction can be live video via webcam, live audio or typing chat, on-screen notes and documents, etc. Lab information, with patient permission, can be added. While its a virtual interaction, its a rich-media virtual encounter. 5. And the consumers regular doctor? Patient can send doctor report of entire transaction. [The liveblogger's question: What will the patients' internists have to say about this?]

Other point: Insurer AIG has developed a new malpractice insurance productper transaction, not annual. Its embedded in the service. Will this save money in healthcare? AW argues that by providing some care in the home, and keeping some transactions at lower cost, insurers, payers and patients can save money. This can keep people out of the ER, maybe. The AW planessentially disconnecting care from a physical locationraises all kinds of questions not dealt with, even in this deep dive: Privacy? Coordination of care? How to deliver service of real value without risking misdiagnosis, etc. How will insurers ultimately reimburse this care? How different/better/worse will this be compared to in-store retail clinics? What conditions or situations is this kind of virtual care best suited to? And finally, when will this launch? In 2008, CEO Roy Schoenberg, MD assures us.

Executive Summary American Well is considering several options for expansion including the introduction of its new product,Team Edition; "Team Edition" is a break-away from the traditional methods of consulting with physician specialists and will revolutionize the way the healthcare industry, and all its players, communicate with one another. The target market for this revolutionary product will be health insurance companies where cost-savings will be substantial due to early detection of medical problems thereby reducing insurance coverage for patients. The primary marketing objective of "Team Edition" is to expand American Well's business and presence, and achieve differentiation from competitors which will hopefully translate to a larger market share and brand awareness for American Well. Situational Analysis Nature and Extent of Demand American Well is a start-up company founded in 2006 providing medical services via the internet and telephony. Traditionally, patients had two primary choices when seeking medical care to show up at an emergency room or a similar acute-care facility, or to schedule an appointment with their physician. With the American Well business model, excess demand was matched with excess capacity (patients matched to doctors). In addition to making use of excess

supply and demand, this business model also creates efficiencies and value to many businesses by dramatically speeding up the diagnostic process for a patient. With just an internet connection and/or telephone, patients are able to visit a doctor of their choice online and receive a diagnosis. From a business standpoint, this business model benefits doctors, health insurance companies, and companies where the patients are employed at. Patients receive immediacy, convenience, quality, affordability, and selection. Doctors receive flexibility in work arrangements, increased earnings, and work/life balance. The value proposition to insurance companies will be significant savings and increased revenues by opening their doors to non-members. Insurance Companies are able to use this model to address one of the most intractable problems they face: align their financial incentives with those of physicians. Since physicians are usually paid on a fee-forservice basis, they are often incentivized to increase the number of services they deliver; meanwhile, more services results in higher costs for insurance companies. With American Well's business model, health insurer's costs can decrease if physicians encourage their patients to use Online Care for non-emergency and follow-up appointments. Furthermore, this business model addresses regional and rural physician shortage issues by connecting patients to doctors without having to be in the same physical location. In 2009, U.S. healthcare expenditures were estimated to top $2.5 trillion and were projected to reach $4.3 trillion, or $13,100 per resident by 2018. This outlay represented 17.6% of GDP a greater percentage than any other country and reflects the fragmentation and complexity of an inefficient health care system. In the U.S., there are approximately 990,000 physicians working, of which 40% are PCPs. Non-physician providers include 2.5 million registered nurses, 74,000 physician assistants, 147,000 nurse practitioners, and others. Competition There are a few other companies that are also competing in the Online Care industry. Most notably are the following companies: RelayHealth Founded in 1999, RelayHealth offers online solutions for facilitating patientphysician communication. Patients are able to schedule appointments, update their health records, request lab results, prescription renewals, and referrals. For non-urgent issues, patients can complete interactive online questionnaires describing their symptoms; this information was then transmitted to the patient's physician, who determined whether an in-person office visit was necessary. Medfusion Founded in 1996, Medfusion also facilitated online physician-patient communication through its Virtual Office Suite, a web-based platform through which physicians could connect with patients by phone or online. In 2009, Medfusion served more than 28,000 physicians, including over 4,000 practices in various specialties across the U.S., and had over 1 million patient accounts. TelaDoc Founded in 2002, TelaDoc offered patients year-round, 24/7 phone access to a network of physicians in a call center model. The company suggested patients use the service when their PCP was unavailable, when traveling, for short-term prescription refills, or to obtain physician advice to supplement that provided by their PCP. Patients were also able to request a

