While Heal is not the first company to use mobile phone apps in the healthcare industry there are high hopes for this start-up business. It has already attracted an array of high profile investors including the likes of Lionel Richie, Paul Jacobs, Thomas Tull and Rish Tandon the former manager of Amazon’s mobile phone apps business. This is an impressive lineup but what does Heal actually do? Can it make a big difference to the healthcare industry?
Funding
It is very interesting to see the company has already raised $55 million although it has to be said that healthcare is currently a hot topic in the US. The business is the brainchild of Dr Renee Dua and husband Nick Desai who had their “eureka moment” waiting seven hours for a doctor to treat their newborn son in an emergency room. The very fact it has gone from an interesting idea to a business which has now raised $55 million would seem to indicate there is something in this.
What does Heal offer?
Heal is simply a mobile phone app into which you input your personal information, location and medical symptoms. You then enter your preferred appointment time together with credit card and insurance information and the company guarantees a doctor will be with you within one hour. The company has taken on an array of doctors who are able to write prescriptions for medication and each customer receives a summary of services provided within 24 hours. There is a flat fee of $99 for each house call although with added costs the average revenue is $150 per patient.
The company has so far signed up 75 doctors as it looks to roll out the system beyond its main California market. Some of the doctors are full-time employees of Heal although the majority work with the company on top of their paid jobs. They are paid per shift with the average employee working around 20 hours a week.
Business today
The company has so far made 16,000 house calls to date for an array of different conditions which are estimated to have saved the US healthcare system in the region of $5.9 million. It has also reduced non-urgent emergency room visits by patients and partners by 62% as well as a 50% reduction in unnecessary use of antibiotics. When you look at this data and the potential savings if the business was rolled out into other states we can only estimate the financial impact and savings for the US healthcare system. This comes at a time when the US healthcare system is under scrutiny by the incoming president therefore any savings would be welcomed.
As we touched on above, Heal is not the first company to offer such services via mobile phone apps but it does seem to have a very strong business model. Gross margins on the $150 average spend are in the region of 28% and the company is actively seeking to recruit an array of skilled medical staff. The directors readily admit that scaling up the business could well be a challenge in the medium term but if it can maintain the quality of staff going forward and quality of service then it must surely stand a chance?