Consumerism_Virtual Care_the Next Frontier

SHOPPING
THE SYSTEM
CONSUMERS FIND VALUE
IN VIRTUAL CARE
By, Kevin Smith, DNP, FNP, FAANP

Shopping the System: Consumers Find Value in Virtual Care 2
About the Author
Kevin Smith has been a leader in
innovative care delivery since 1999,
when he joined physician and business
partners to help develop MinuteClinic
(originally QuickMedx), the first retail-
based clinics in the country. Throughout
his time at MinuteClinic, he contributed
to electronic health record design,
integration of evidence based content
and clinical quality control, serving
in various leadership positions. In
both clinical practice and his doctoral
studies, Dr. Smith has focused on
innovative applications of technology,
clinical decision support, and analytics
to drive clinical quality improvement.
In his role as Chief Clinical Officer at
Zipnosis, he continues to be a force
for positive, innovative change in the
healthcare industry.
TABLE OF CONTENTS
Introduction 3
Consumers are Choosing Convenience 4
Value and the Healthcare Consumer 5
Real Value Is Customer Focused 6
Qualities Consumers Value 7
Virtual Care Delivers on Value 8
Patients Are Looking for More 9
Where Will Your Patients Go? 10
Retail Healthcare: An Analog for Virtual Care 11
The Foundation of Disruptive Healthcare 12
The Retail Clinic S Curve 13
Climbing the S Curve 14
Virtual Health Is the Next Frontier 15
Business Growth and Patient Adoption 16
Virtual Care is Growing 17
The Time is Now 18
Virtual Care Rising 19
The Zipnosis Solution 20
The Zipnosis Virtual Care Platform 21
References 22
Kevin L. Smith, DNP, FNP, FAANP
Chief Clinical Officer, Zipnosis

I N T R O D U C T I O N

INTRODUCTION
PATIENTS ARE CHOOSING CONVENIENCE
Is your health system, hospital or clinic prepared to meet the new
demands and expectations of consumer-minded patients?
The shift from passive customers to savvy healthcare consumers
has been predicted for years, but traditional brick-and-mortar care
providers have remained relatively immune. Not anymore. Shifts in the
market and advances in technology, among other factors, have given
patients the incentives, tools and options to make different decisions
about how they receive care.
Market Incentives Technology Tools Competing Care Options
Patients are paying more
out-of-pocket
Mobile devices,
wearables and apps
are a way of life
Retail clinics and
virtual care services
offer customer-friendly
convenience
“Thanks to technology and shifts in
financial incentives, care will begin to
move into the palms of consumers’
hands, providing care anywhere,
anytime.” i
- PwC Health Research Institute
“The tension in the shift to a customer-
service orientation is the divergence
between changing consumer
expectations and a healthcare industry
unused to dealing with consumerism.A
deep understanding of the consumer’s
attitudes and behaviors is vital in an
environment that places patients at the
center. How an individual perceives
healthcare is unique and intensely
personal...” ii
- Deloitte

VA L U E A N D T H E
H E A LT H C A R E C O N S U M E R

REAL VALUE IS
CUSTOMER-FOCUSED
How patients measure value in healthcare has changed over time.
Traditionally, value in healthcare has focused on the doctor-patient
relationship; later value was tied to in-network providers and services
covered by insurance. Today, how healthcare consumers define
value is changing to a venn diagram of convenience, cost, quality
and service. Driving this shift are three key changes in the healthcare
landscape: the emergence of choice-oriented insurance, employer
risk-sharing and enhancements to support consumer choice, and
improved accessibility to quality ratings and price information.iii
Harvard Business School professor Theodore Levitt once said,
“People don’t want a quarter-inch drill, they want a quarter-inch hole.”
Innovation guru Clayton Christensen defines customer value in terms
of the real jobs a customer wants a particular product or service to
do. Value, in other words, is a measure of how well the customer’s
“jobs-to-be-done” are satisfied.
So what does value mean to the patient-consumer? Every patient
is going to have different wants and expectations depending on
priorities and needs. Every provider will have different capabilities or
specialties to shape their competitive offering. However, there are four
fundamental areas in which those providers will be judged.
“Whether healthcare companies need
to perform as well as Apple and Amazon
on customer experience remains to be
seen. However, the evidence suggests
that just performing better than other
current healthcare competitors will not
be sufficient. Customer expectations are
being set by non-healthcare industries,
and meeting those expectations is likely
to be critical to ensure satisfaction and
loyalty.” iv
- McKinsey
“The implementation and effective
use of Internet, mobile and video
technologies offer hospitals, physician
groups and health plans ways to
improve their performance and provide
greater convenience and value to
patients.” v
-American Hospital Association