medical consultation by accessing their online account or call TelaDoc directly. After reviewing the request and the patient's HER, a licensed physician in the patient's home state would phone the patient, typically within one hour. Cisco TelePresence Cisco's TelePresence offers live video conferencing and collaboration and has been adapted to the health services setting to create HealthPresence, which combined TelePresence with medical devices to enable real-time interaction between healthcare providers and patients. Using HealthPresence, patients could interact with physicians over video conference while also sending data collected from medical devices to the physician, enabling real-time evaluation. The "Offline" Care allows patients to meet their caretaker in a face-to-face setting. While this business model doesn't compete directly with American Well's business model, they offer a convenient and affordable method for patients to get their health needs resolved quickly and efficiently. The major players in this industry include: MinuteClinic, RediClinic, Take Care Clinic, and individual Nurse Practioners working in hospitals, private practices, retail clinics, nursing homes, and schools. Environmental Climate Currently, the U.S. healthcare environment is volatile. President Obama has committed to reforming the healthcare system. However, 11 months after taking office, it was still unclear what such a reform would look like. As a result, the healthcare services industry has adopted a "wait-and-see" attitude. Many health insurance companies have implemented spending freezes, and it remains unclear when such restrictions would be lifted. With healthcare expenditures comprising 17.6% of GDP, the system was the subject of intense reform debate in public policy circles in 2009. Currently, about 17% of Americans under age 65 are without health insurance. This group of uninsured paid for care out-of-pocket. With American Well's business model, this also presented an opportunity to help and grow it's bottom line at the same time by offering affordable medical solutions for the uninsured. In addition, over the next two decades, health insurers are also bracing for a dramatic demographic shift in which Americans over age 65 would comprise 20% of the population. The success of healthcare IT innovations depends on their compatibility with HIPAA (Health Insurance Portability and Acountability Act), enacted in 1996 to address privacy and security risks stemming from increasing use of electronic channels to transmit patient information. The act applies to providers, insurance companies, group health plans, government payors, and healthcare clearinghouses. HIPAA's privacy rule dictates how patient information can be used and disclosed. Cost Structure of Industry The amount insurance companies reimburse physicians per 10-minute online consultation, expected to be approximately $25, will be less than the reimbursement of an office visit and

