American Well 2

Topics: Strategic management, Economics, First-mover advantage Pages: 3 (850 words) Published: May 28, 2012
1) Evaluate the American Well business model and value proposition Due to the proprietary Intellectual property and first mover advantage, the current business model of the American Well is fairly lucrative as they are able to earn significant upfront and recurring revenues from insurance companies. The one-time fee along with annual maintenance and hosting fees per addressable life recoups most of the associated costs for American Well. The prorated hourly earnings per transaction from patients also help them enjoy profitability. The value proposition of meeting supply and demand real time is appealing to insurance companies as the reimbursements to doctors is significantly cheaper than the actual visits to the hospital. Apart from the Schumpeterian innovation, the value also grows similar to Metcalfe’s law because it is subject to network effect (More PCP’s using the platform, more patients and vice versa)

2) What value do you see the “Team Edition” creating? The Team Edition provides good value for investment as it combines lot of significant benefits. As evident from the comparison of Exhibits 11 and 12, the cycle time for specialists is much higher compared to PCP’s. Team Edition will reduce cycle time from weeks or even months to minutes while eliminating the hassle of scheduling more and more appointments with Specialists and PCP’s again with times convenient to both parties. It also improves quality and facilitates early diagnosis, immediate attention and prevention of complications or aggravation of diseases. This will also be appealing to insurance companies as it significantly reduce their expenses and enhance their reputation. Another advantage is that the team edition will serve as a complementary facility to normal waiting. 80% of people are impatient and eager enough to do online researches. Since it costs less, patients will be definitely interested to try this option as a first point of opinion without travelling or waiting.

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