Shopping the System: Consumers Find Value in Virtual Care
Q U A L I T I E S C O N S U M E R S VA L U E
THE DRIVERS OF CONSUMER VALUE
What do healthcare consumers want?
The same things they want in every industry:
% of respondents (N=2,255)
Non-healthcare companies
Healthcare companies
Providing great
customer service
Delivering on
expectations
Making life easier
53
53
42
43
37
37
39
36
Offering great value
0 20 40 60 80 100
Service
Quality
Convenience
Price
1
Participants were oﬀered 10 qualities and
asked to select the 3 they thought mattered most.
Source: McKinsey 2015 Consumer Health Insights Survey

V I R T U A L C A R E D E L I V E R S O N VA L U E
Price
• High deductible plans are
putting more of the cost
burden on individuals. In
2013, nearly half of healthcare
consumers reported higher
out-of-pocket healthcare
spending from the previous
year. Expenditures are
projected to rise to 5.5% by
2023, up from 3.2% in 2013.
vi Meanwhile, employer
benefit costs are expected to
rise 6% in 2016.vii
• Patients are starting to shop,
compare and demand more
accurate pricing. viii
Price
transparency will hit care
providers and payers hard.
Once price factors into
decision-making, customer
expectations change.
Convenience
• In a 24/7 world, patients
want convenient healthcare.
Retail clinics, mobile apps
and virtual health meet this
demand.
• Most retail clinics accept
commercial insurance,
Medicare and Medicaid; all
accept cash. ix
Most visits
happen after normal business
hours x
... because clinics are
convenient.xi
• 78% of employers want
to offer telemedicine to
employees, up from 48% in
2015.xii
60% of consumers
would video consult a
clinician. Millennials prefer
virtual health over in-person
visits.xiii
58% of clinicians
wish to provide some care
virtually.xiv
• From 2013 to 2015, adoption
of health-related smartphone
apps doubled.xv
21% of
patients have ordered
prescription refills by mobile
device.xvi
Service
• Expectations for customer
service in healthcare are
similar to other industries.
53% of US healthcare
consumers want great
customer service, 43% want
expectations met, 37% want
health companies to make
their lives easier, and 36%
want great value. xvii
• Consumers measure clinician
empathy, support and
information about treatment
even higher than outcomes
when assessing satisfaction
with their care. xviii
• New healthcare companies
are winning through positive
customer experience. They
“provide a service, offer
information and advice, and
empower consumers to take
a more direct role in their own
wellness and care.” xix
Quality
• Healthcare measures
quality through internal
numbers like length of stay,
readmission rates and errors,
but these metrics mean little
to consumers. Quality is a
table stake in the consumer
mind; there’s no more room
for providing service below
baseline expectations.
• Already, retail clinics deliver
care “equivalent, if not
superior to the quality of
other ambulatory care
sites.” xx
• To secure quality care, 46% of
patients are willing to travel
longer distances, 33% are
okay with longer wait times,
and 19% will accept higher
costs.xxi
• Virtual care offers a new
avenue for quality reporting.
Zipnosis, Inc. recently
reported a 98.4% guideline
adherence rate for treatment
of acute sinusitis. xxii

