Resonating with Amazon.care - Is the Future of Health care Home-based Care?

| 24 Feb 2022

Reading the news on Amazon taking on Teladoc, CVS and Walgreens with Amazon Care – I can’t help but recall one of Amazon’s most Successful Failures – Haven. Less than 10 months ago, this healthcare venture that Amazon was involved in was disbanded — it was surprising to me because this was a high profile partnership between JP Morgan Chase, Berkshire Hathaway and Amazon. The disbanding of Haven seemed to demonstrate how complex and difficult it was to disrupt the US healthcare system.

Amazon Care provides users with a hassle-free way to see a licensed doctor or nurse. Users can connect with care providers via chat or video and schedule for an in-person visit or medication delivery when necessary.

As I read the article, two thoughts came to mind — (i) nothing is wasted on Amazon — no experiments or investments is “bad”, as it is common for seemingly “bad or failed” projects to have a second wind; (ii) the Amazon Care project could be an indicator that home-based care will gain momentum globally.

(I) Nothing is wasted on Amazon

The Inc pointed to the FirePhone as Amazon’s biggest failure as sales failed to pick up even when it was sold for 99-cents when bundled with a contract. Yet, this “failed” project led to an even bigger breakthrough — that of Alexa — which has become a convenient voice assistant where many homes throughout the world can’t do without. The FirePhone was just one example of a failure turned successful (re)deployment at Amazon.

Recall zShop — a response to eBay — was deemed a failure when it was launched in 1999. While the auction platform didn’t gain much appeal then, Amazon didn’t give up and it subsequently transformed into a growing marketplace with thriving business today.

With Haven being parked aside, the (re)emergence of Amazon Care signals their readiness to capture a sizeable market opportunity on their own, regardless of whether there is another partner. It is a testament to Amazon’s hunger to not waste a failure, and to conquer “dreamy” businesses, which is defined by the following characteristics:

(a) Customers Love it

(b) It can grow to very Large size

(d) It is durable in time (Longevity)

(II) Home-based care gain momentum

This led me to consider Vertex Ventures Southeast Asia & India’s (“Vertex”) portfolio — Speedoc. Speedoc is a virtual clinic and healthcare solutions platform that allows users to seek medical care and services from home. Since its inception in Singapore in 2017, Speedoc now has presence in five cities in Singapore and Malaysia. It had completed more than 110,000 visits and served more than 75,000 patients. There are 200 healthcare providers (and counting) who are serving the needs of the patients on the Speedoc platform.

We led the Series A round in Speedoc in Jan 2021 when people were consuming teleconsultation in droves given the COVID-19 (“COVID”) backdrop. We thought teleconsultation has proven its traction but the thesis of going a step further, sending care to the patients, in person, which Speedoc aims to do could be complementary and differentiating. This thesis was met with some skepticism, but it is now beginning to show early shoots in Southeast Asia given that a similar positive trend is happening in the US:

June 2020, Heal raised $100M from Humana for the At-Home Care model.
Mar 2021, Dispatch Health raised $200M led by Tiger and Humana to scale up its in-home medical care;
June 2021, Medically Home raised more than $100M led by Kaiser Permanente and an additional $110M before the year ended, led by Baxter International Inc. “Medically Home’s model is to unlock patients’ homes as safe alternative sites to receive high and lower acuity care across the care continuum in the comfort and convenience of their homes”.
This month (Feb 2022), we read of Amazon’s entry into the home health market.

What are Speedoc’s plans for the Home-based Care space?

Speedoc’s tagline is “Healthcare comes to you”. This relates to bringing care into the homes of patients, be it urgent care, acute care, preventative (such as vaccination, or health screening), diagnostics tests (PCR at home), H-Ward® or tele-consultation.

What is H-Ward®? This refers to hospital care at home or HomeWard. An example will be where patients head to the Emergency Department at a hospital and instead of being admitted to the hospital ward, they are admitted back into the comfort of their own homes (H-Ward®). Speedoc will provide the care and review patients both remotely and in person (with qualified personnel), and in partnership with the hospital.

Does Speedoc and its home-based care service fit the characteristics of a “dreamy” business? The following are some considerations:

(a) Will customers love it? H-Ward® is way more acceptable.

Hospital visitation is clearly not the same after COVID. Hospitals used to be livelier places where families and friends would drop by and visit patients with home-cooked food, flowers, fruit baskets and so on. During the COVID period, visitations were controlled, and when the number of COVID cases rose, the hospitals (in Singapore) reduced patients to having two unique visitors per day, and within time limits. Inconvenience was the lesser of the evil — patients and their families experienced much more anxiety and stress than before. Patients were left on their own after the visits; they also could no longer pace around the wards as freely as before, hence confined to a small space for hours on end, due to movement control. Could such stress retard the recovery process (physically, mentally and emotionally) of patients?

