HealthTap Positions Itself for Rush of Obamacare Patients in 2014

3/7/13Follow @wroush

When you run into a Silicon Valley startup that’s been around for two or three years and has a popular, fast-growing product or service, but is earning little or no revenue, then you know that one of two things is going on. Either the startup has a clear business model in mind, but is waiting for the right moment to put it into action; or it has no idea how to make money and will happily settle for some other kind of payoff, such as getting bought by Facebook (see: Instagram).

The problem for a tech reporter like me is that almost every pre-revenue startup claims to be the first type, whereas a lot of them are really the second.

Which type is HealthTap, the medical Q&A site founded back in 2010? After raising $14 million in venture funding, signing up 34,000 physicians as contributors, and acquiring millions of users, the Palo Alto, CA-based startup is still giving away almost everything for free. That lack of revenue might sound like a red flag. But after a long conversation recently with HealthTap’s founder and CEO, Ron Gutman, I’m fairly convinced that the company has a well-thought-out value proposition and business model. It’s just one that won’t be persuasive until after January 1, 2014.

That’s when the individual mandate portion of the Patient Protection and Affordable Care Act, aka Obamacare, will go into effect. At that point, 30 to 40 million people who are currently uninsured will be able to buy insurance from new health insurance exchanges in each state. All of those people will need doctors. And to cope with the influx, Gutman believes, physicians and the companies they work for will need better communications tools—for example, mobile apps that let doctors answer patients’ questions without making them come in for an office visit.

HealthTap's mobile app on the iPhone

HealthTap's mobile app on the iPhone

What you see right now at Healthtap, in other words, is only the chrysalis. Inside, Gutman says, the startup’s designers, developers, and salespeople are feverishly preparing for the coming overhaul in the healthcare economy. And soon, he predicts, HealthTap will metamorphose from a Q&A site into a service that doctors, hospitals, or provider organizations will buy to manage their larger patient pools more efficiently.

“We want to be the platform where doctors interact with patients outside of office visits,” Gutman says. “That is hugely important and monetizable. We could have been a profitable company today if we had turned on pharmaceutical advertising and stuff like that, but I think there are business models that are much more compelling.”

Not everything on HealthTap is free. If you want an answer from one of HealthTap’s doctors right away, or if you ask a question that’s longer than 150 characters, you have to donate 99 cents to charity. If you want to pursue a private conversation with a doctor, there’s a $9.99 fee. But Gutman says imposing prices for certain interactions is not a way of generating cash for the startup—rather, it’s a way to gather data about what users really want.

“Ninety-nine point nine percent of our focus now is going into growth, distribution, and engagement,” he says.

HealthTap has been through a number of iterations. When I first profiled the company back in April 2011, it had just opened up for public beta testing, and its Q&A system covered just two medical subtopics: pregnancy and infant care. The service was mostly focused on guiding people with active symptoms to pre-packaged yet personalized answers and suggestions. For example, if a questioner stated that she was 18 weeks pregnant and had a mild fever and tenderness in one side, the site would suggest a kidney infection as a possible diagnosis and recommend seeing a doctor (since a kidney infection during pregnancy can be a serious complication requiring hospitalization).

Under the hood, the system was built around a complex “ontology,” or knowledge structure, built in collaboration with more than 500 volunteer obstetricians, gynecologists, and pediatricians. The original idea was to extend the ontology eventually to every medical specialty. That was done, and the infrastructure is still there, fulfilling specialized functions. But after much testing, the outward face of HealthTap evolved into something far simpler. It’s now a Q&A site in the same genre with Quora, Yahoo Answers, Formspring, AllExperts, Askville, and many others, except that all the questions come from consumers, and all the answers come from licensed U.S. physicians whose credentials are in good standing.

HealthTap counts 34,000 physicians in its network across 120 specialties, and Gutman says that every question elicits at least one answer within 24 hours—sometimes much faster. (When I asked a question this week, I got two answers within three hours.)

These are nothing like full medical consultations—Healthtap encourages patients to limit their questions to roughly the length of a tweet, and it encourages physicians to keep their answers to 400 characters. But Gutman says the company’s observations show those are the ideal message sizes for both patients and doctors, especially considering that … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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