Evaluating Patient Aggregation Opportunities (Part 2)

I can never write just a 1-parter, can I?

Aggregating patient trust

If those dimensions from Part 1 weren’t difficult enough to build for, there’s more!

To build an aggregate of relationships, the core approach has to consider longer-term scale: efficiently earning patient adoption & engagement, and aligning patient incentives with internal business outcomes. For NewCos, these have to be deeply considered in the early stages of building - retrofitting new structures will not only be significantly challenging but has the chance of non-trivially lowering the utility of your offering. 

we’re talkin scale

Efficient patient trust acquisition 

Much has been said about the tension between healthcare distribution paths and their ability to engage patients. 

A quick recap: If you sell to incumbents (B2B2C), just one new contract results in a new mass of patients under management, but with that comes the principal-agent problem and its sub-problems: 1) customer acquisition does not equate to patient enrollment and actual utilization, and 2) deprioritization of the patient (as business decisions are driven by the dollar). It’s also well known that these customers themselves have become weary of solutions with low engagement. If the standard B2B route is the one taken, these must stay top-of-mind; otherwise, patient relationships will erode, and subsequently customer relationships. 

Philosophically, the strength of DTC / B2C2B approaches lies in their ability to circumvent these issues due to their truer alignment. Of course, this means that the challenges of patient enrollment are pushed more to the forefront, resulting in high CAC. There’s also no guarantee of continued engagement, only the hope of an easier path to it. 

Whichever GTM path you consider, patient adoption/acquisition and engagement stay paramount (of course). Standard marketing channels and other table stakes growth strategies will continue to be critical skillsets, but to maximize capture, you again can look to opportunities that provide outsized advantage in the acquisition of trust - the advantages being high average “trust size” creating higher conversion and engagement, and/or one-to-many nodes. Some of these might be:

• People patients (already) know: Essentially, the “embedded relationships” sub-bullet within the “duration” dimension. Working through individuals who are themselves incentivized to acquire, engage, and/or benefit patients introduces a non-linear trust aggregation pattern. Organizations like Spark Advisors working through independent brokers or DPC / ACO Reach companies like Taro Health and Pearl Health are investing in such relationships.

  • Perhaps there might be interesting plays here to utilize patient influencers, if handled with clinical scrutiny. Within WellTheory’s founding story, founder Ellen Rudolph shared her experiences with autoimmune disease on TikTok resulting in 1.6M views - serving as proof of unmet need and partly catalyzing the eventual founding. Generally, demand for content authenticity is rising, resulting in mediums like TikTok becoming an increasingly powerful organic growth channel. Enabling authentic content creates obvious utility in the short term (patient finds immediate solutions or empathy to their problems) while also accelerating duration through building a human connection. This seems to be a powerful technique towards defensible trust aggregation that’s largely underexplored in healthcare currently. Also a powerful technique towards increasing my weekly screen time 500%.

sure in this scenario it could better patient lives but when I do it I’m “wasting my time” and “ruining my eyes”

• Places patients already are: Essentially, the “proximity to routine non-healthcare interactions” sub-bullet within the “frequency” dimension. Meeting patients where they are, commonly through their homes/neighborhoods/ communities, reduces acquisition friction, while also revealing more about the health environment. Fabric Health and Live Chair Health are popular recent examples for their unique identifications of powerful community health locations. Recent rural care models such as Hopscotch Health strive to emphasize not only connecting with the rural communities they serve, but actively building community relationships.

• Patient-to-patient interactions: There’s similarity here to “People patients already know” - patients themselves can be one-to-many nodes for patient acquisition, and provide arguably the deepest baked-in trust. Charlie Health, Groups Recover Together and orgs/domains that naturally support patient groups (ex. Alcoholics Anonymous) lend particularly to patient referral processes as patients become evangelists. Nest Health provides care to the whole family, alleviating child health needs while also providing Medicaid VBC to parents.

  • What’s intriguing to me is seeking patient-to-patient interactions that may even drive patient adoption network effects. A potential option: online communities. Currently fairly underutilized by healthcare orgs, a simple search of Reddit for [insert condition here] can show demand and proof of concept. Half the time, I achieve more therapeutic benefit from ADHD memes than I do from actual therapy (kidding).
    In a digital age, it’s a no-brainer to say that patients spend far more time online than interacting with the healthcare system, and largely we’ve failed to harness that mindshare. Over time, online community assets provide higher LTV and lower CAC that hedges against healthcare services with lower LTV and higher CAC.
    In the immediate, I’d anticipate that this would be high potential for dominantly online populations (check out this great report on Gen Z healthcare by Springbank Collective and Able Partners), or conditions with high complexity or stigma. Roon is an interesting play here. Providing depth/quality of experience to common health problems with community could unlock true scale potential for virtual care.