PAT I E N T S A R E
L O O K I N G F O R M O R E

W H E R E W I L L Y O U R PAT I E N T S G O ?
Once patients are gone,
they are hard to get back.
Direct-to-consumer virtual health and
telemedicine companies are backed
by billions of dollars in venture capital.
And competing health systems are
increasingly employing telemedicine
services or virtual care offerings. These
competitors are coming hard for your
patients with consumer-focused digital
solutions, just as patient mindsets are
becoming more sophisticated and
value-conscious.
With more than 60% of healthcare
consumers stating they rate health
systems that offer the newest, most
innovative technology higher than
their counterparts xxiii
and 76% of
patients stating that access is of greater
importance than than human interaction
with their providers,xxiv
it’s clear the
public is primed for virtual care.
What will this cost you?
Patient leakage is a growing concern,
even for health systems in less
competitive markets. With the lifetime
value of a patient approximately $1.5
million,xxv
imagine the impact to your
system if 4-5% of your patients leave
each year in search of more convenient
care. The effects will not be limited to
a decrease in revenue. The adage that
it costs more to attract a new customer
than it does to retain one is true in
healthcare as in other industries. The
need to replace patients that have
jumped ship can cause health systems
to divert capital away from care and into
patient acquisition efforts.
Your best source of competitive
advantage is to link efficient virtual
care offerings with your trusted
brick-and-mortar brand.
“New entrants are flooding into
healthcare riding the waves of
innovation, technical capabilities,
and scientific discoveries. Start-
ups are targeting clinical delivery,
health and wellness, population
health management, data, and
analytics. Many see consumers as
a natural entry point and are built
to support patient engagement
by helping patients manage their
health and care by providing
information, skills, capabilities,
and support to help consumers
make smarter choices.” xxvi
- McKinsey

R E TA I L H E A LT H C A R E :
A N A N A L O G F O R V I R T U A L C A R E

This is not the first time the healthcare industry has faced
widespread disruption. I’ve seen it before - with the
launch of retail clinics in the early 2000s.
Virtual care’s impact on the healthcare industry is tracking
closely with that of retail care clinics less than two
decades ago. Already, health systems are competing
with direct-to-consumer virtual offerings, mirroring the
industry’s response to retail clinics in the early 2000s.
Retail healthcare began in Minnesota with the 1999
launch of MinuteClinic - called QuickMedx at the time. I
joined the venture that year to build the nurse practitioner
side of the business, while working with the team to write
the clinical protocols for care offerings and developing
the organization’s ability to manage quality.
From the beginning, I was sold on the power of bringing
a consumer focus to healthcare. In this industry, we
talk a great deal about putting the patient first, but at
MinuteClinic, we actually were. Coming at care delivery
from the patient’s perspective was wonderfully exciting.
We couldn’t believe no one else was catering to patients
as customers in this way.
We quickly found out why: the medical establishment
stood in the way. Physicians and hospitals were resistant
to care being delivered in retail settings by nurse
practitioners. In response, our strategy was to let the
quality of care speak for itself. Every time we encountered
an influential critic, we invited that person in for a tour of
one of our MinuteClinic locations. Typically, they walked
away very impressed.
Overcoming patient resistance was easier, though. The
user experience was amazing. People couldn’t believe
how easy it was to walk in and get their health needs
taken care of so quickly and inexpensively.
“In 2016, millions of American consumers will have their first
video consults, be prescribed their first health apps and use
their smartphones as diagnostic tools for the first time.These
new experiences will begin to make real the dream of care
anywhere, anytime, changing consumer expectations and
fueling innovation.” xxvii
- McKinsey
T H E F O U N D AT I O N O F D I S R U P T I V E
H E A LT H C A R E