A recent study showed that for COVID isolation, home isolation is superior to centralized isolation in the recovery of COVID-associated depression, anxiety and self-rated health. Patients seemed to recover better despite being in isolation, so long as they are in their homes. Similarly, with the select group of patients under the H-Ward® program, Speedoc noticed that patients were generally happier, recovered better, and the families were less stressed.

In due time, Speedoc will roll out H-Ward® to cover more conditions. Will this be a preferred recovery option for patients if given a choice? After two years of working from home, and having our lives revolved around our homes, I believe we will embrace the H-Ward® option well before the next pandemic hits us.

(b) Will it grow to a very large size & will patients love it? Large Market with Enhanced Engagement Model.

Southeast Asia accounts for 10% of the world’s population, and 20% of the world’s diseases. Public health expenditure in the ASEAN six nations is $420B and is expected to increase to $740B by 2025. According to the World Health Organization, annual healthcare expenditure hovers around $544 or around 4% of GDP in ASEAN, which seems modest compared with the US where it was 9.7% in 2020 (or more than $12,000 per capita). Different research houses indicated that healthcare expenditure will continue to grow at a compounded annual growth rate in the mid-single digits percentages. However, the sky cannot be the limit and governments cannot continue dedicating land, designing, building hospitals and care facilities and staffing them with healthcare professionals.

The paradigm shift would be to capitalize the largest assets that citizens have — their homes. Through this home-based care model, Speedoc will bring certain types of care back into the homes (See Table 1), supported by medical teams who can track the patient in person, or remotely using various monitoring devices. I believe there is still a need for hospitals in the future, however, the hospital wards may start to shift to be embedded within the communities in the form of H-Ward®.

Secondly, instead of merely shifting patients from hospital wards to homes, the larger goal for healthcare should be caring for health (preventative) rather than ‘fixing’ health, ie to help people become healthier or maintain their health status than to treat them when they are ill. By 2025, it is noted that two-third of the Asia Pacific population over 65 years of age will have at least one chronic disease, which if left untreated, can account for high rates of repeated hospitalizations even though some of which could be prevented. While the end goal is to have healthy citizens, we can’t overlook managing those with chronic illnesses to retard worsening conditions.

A recent study found that among the participants who had chronic illnesses, COVID along with a worsened economic status, and inability to access care led to a worsened chronic situation for them. To that extent, the Speedoc app will enable patients to access care via its teleconsultation platform, which can be escalated to a home visit thereby granting access to care.

To cater to chronic patients who, despite being 65 years and older, have become more tech savvy — thanks to COVID, Speedoc’s app will move beyond teleconsultation to engaging with patients. This will include gamification such as sharing responses, sending reminders, notifications and tailoring care to suit patients.

Airbnb changed the face of short-term rentals where it magnified the supply of rooms beyond what brands could provide. In terms of market capitalization, at the time of writing, Airbnb is valued at $110B, which is slightly larger than the combined market cap of Marriott ($57B); Hilton ($43B) and Intercontinental ($9B).

Similarly, Speedoc together with the likes of Medically Home and DispatchHealth, will serve to magnify hospital care beyond the four walls of the hospitals, via expanding the supply of virtual hospital beds. It is worth noting that even though it is still early days, several healthcare players have begun to expand their coverage to include home care programs, such as Kaiser Permanente, the efforts by hospitals in Singapore (through partnering with Speedoc), and Allianz Life Insurance’s partnership with Speedoc to provide AllianzCare@Home.

Some people have expressed reservations concerning the cost associated with home-based care and the scalability of it. While on first impressions the cost appears high; compare these two scenarios:

(i) a patient who is pretty ill and the anxiety and stress brought forth to the family or caregiver of not knowing what to do, while waiting for the ambulance to take the patient to the hospital and only to wait for (sometimes) a prolonged period versus (ii) having a doctor/nurse respond in person to the sickly patient in his/ her home within a reasonable time frame.

The latter seems to be a more preferred and less stressful option. Granted, it is hard to place a price tag when a doctor shows up and soothes the anxiety off the caregiver in the comfort of the patient’s home, but it is obvious that that option creates value. We believe this is early days but insurance players (in Southeast Asia) are likely to be evaluating and assessing this home-based care model and in time to come, will broaden its coverage schedule to also include home-based care.

(d) Is it durable in time (Longevity)?

Yes there are helpful trends that show that this ‘recover at home’ trend is here to stay.

Proliferation of increasingly reliable and sophisticated wearables like Apple watch that can track a variety of vital stats and transmit needed information to the healthcare professionals
Beyond vital stats, wearables can also monitor and analyze patients’ movements, allow them to perform therapeutic exercises and recover at home
Miniaturization of large hospital equipment such as oximeter, blood pressure monitor etc

While we may still choose to head to the nearest General Practice clinic for acute issues, with time and good user experience, we could morph our preference over to Speedoc since the platform provides a range of care services, and at our convenience and time. Perhaps with time, instead of us waiting to consult the doctor or specialist, it could turn around where they will wait to treat us.

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