Anand Sanwal @asanwal

Hubspot, @stripe and JP Morgan Chase all acquired similar companies recently Really?! Yup - Tech and financial services are looking to buy media companies and communities And this type of M&A is going to accelerate Why? In 6 letters, the answer is LTVCAC 🧵

• Lying tangential to community and also the point on “authentic content” is user-generated content. Tia again is a great example here, having doubled down on UGC for patient acquisition & engagement and creating positive brand associations (trust!) in doing so.

Patient-aligned incentives

To combat healthcare’s misaligned incentives, new organizations need to deeply consider building from the go with models that create positive financial outcome for patients and market pressure. This also should naturally scale better. If the patient is incentivized towards positive action, and such action results also in net gain for the business, there’s no tradeoff made to patient outcomes in the path to finding positive unit economics.

looked up “alignment” images and found this. doesn’t feel relevant but what a ridiculously whimsical graphic

The most popular approach currently is providing patients with utility (direct or wraparound) while selling second-order trust implications (improved engagement, lowered cost of care, medication adherence, better outcomes, etc.) to payers. The obvious examples here are risk-based models - firsthand not only provides core SMI care and services, but also provide patients with easy access to benefits beyond “traditional” health (food, utilities, housing, legal, etc.) that improves trust volume.
The best and cleverest B2C2B models will have innovated here as well. In the case of Capsule, a patient pays nothing for convenient access to medication, while Capsule earns based on improved adherence.

Arbitrage models, though more uncommon, have exciting potential to help patients flex outsized leverage by surfacing previously obfuscated information (commonly price, quality of care, quality of experience). The most written about one recently is GoodRx. For those unfamiliar, GoodRx provides patients with access to cash pay pricing across all PBMs, providing patients with necessary medication at the same quality with cheaper prices while enabling price competition and downward market pressure. Some other domains I’m keeping an eye out here:

• The insurance enrollment domain has been ripe for this opportunity and has seen attention from recent companies in the ACA & MA brokerage and ICHRA domains. Given that the CMS Price Transparency Rules for Payers are starting to kick in, along with on-ramp / Patient Access API companies like Flexpa lowering barriers to data access, the attention in these domains may start to pick up.

• Cash pay marketplaces like Sesame and Mishe have emerged recently, and on paper disintermediate the patient-payer relationship (and provide price transparency). I’m looking forward to seeing how they address common questions such as: patients overindexing on price at the expense of quality; clinician experience (Mishe team thread here); expansion into more complex care.

• *Turquoise has been one of the more intriguing new companies recently - by increasing access to price transparency, they might unlock more companies to enable this form of arbitrage. They’ve also hinted at a consumer-facing motion - really curious to see how that plays out.

Generally, most arbitrage opportunities might require deep knowledge of some archaic section of the healthcare supply chain, then developing B2B motions with relevant (and likely archaic) players to gain an industry-holistic data perspective.

There’s also the pure incentivization of desired behavior. In its simplest form, this might look something along the lines of Oscar’s introduction of the step counter program (of which true outcomes are debated). More recently, Garner Health reduces patient out-of-pocket cost if the patient chooses a provider deemed quality under Garner’s analysis. These might be smaller engagement “hacks” as opposed to true business models, but perhaps they move the needle positively. 

Despite healthcare’s labyrinthine incentive and supply chain structures, there’s many more creative models to be unlocked with deep analysis. If the result is positive patient outcomes, lower costs, and a scalable business, is that not a worthwhile pursuit? 

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Now what?

How quickly your organization can effectively amass the largest aggregate of patient trust, and average trust volume versus that of competitors, will determine early likelihood of success.

Even still, trust will be fragile. Delivering on what you promise the patients and continual improvements in experience & outcome (by increasing the trust volume you can capture) is what maintains trust, builds brand equity over time, and strengthens early defensibility. It’ll also be key to continue searching for opportunities that drive network effects and trust stickiness, in pursuit of the truest moat.

If defensible scale is reached, a natural benefit is pricing and contracting leverage. The greater the aggregate, the greater the leverage, and ideally this power is passed to patients - either through exertion on their behalf, or directly providing patients themselves with aggregate leverage.

For certain aggregators, particularly those which are care domain agnostic, there’s intriguing implications for steerage. As healthcare continues to unbundle, and new services arise while old ones expand - without building cross-service experience pipelines (referrals, care continuity, data, etc.) - fragmentation in the system continues to grow. The strategic answer from many larger orgs has been consolidation, with largely mixed results (wrote more about these trends with Brendan Keeler and Megh Gupta here!)

Orgs that can truly harness deep trust might earn the right to advise the best options for patients, while utilizing the above described leverage to drive said options toward patient-forward quality, cost, outcomes, etc. In the largest scale, this might result in such orgs owning the demand-side of the market - becoming the de-facto “front door”.

patient aggregators that don’t read this post

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Special thanks to the below folks in particular for initial reads and critical feedback:

• Bobby Guelich - Elion (Check out the recent marketplace launch!)

• Rik Renard - Awell, CareOps

• Krish Maypole - Icon Health, Substack: Point of Care

• Rachel Menon - Buoy