significantly less than that of an emergency room visit. Being able to resolve health problems online, at the cheapest point of care, will create those savings. For a typical patient hospital visit, on average, insurance companies paid PCPs about $100 for new patients and $75 for existing patients. Most specialists were typically paid multiples of what PCPs were paid (anywhere from a few hundred to a few thousand dollars). The typical co-pay was about $15 - $20 per visit with a PCP and $25 - $30 per visit with a specialist. According to a 2009 analysis from The Actuarial Digest, insurers could save $3.36 per patient per month by using Online Care. As of 2008, 53% of health spending was funded by private payors, including health insurance companies, individuals and philanthropic sources. Health insurance companies offered several types of health plans at different price and coverage levels. The format of employer-sponsored insurance varied, but typically involved employees paying a portion of premiums and employers covering the rest. In 2009, the average annual premium for employer-sponsored insurance was $4,800 for individuals (17% paid by employee) and $13,400 for family coverage (27% paid by employee). Skills of the Firm In terms of management skills, the two CEOs of American Well have their medical degree and have practiced as physicians. They are therefore familiar with the daily tasks, equipment, resources, and needs that physician would require for this type of business to succeed. Furthermore, Ido Shoenberg has co-founded a successful healthcare enterprise software company iMDsoft. Ido Shoenberg was also the founder and CEO of CareKey, a provider of electronic health management systems that Roy, his brother, founded. CareKey was eventually sold to The TriZetto Group, one of CareKey's early corporate partners. By the end of 2009, more than 45 million people were using the CareKey system. Due to their extensive experience in the medical field, software field, entrepreneurial start-ups, both founders are extremely well-connected. They have access to knowledge and experience that can sometimes only be found in people. From a financial standpoint, American Well is well-financed, the brothers were able to raise capital twice in a short time span the first round only took 10 days and the second round only a week. This was due to the brothers' strong track records, strong long-term relationships with high net-worth entrepreneurs, and preparing people with the business idea. Problems and Opportunities American Well is faced with a unique situation in where there options are both problems and opportunities. There problem is that there technology platform is so versatile and cost-saving that it could be applied to other areas of healthcare. For instance, delivery network markets hospitals, chains of health clinics, and other systems of providers could achieve cost efficiencies, provide better customer service, and boost revenues. Hospitals could install Online Care Kiosks in emergency rooms, allowing patients in the waiting area to consult with a physician online while waiting to be seen. By the time hospital personnel

could see the patient, he would already have preliminary information about his ailment. This process would expedite patient visits and the hospital's overall efficiency. Retail Clinics could augment their services by installing these kiosks. American Well's research had revealed a patient preference to receive care even Online Care at dedicated healthcare sites such as retail clinics. Since Nurse Practitioners were usually the highest level clinical staff at retail clinics, offering access to physicians through an online service could boost patients' perceptions of the legitimacy of retail clinics. Pharmacy chains represented another potential base. Pharmacists, like physicians, could make themselves available to patients online to answer questions that patients may have forgotten to ask or may have been too embarrassed to ask. Expanding internationally was a definite possibility for American Well. Potential customers in Australia, Germany, and the United Kingdom had already expressed interest. The problem is that pursuing this opportunity would require extensive changes to American Well's organizational Structure. The company would also have to tailor its service to each individual market in accordance with local regulations and governing privacy. Any of these new ventures would require a significant marketing investment and divert resources from the US health insurance market, where American Well is just starting to make inroads. Moreover, serving both the insurance and delivery network markets could create conflicts of interest with respect to non-insured patients. Lastly, a new product code named "Team Edition" would be an extension for American Well's business model. "Team Edition" would drastically cut down on the amount of time it would take a patient to see a specialist after being referred by his PCP. Traditionally, a patient would meet with his PCP and if a PCP decided that a specialist was required, the patient would have to make a separate appointment up to several weeks out. With "Team Edition", consultations with specialists occurred right away while the patient was still with his PCP. A potential problem with rolling out "Team Edition" was that customers of American Well might be confused with multiple product roll-outs, especially since the core product had not been completely adapted yet. Decision Based on factors mentioned in the Situational Analysis, my recommendation is for American Well to launch "Team Edition" and forgo the other opportunities. "Team Edition" is a natural extension to the services already offered by American Well and would further add value while reducing cost to health insurance companies and patients. The addition of "Team Edition" would not incur substantial cost to American Well as the company may use already existing technology to support this product launch; this service would basically be used in the same manner as when a patient consults with a physician online, except in this case, it is the physician and patient consulting with the specialist. In addition, "Team Addition" would be a differentiator