In early years, growing the MinuteClinic business was a
hard slog, despite early adopters like Blue Cross and Blue
Shield of Minnesota. By 2005, there were 11 clinics in
Minnesota, and we had only extended into one additional
state. Then CVS acquired the company in 2006.
Over the next seven years, growth continued at a snail’s
pace, and by 2013, the retail clinic experiment was
considered a disappointment by some. Experts blamed
U.S. healthcare’s perverse incentives and regulatory
impediments for slow growth. The slowdown was
temporary and today, growth is accelerating.
The trajectory of retail clinic business, however, is almost
beside the point. Even early on, retail clinics caused a
significant shift in “business as usual” throughout the
healthcare industry. Clinics began extending their hours
to better serve patients, and many health systems opened
urgent care facilities – bearing striking similarities to the
retail clinic model – when they realized how appealing the
convenience retail clinics afforded was to patients.
In 2010, when CVS moved the MinuteClinic headquarters
from Minneapolis to its Woonsocket, Rhode Island
location, I left MinuteClinic for a new area of healthcare
innovation - telemedicine and virtual care, joining Twin
Cities-based Zipnosis.
While market forces are different for virtual care, the
philosophy is the same. Engaging clinicians and driving
new patient acquisition are critical for health systems, but
we are still enticing health care consumers through the
promise of convenience, service, quality and price.
And healthcare consumers are responding. At Zipnosis,
we see virtual care helping health systems with both
patient retention and acquisition. In markets where
regulations permit, our new to existing patient ratio is
50:50 on average. And, having a virtual care offering
can be a deciding factor in attracting new patients into a
health system.
T H E R E TA I L C L I N I C S C U R V E

C L I M B I N G T H E S C U R V E

VIRTUAL HEALTH IS THE NEXT
FRONTIER
If it feels as though the pace of change is picking up, that’s because it’s
true. Product life cycles are faster than ever from development through
widespread adoption. While it took nearly 15 years for retail clinics to
achieve a sustainable business model, their disruptive influence on
the industry became apparent much more rapidly. Similarly, direct-to-
consumer telemedicine companies are already making ripples in the
healthcare community, and their path is made easier by infusions of
capital from venture firms and other investors. The road to virtual care
delivery promises to be much faster and smoother.
“We believe that healthcare
consumerism will soon enter the
steep slope of the innovation S curve
and become a much more significant
force. Payers and providers need to
begin making plans now if they want
to be ready to respond to, and perhaps
shape the evolution of, healthcare
consumerism.” xxviii
- McKinsey
“New databases and database tools
will allow industry players to analyze
data from many sources in novel ways,
finally unlocking insights embedded
in the reams of information being
collected about health consumers.”xxix
- PwC Health Research Institute

B U S I N E S S G R O W T H A N D
PAT I E N T A D O P T I O N
Retail Clinic Adoption
In 2010, there were 1,183 stores. By
2015 the number was 1,866.xxx
This
number is expected to jump to over
3000 in 2017, as CVS alone, which
operates about half of existing clinics,
plans to reach 1,500 clinics by then.
NumberofU.S.RetailClinics
3,000
2,600
2,200
1,800
1,400
1,000
2010 2011 2012 2013 2016
Source: Convenient Care Association
Year
Virtual Care Adoption
The number of telehealth customers is expected to increase to seven million by 2018.xxxi
Between 2015 and 2016 the number of large employers offering telehealth options jumped from 48% to
74%. xxxii
Over half of millennials would choose a primary care provider that offers a virtual care service over one that does not. xxxiii

The key driver in virtual care’s growth is consumer demand. Once consumers have been primed to expect
value in a new product or service, they drive that growth faster.
The challenge for incumbents is speed and value. Hospitals and health systems will get passed by, just as
they were by retail clinics, if they do not adopt and implement an effective virtual care strategy soon.
V I R T U A L C A R E I S G R O W I N G
Patients Clinicians Health Systems
Comfort with technology Ease of use Prevent patient loss
Expectations for convenience Convenience in workflow New patient acquisition
Power to compare Quality of interaction First on the block
Ability to manage own data Better access to data Driving up value
What’s Driving Adoption?

