Executive summary

Strategic circumstances that require HealthTap to innovate their business model

After analyzing the industry HealthTap is active in, it can be concluded that the company should change its business model, as a result of a shifting basis of competition. This circumstance, as explained by Johnson et al. (2008), implies that the competition in its industry may have quickly evolved or is currently evolving their business to gain a larger market segment. That is, competitors, such as MDlive, First Opinion, and Teladoc, may have adopted certain features or functions in their services that attract more users (Craft.co, 2019; Owler, Inc., 2019). Especially Teladoc seems to be a large player in the digital healthcare market with an estimated revenue of $417.9M USD compared to the $12M USD of HealthTap. This may imply that Teladoc has a competitive advantage that enables it to offer a higher value to its customers. In order to compete with such players, HealthTap should adopt its current business model.

Problem statement

Following the analysis of HealthTap’s current business model, one may state that there is no clear focus in its customer value proposition as the company focuses on multiple factors at once. As a result, HealthTap’s applications only provide medical information and possible diagnoses or prescriptions to users, but no actual medical care. That is, after receiving a possible diagnosis, users still need to visit a local practitioner for a definite diagnosis and actual treatment. Therefore, to improve HealthTap’s efficiency, the company should innovate its current business model.

Business model innovation

As mentioned previously, HealthTap’s main problem is the fact that their current services do not provide actual care. Therefore, creating partnerships with local medical facilities, such as hospitals, pharmacies, and local practitioners, could increase customer satisfaction. Moreover, implementing new functions, such as a medical summary and direct referrals to local facilities, would further improve time efficiency and decrease demands posed on the user. In order to improve the user experience even further, HealthTap may develop a blockchain network to safely transfer users’ medical documents directly to these partner facilities. The blockchain technology will ensure safe data transmission, which is important as a patient’s medical data will now become accessible to multiple medical facilities (Xia et al., 2017).

Improved business model

Customer value proposition

HealthTap’s mission is “to help people feel good, and measurably prolong the life expectancy of humankind by providing immediate access to top medical experts and their trusted health advice, anytime anywhere” (HealthTap, n.d.). This mission suggests that the company’s job to be done is to provide cheap and efficient healthcare. Therefore, HealthTap created an online and mobile platform, through which users can directly consult doctors, ask questions, search for medical information, assess their symptoms, get a treatment plan, and create a medical profile (HealthTap, 2018). However, the proposed business model innovation adds some new functions, such as a map with the closest medical facilities, recommendations from the HealthTap doctor on which facility to go to, and a medical summary including a description of the possible diagnosis, the advised treatment, and the advised medication. These new functions would increase efficiency and save time for the user. As a result, the targeted customers are people with medical issues and limited time, instead the previous focus on people with medical issues, a low income, a limited accessibility to healthcare, and a limited amount of time to customers with medical issues and limited time.

Profit formula

When analyzing HealthTap’s current profit formula it was found that HealthTap uses these premium applications to earn a revenue of roughly $12,000,000 USD annually (Owler, Inc., 2019). This could be explained using the revenue model and the margin model (see Appendix B). Moreover, HealthTap’s annual costs were estimated to be roughly $16,480,152.67, with the estimated annual profit being -$4,480,152.67 ( Teladoc, 2018; Owler Inc., 2019). The proposed business model adjustment would change the profit formula accordingly.

Blockchain development and maintenance costs

Generally, developing a blockchain network from scratch is relatively expensive and time consuming. Therefore, it may be advised to use the readily established IBM’s Blockchain Platform Enterprise Plan, which will cost roughly $12,000 USD annually for the next three years .

Costs of salaries of employees with blockchain expertise

To support the IBM blockchain platform development process, HealthTap could hire 3 teams of 5 developers, 5 engineers and 5 applications developers (Pragmatic DLT Inc, 2018). This would cost the company roughly $1,331,280 annually.

Technology and development costs

HealthTap may still be required to develop new technologies, supporting software, etc, and adjust the online platform as well as the mobile app for the anticipated functions to work properly. This results in estimated costs of roughly $3,084,732.99, $8,151,145.47, and $13,956,489.29 in year 1, 2, and 3 respectively (IBM Cloud Platform, 2019; Shilov, 2018; Teladoc, 2018).

Using Teladoc’s data, HealthTap’s revenues were estimated to be $14,240,128.61, $34,649,653.37, and $62,243,142.77 for year 1, 2, and 3 respectively (see Appendix B; IBM Cloud Platform, 2019; Shilov, 2018; Teladoc, 2018). Consequently, using these new costs and cost changes, the annual profit for the next three years could be estimated as -$2,640,300, $12,702,811.58, $34,490,648.16 in year 1, 2, and 3 respectively (see Appendix B). This provides evidence that the proposed business model will be highly profitable for HealthTap.

Key Activities

An analysis of HealthTap’s current key processes has shown that most attention is directed towards research and development as well as general operational processes to sustain the company’s business. However, with the proposed innovation, three key activities may change this focus. Firstly, stakeholder planning, which refers to redefining the stakeholders including the local medical facilities that HealthTap partners with. Secondly, the design of a blockchain based healthcare data system as supported with the IBM service solution, which may be most important as the blockchain network is essential to the business model innovation. Lastly, managing communications with medical facilities and practitioners may become a key activity to establish a strong collaborative relationship to provide users with quality healthcare.

Key Resources

After analyzing HealthTap’s current key resources, we found that the company utilizes resources such as its channels, augmented intelligence triage technology, human resources, and its broad network of doctors (Healthtap.org, 2019). Furthermore, the company has access to medical databases to store its medical information, such as its library of peer-reviewed articles, its healthcare database, and searchable repository questions and answers (Wiggers, 2019; HealthTap, 2019; PALO ALTO, Calif, 2018; HealthTap, 2018). As for its financial assets, HealthTap has raised total funding of $88.3M (Wiggers, 2019), which may be leveraged as resource to support the implementation of the proposed business model innovation. Additionally, the following resources may be obtained through this implementation:

Technology – a blockchain based system for patient data/receipts

In order to transmit the patient summaries safely, a blockchain network is build as a means of revolutionising EHR (Electronic Healthcare Record) sharing (Mettler, 2016). This could provide HealthTap with increased patient control (Ekblaw et al., 2016), stronger record security (Dubovitskaya, 2017), higher traceability of changes (Halamka et al., 2017), and faster record sharing (Azaria et al., 2016).

Human resources – expertise on blockchain and encryption amongst employees

An expert team is to be employed for system development and maintenance, as well as facilitating the process of training current employees. This could provide HealthTap with access to blockchain expertise and skills as deployed by these experts.

Partnerships – partnerships with external medical facilities and practitioners to provide actual healthcare

To achieve the value proposition of time efficiency, partnerships with external medical facilities and practitioners will be established to combine online and offline medical information, and provide actual healthcare. To be more specific, HealthTap could recommend the user to visit a specific medical facility targeted at their medical issue. These partnerships provide HealthTap with valuable connections to healthcare and medical experts.