for American Well when compared to its competition. "Team Edition" can be easily rolled into the service package of American Well's already established core product. While developing kiosks for delivery networks is also a possibility, American Well's core product has just begun establishing a presence in the market for its core product. Committing to developing kiosks for delivery networks at this time is still too early. To do this, American Well would need to commit substantial capital to marketing, sales, and most importantly, the development of the kiosks including the technology that would go into it. In short this would be a new business segment that would require new resources. International expansion is still too premature for American Well at this point. American Well has not completely taken root on its home-court the U.S. market just yet, and to expand internationally without having a sound base to work from would be taking on exceptional risk for the company. International expansion would require American Well to focus on various markets at once vs. focusing and developing on the U.S. market. As stated above, international expansion would require American Well to completely re-organize its company structure. For a company just establishing a base in the U.S. market, a structural re-organization could lead to chaos and customer dissatisfaction. Finally, international expansion would require new and enormous financing. Without a sound base to work from and complete product adoption taking on more financial risk would not be wise. Marketing Plan For "Team Edition" Market Summary American Well's market consists of consumers and businesses who prefer to utilize the internet and telephony for communication, information storage and exchange, and organization. Specific segments being targeted include physicians, insurance companies, and patients. Exhibit A (see appendix 1) shows how American Well addresses the needs of targeted consumers and business segments. Patients and physicians have been becoming more comfortable communicating electronically through e-mail and secure messaging since the mid-2000's. A 2006 survey found that 74% of respondents wanted to communicate with their doctors using e-mail, but only 4% were actually doing so, mainly because such a service was not available. Concurrently, physicians' use of online communication was on the rise; one survey of internet-using physicians in the U.S. noted that from 2001 to 2008, physicians who communicated with patients online increased from 23% to 36%. Online communication creates efficiencies by reducing the number of patient visits to physicians and decreasing the volume of phone calls to physicians' offices. Strengths, Weaknesses, Opportunities, and Threat American Well has several powerful strengths and opportunities to build on and expand but the major weakness is that the core product has not been completely adopted leading to lack of brand awareness. The major opportunity is the increasing use of online communication between

physicians and patients, meaning more acceptance and adoption for American Well's business model. American Well also faces threats from firms offering similar services. Strengths 1.) Proprietary Technology American Well possesses proprietary intellectual property which could serve to block competition in the future. This sophisticated technology platform enables physicians and patients to transition seamlessly between communication modes phone, video conference, and live online chat and also allows asynchronous communication (e.g. leaving a voice or e-mail message). A patient is able to switch from chatting online with a physician then, without any lag time, reroute the conversation to his phone by simply pressing a button. The technology also allows for patients to view the virtual queue for a physician and add himself to that queue. 2.) B2B Company B2B business model allows American Well to sell to insurance companies similar to a franchise model. By choosing this type of business model, insurance companies view American Well's service as part of a solution to their problems. Moreover, these customers could serve American Well as "aggregators," providing easier access to large pools of patients and doctors. Insurance companies have internal resources they can commit to the marketing efforts needed to encourage physicians and patients to use Online Care. Finally, the financial strength of insurance companies represent a more lucrative customer channel than individual patients. 3.) Pricing Compared to traditional methods of visiting a physician, where cost is high for both patients and health insurance companies, Online Care consultations costs only a fraction of traditional methods. This value proposition is a win-win-win-win scenario for all four parties patients, physicians, insurance companies, and American Well involved. Patients, members and non-members, pay anywhere from $45 - $75 per consultation. Weaknesses 1.) Lack of Brand Awareness American Well has no established brand or image, whereas RelayHealth, Medfusion, TelaDoc, and Cisco TelePresence have been established for a few years and are more recognizable brands in the marketplace. This issue, however, can be addressed with the founder's strong track record, and network connections within the industry (e.g. Ido and Roy were able to convince an executive of BCBS Hawaii to seriously consider American Well's service due to past positive rapport developed when Ido and Roy were with CareKey). 2.) Limited Medical Services Conducting medical evaluations online has a natural barrier to the amount of services that can be offered and performed online by a physician. For more serious issues (e.g. surgery, in-depth physical tests, etc), a patient will still have to visit a physician in person. Opportunities