T H E T I M E I S N O W

In the face of healthcare consumers’
new value focus, health systems are
faced with a difficult decision: adapt or
become irrelevant. Fortunately, virtual
care offers not only a way to meet the
consumer demand for convenient,
quality care, but a strong value
proposition and ROI fueled by increased
clinical efficiency, diminished patient
leakage and new patient acquisition.
Systems that move quickly have an
opportunity to position themselves as
leaders in their markets.
The Zipnosis platform is the optimal
answer to needs of both health systems
and healthcare consumers.
V I R T U A L C A R E R I S I N G
Patients Health Systems
Convenience of an anytime,
anywhere care and diagnosis
Increased efficiency using
marginal clinical capacity
Inexpensive means of
obtaining quality care
Proven clinical quality
Seamless experience from
virtual to in-person visits
White-labeled, brand-forward
platform
Confidence comes from
working with a trusted
health system
Smart triage and follow-up
options, keeping patients
in-system

T H E Z I P N O S I S S O L U T I O N

T H E Z I P N O S I S V I R T U A L C A R E P L AT F O R M
Price
Virtual care is inexpensive;
providers can set
their own price.
Convenience
The asynchronous interview
is the most convenient entry
point for patients
and clinicians.
Service
Patient data is captured from
the outset, so the care path is
seamless and integrated.
Quality
The clinicians are yours and
care delivery is inside your
system, so you have total
confidence in quality
and cost management.
Brand
White-labeled platform creates a seamless brand
experience.
Clinical quality
Evidence-based protocols with clinical decision
support and curated diagnosis pathways produce
high levels of guideline adherence.
Clinical efficiency
Ability to use marginal clinical capacity to deploy
without increasing staff or outsourcing clinical
functions.
Flexibility
Multiple access points to adapt to patient and
regulatory needs
Partnership
Team committed to collaboratively building a
comprehensive virtual care service tailored to unique
business and patient needs.
Why Health Systems Choose Zipnosis Over Other Options
ZIPNOSIS VALUE PROPOSITION

R E F E R E N C E S
i
http://www.pwc.com/us/en/health-industries/top-health-industry-issues.html
ii
http://www2.deloitte.com/content/dam/Deloitte/tr/Documents/life-sciences-
health-care/DR16_rising_consumerism.pdf
iii
http://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-
health-care/us-chs-quest-for-value-in-the-health-care-102414.pdf
iv
http://www.mckinsey.com/industries/healthcare-systems-and-services/our-
insights/debunking-common-myths-about-healthcare-consumerism
v
http://www.aha.org/research/reports/tw/15jan-tw-telehealth.pdf
vi
http://www2.deloitte.com/content/dam/Deloitte/tr/Documents/life-sciences-
health-care/DR16_rising_consumerism.pdf
vii
https://www.healthcarelawtoday.com/2015/12/10/consumerism-drives-
employer-retail-clinics-telemedicine-adoption-in-2016/
viii
ix
https://www.manatt.com/Insights/White-Papers/2015/Building-a-Culture-of-
Health-The-Value-Propositi
x
https://rockhealth.com/retail-clinics-the-skinny-for-entrepreneurs/
xi
xii
xiii
xiv
xv
xvi
xvii
xviii
xix
http://www.strategy-business.com/article/The-Coming-1.5-Trillion-Shift-in-
Healthcare?gko=f0e72
xx
xxi
xxii
https://aci.schattauer.de/contents/archive/issue/2329/manuscript/25818.html
xxiii
http://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-
health-care/us-virtual-health.pdf
xxiv
http://www.aha.org/research/reports/tw/15jan-tw-telehealth.pdf
xxv
http://www.physiciansweekly.com/alienating-patients-cost/
xxvi
xxvii
xxviii
xxix
xxx
xxxi
xxxii
xxxiii
https://www.salesforce.com/form/conf/industries/2016-state-connected-
patient.jsp

612.217.1083 | sales@zipnosis.com | zipnosis.com
For more information, contact us at:
Copyright © 2016 Zipnosis. All rights reserved.
A B O U T Z I P N O S I S
Zipnosis provides health systems with a white-labeled, fully integrated telemedicine
platform, treating patients through video, telephone, adaptive online interviews
and smart triage – complete with available pharmacy and lab integration.
Learn more at zipnosis.com

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