QUESTION 16 Answer questions 16 through 18 based on the information below and the information in the question. Digital Disruption Comes to Healthcare A company called Telemedicine Sans Frontiers (TSF from here onwards) is trying to create an ‘Uber Model’ of specialist care delivery. TSF wants to pair specialist physicians worldwide with patients in the US (eventually, they may expand to other geographies). They use a Telemedicine platform and a new business model to bring what they call a ‘disruptive service’ to care delivery. In this model, TSF has signed up a set of specialists worldwide in various specialties (cardiologists, pediatrics, orthopedic surgeons, oncologists, endocrinologists, psychiatry, and so forth). They provide a platform through which patients can connect to an available specialist in some parts of the world (Estonia, Chile, Philippines, Morocco, Thailand, New Zealand, India, etc.). Patients can specify their preferences (language, geography, years of experience, etc.), and TSF’s system will find a match (where possible) between patient preferences and specialist capabilities. The advice offered by the overseas specialist is not binding; these specialists cannot prescribe drugs, nor can they issue any official documents. Think of this as a service where a specialist listens to a patient (like a close friend or a family member who is a specialist physician) and offers advice/opinions. The advice is not meant to have any legal/official purpose. For now, ignore the legal and policy implications and assume that this is doable (indeed, there are variants of this idea that are being tried). The TSF software (app) supports teleconferencing via laptops, handheld devices, and smartphones. TSF also sells additional high-resolution cameras and other support devices (high-quality audio systems, scanners, etc.) for patients who want it. TSF software also supports patient uploading test results, etc. The software portals allow the specialist to send e-mails, voice mails, etc., which the patient may or may not share with her physician in the US. The price charged by TSF is paid (in its entirety) by the patient. It charges roughly 8% of what a specialist in the US would charge for the same service. For instance, if an Oncologist charges $500 in the US for a consultation, the TSF service will cost the patient $40 (8% of $500). TSF has worked out the average fee for each specialty and charges 8% of that fee. TSF will keep 10% of the fee for each transaction and pay the specialist the remaining amount (90% of the fee). In this example, TSF will keep $4.00, and the specialist will receive $36.00. TSF wants to take a leaf out of Uber’s book and offer physician ratings. Patients using the TSF service will be able to rate specialists on a set of factors, such as understanding of their context, diagnosis accuracy, etc. The aggregate scores received by specialists on each dimension will be posted online (within TSF’s portal). In addition, patients can specify minimum scores in one or more of these factors as a part of their search preferences (here, TSF differs from Uber). Which of the following statements about TSF’s business model is most accurate?
a. TSF always charges 8% of a fixed amount and always gives the specialist 90% of the total revenue. This is a pricing model based on 'Fee for Service' and not 'Fee for Outcome.' Therefore, TSF’s business model is a Solution Shop, and the specialist’s work is a combination of Value Added Process Delivery and a Facilitated Network.
b. The specialist operates on a Solution Shop model while TSF’s business model is a combination of VAPD model and a Facilitated Network.
c. TSF is a Solution Shop and the Specialist network is a Facilitated Network.
d. TSF’s business model is a Facilitated Network, and thus, TSF needs to cater to both sides (physicians members and patient members). 5 points
QUESTION 17 A private, for-profit insurance company – Digital Era Insurers (DEI from here onwards) - is considering running a pilot project where it will cover one Tele-consultation a quarter for its customers (patients) that want to use the TSF platform. Which of the following statements below offers the best reason for DEI to cover this service?
a. Suppose its members (patients) and their doctors are able to detect some serious health conditions early on by discussions with specialists via TSF. In that case, TSF’s service may play the role of very cheap preventive (preventative) care. This may save some money for DEI by diminishing the need for expensive care delivery in the advanced stages of an affliction.
b. TSF’s platform is a matching market; It matches the demand for a specialized service with the suppliers of that service. Economics tells us that if these markets work well, they will bring great efficiencies to all participants in the market.
c. Given the shortage of specialists in many areas of the country (and the long waiting times to see some specialists), this is an efficiency-enhancing mechanism priced very reasonably (at 8%). Therefore, it will lead to greater availability of specialists for patients who really need a face-to-face consultation – i.e., in cases of more complicated afflictions that are unsuitable for Tele consultations.
d. Statements (a) and (c) together provide the most complete reason for DEI to cover TSF’s service. 5 points
QUESTION 18 Which of the following statements below best describes the implications of the TSF rating system for specialists (physicians)?
a. The ratings system will take some time to build up to a critical mass. TSF should make ratings a part of the search specifications after there are enough ratings to make them reliable.
b. The ratings system may result in specialists with higher ratings generating more demand for their services, while lower rated specialists may see lower levels of demand.
c. Specialist ratings will cause lower-rated specialists to receive smaller fees and higher-rated specialists to receive higher fees. Eventually, this will result in a two-tier system of low fees and low demand and high fees and higher demand.
d. Statements (a) and (b) together best describe the implications of TSF’s rating system.