1.) Increasing demand for online communication between physician and patients Studies show that more and more patients and physicians prefer communication through means of internet. 2.) Decreasing wait times for scheduling with specialist With the introduction of "Team Edition," American Well can drastically cut down wait times and turn-around times for consultations with specialists and physicians. 3.) Relieve medical licensing barriers State governments often limited the access of their residents to physicians who were licensed to practice in their own state. However, PCPs were typically free to consult regarding their patients with specialists from anywhere in the U.S. Threats 1.) Competition Established competitors (mentioned on page 3) may also adopt a similar product to that of "Team Edition." If that were the case, "Team Edition" would no longer be a differentiator for American Well. Product Offerings "Team Edition" offers the following features: - Drastically decreased wait times for patients between physician and specialists. - Improved quality of care by resolving detecting and resolving medical problems early before further complications arise. This would be an enormous cost saving to both patients and insurance companies. - Relieve some medical licensing barriers which most states had traditionally put in place. - Allows doctors to consult with other doctors in the context of a patient. - Brings specialists into PCP practices with the click of a button. - Eliminates barriers to accessing specialty care such as geography and supply Target Markets American Well's strategy already targets insurance companies as its target market for its core product. "Team Edition" would also be marketed to insurance companies. However, it can be marketed either as a separate product or as part of a package with American Well's core product. This type of offering makes American Well and its services much more versatile as this offers more flexibility for its customers. Positioning

Using product differentiation, "Team Edition" should be positioned as a revolutionary, versatile, convenient, value-added model for the health insurance industry. The marketing should focus on the potential cost-savings and time-savings of "Team Edition." Controls Measures Tight control measures will be planned and closely monitored to measure quality and customer satisfaction. Surveys and questionnaires will be mailed to customers to gather statistical data to measure effectiveness of "Team Edition." This information will allow American Well to identify and react very quickly to any problems that may occur. Other early warning signals that will be monitored for signs of deviation from the plan include monthly sales and expenses. In terms of company organization, Yael Glassman, American Well's VP of marketing, holds over all responsibility for all of the company's marketing activities. Appendix 1 Exhibit A Targeted Segment Customer Need Corresponding Feature/Benefit Physicians - work/life balance without sacrificing earnings - Online conferencing offers the ability to work from any remote location as long as there is internet connection. - Add a 2nd shift - Physicians with families are able to leave work early for family matters and make up earnings from home in the evenings. Insurance Companies - Decrease cost - Since insureance companies reimburse physicians for patient visits, online patient consultations will cost significantly less the office visits. - Add new sources of revenue - Online consultations will be affordable to uninsured inviduals, allowing them to pay out of pocket. - Improve public image and reputation - By offering Online Care, insurance companies could improve their image by offering medical consultations to the uninsured, underserved populations, remote locations, and disabled patients. Patients - Greater choice and selection among physicians - Patients are able to read reviews on physicians and decide whether or not to consult with a specific physician. - Ability to seek various opinions - Patients are able to easily find 2nd opinions to verify diagnosis

- Update, access, and exchange medical records - Ease of use in recording, transferring and accessing personal medica records. Team Edition Seeing Specialist in Person With Team Edition Cost to Patients Cost Cost to Patients Cost Copay $25 - $30 Copay* $0 Typical Out-of-Pocket Costs* $100 - $5000 Typical Out-of-Pocket Costs $100 - $5000 Cost to Insurance Companies Cost Cost to Insurance Companies Cost Physician Reimbursement $75 - $100 Physician Reimbursement $75 - $100 Specialist Reimbursement $200 - $9000 Specialist Reimbursement $200 - $9000 Other Costs Cost Other Costs Cost Time - Patient Varies by person Time - Patient $0 Gas - Patient Varies Gas - Patient $0 Wear and Tear on Car - Patient Varies Wear and Tear on Car - Patient $0 Insuring Patients due to inability to See Specialist immediately - Insur. Comp. $10k - $500k Insuring Patients due to inability to See Specialist immediately - Insur. Comp.** $5k - $250 * - Portions not covered by health insurance * - Copay would be $0 since patient meets on same day when seeing physician ** - assuming that medical problems are detected early and are treatable thereby reducing longterm insurance coverage for individuals