Why Telemedicine Faces Growing Pains: The Innovator's Dilemma in Healthcare
The focus of this week's news has been on the possible decline of telemedicine and virtual care. Leading companies such as Walmart, Optum, and Walgreens have all made announcements about closures in the virtual healthcare sector. Walmart has confirmed the closure of its clinics, Optum has ceased its virtual care operations, and Walgreens is shutting down 160 VillageMD clinics. In addition, Amwell is encountering challenges, and Amazon has completely closed its telehealth business. These developments raise concerns about the future of the industry.
The recent closures of telehealth and virtual clinics by major players like Amazon and Walmart highlight several challenges hindering the industry's growth:
Clayton Christensen's book, "The Innovator's Dilemma", delves into the reasons behind the failure of well-managed companies when confronted with disruptive innovations. The key concept is that successful companies tend to prioritize sustaining innovations, which are incremental enhancements to current products or services, tailored to existing customer demands. However, they may neglect disruptive innovations, characterized by novel technologies or business models that initially target niche markets but gradually pose challenges to established companies.
The dilemma arises because established companies tend to prioritize their existing customers and high-margin products, which makes it difficult for them to invest in and pursue disruptive innovations that initially offer lower profits and may cannibalize their existing business. As a result, they often dismiss or underinvest in disruptive technologies, leaving room for smaller, more agile competitors to gain a foothold in the market.
For many large companies, this presents a classic innovator's dilemma. Telemedicine, while essential, isn't generating significant profits to satisfy shareholders. Despite this challenge, telemedicine isn't disappearing; it will continue to be a vital part of healthcare. These hurdles don't diminish the sector's potential; rather, they signify a typical evolutionary phase. Most companies are actively refining business models to remain relevant in the sector. Additionally, telemedicine market has evolved into somewhat of a free-for-all, signaling the need for consolidation. Pooling resources is more beneficial than competing over a limited share of the market. A strong value proposition for all stakeholders is crucial.
What does the future hold for African telemedicine market?
Telemedicine is likely to experience significant growth in Africa, potentially becoming a crucial component of its healthcare landscape. This stems primarily from the continent's widespread lack of access to traditional healthcare services. Unlike the US market, African startups in this field won't face established players, creating a unique opportunity.
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Africa has a history of "leapfrogging" technologies, bypassing older infrastructure and readily adopting newer solutions. For instance, the continent was initially predicted to struggle with widespread telephone adoption due to the high cost of fixed lines. However, when mobile phone technology emerged, Africa became the fastest region to embrace it, precisely because they lacked the older infrastructure. This pattern suggests that telemedicine adoption in Africa could be more rapid and successful compared to the US due to the existing lack of traditional healthcare access.
Similar to the mobile phone revolution, where countries skipped fixed-line technology due to its expense, Africa's lack of traditional banking systems paved the way for the widespread adoption of mobile banking solutions like Mpesa. This demonstrates the potential for telemedicine to thrive in Africa by filling a critical gap in existing healthcare infrastructure.
Addressing telemedicine challenges requires a comprehensive approach that involves collaboration among stakeholders, including policymakers, healthcare providers, technology vendors, and patients, to foster innovation and overcome barriers to the widespread adoption of telehealth. Africa can lead the way!
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Digital & Telehealth consultant.
6 个月Thank you for sharing Lepeke Mogashoa and André Thobois for reposting. May I add that the value proposition is also critical to the adoption of telemedicine...solving a problem, and removing a pain point matters to a successful telemedicine program adoption. It also helps to avoid tackling the BIG well established Corporation head-on. A focus on a minimum viable customer segment is critical. Then grow!