Case study #4And questions...please make sure you include everything because for the previous one I got just 70 ...if you have more information then 4 page please let me know I vill pay you more
Boston Telecare: Disruption and Strategy in the Home Healthcare Industry INTRODUCTION Boston Telecare1 is a start-up technology company that meets the needs of older adults by helping them live independently while still staying connected 24/7 to their loved ones and healthcare providers. The company was founded in Boston, Massachusetts in 2019 by software developer and successful entrepreneur Camila Garzon after she experienced the challenges of trying to care for her own aging mother and aunt who both lived several hours away in Hartford, Connecticut. The healthcare industry is being disrupted by the use of remote technology, and a market for remote care is fast emerging. Through its ForeverMind™ platform, Boston Telecare plans on being a disruptor by offering remote 24/7 health and wellness monitoring using easy-to-use wear technology that tracks various key health indicators and interacts with the user throughout the day. ForeverMind™ collects real-time data using Internet of Things (IOT) technology, providing its users with their health data, medication reminders, social engagement, and reports designed to help family members stay informed and connected. ForeverMind™ received positive results when pilot tested at a major hospital system in Hartford. The company currently has a small base of paying customers, and surveys of potential customers show a strong likelihood of product adoption and acceptance of the company’s proposed pricing. Based on these facts, the equity investors who funded development of the company are prepared to support a large-scale roll-out of ForeverMind™ in the United States. Camila Garzon is faced with the challenge of identifying the appropriate business model, pricing strategy and customer acquisition plan to present to these investors. (See Tables 1 and 2). 1 Boston Telecare is a fictitious company. However, survey data in Tables 1 and 2 were conducted by the author and contains actual consumer feedback. CURRENT ENVIRONMENT Boston Telecare offers a value proposition uniquely positioned to remediate some of the health, safety and staffing concerns resulting from the ongoing effects of the COVID-19 pandemic. In addition to the concern surrounding the spread of COVID-19 to the elderly, this pandemic has exacerbated the staffing shortfall in the approximately 2.3 million staffed home care and home health agency field that provides health care and assistance for elderly who live at home independently or in an adult community (Tyler, et al. 2021). Exacerbating this staffing shortage is the demographic reality of an ever-increasing senior population that is living alone but still require some level of assistance and care. Also, since the beginning of the pandemic, many community-based organizations that offer medical and social support for seniors have increased their capacity for technology based remote outreach and service, further growing the remote eldercare market (Kaplan and Berkman 2021). The emergence of the pandemic also quickened the pace of disruption in the healthcare industry, which was already changing with the emerging field of digital therapeutics. Improvements in technology and emergence of the IoT allow doctors to consult with patients remotely via telehealth appointments. Supporting the growth of telehealth is insurance company willingness to pay for healthcare delivered remotely and patient openness to embracing the benefits of e-healthcare. These disrupting trends have grown even stronger since the emergence of the COVID 19 pandemic and the imposition of social distancing measures especially for the elderly and those with preexisting conditions. THE PRODUCT Boston Telecare competes in the market for remote care, a subset of the emerging field of digital therapeutics. Remote care (also called telecare) is a supplement to traditional in-home health care and has the ability to provide a 24/7 “around the clock” support system. The company’s ForeverMind™ product is a remote digital interactive platform that collects health data from individuals and electronically transmits that information to the individual’s family and/or health care providers for assessment and possible action. Monitoring and care services are delivered using off the shelf wearables such as bracelets and watches to connect the wearer to the internet of things (IoT) sensors. The advent of the IoT technology allows physical devices to connect to the internet to exchange information, collect data and monitor health conditions (OMRON 2021). The ForeverMind™ service monitors and interacts with the user throughout the day, and data is displayed on a smart tablet display or on a web-based app. Data collected is available to anyone granted permission by the user, such as family members or healthcare providers. The service tracks daily vital signs, physical movement and sleep patterns with key health data such as heart rate, pulse, blood pressure, hydration, mobility and social interaction monitored remotely. In case of an emergency, a one touch calling feature allows the user to contact members of their inner circle or a physician with a touch. Social engagement tools such as music, photo sharing and podcasts are also available on the ForeverMind™ app. ForeverMind™ also provides a check-in feature for visitors, which tracks the arrival and departure time of companions such as hired caregivers and cleaning services. These visitors can also leave video updates for family members on the app. Interviews with family members have shown that this feature is highly valued as it provides assurance that the caregivers assigned to their loved one actually showed up at their scheduled time and provided the required services. The app also offers audible and written reminders to the user to take their medications, eat their meals and engage in beneficial activities. These reminders are customizable to the user’s schedule and must be acknowledged by the user, providing a record of their activities. (See Exhibits 1 and 2). CUSTOMERS AND TARGET MARKETS Boston Telecare’s remote care service meets the needs of three distinct yet overlapping groups of customers: Group 1: Elderly individuals and their families The US population of adults over 65 has increased from 38.8 million in 2008 to 52.4 million in 2018 and is expected to reach 94.7 million by 2060 (The Administration for Community Living 2020). Many of these seniors live independently, alone or away from their families. The primary customers in this segment are either the elderly individuals themselves or their children and relatives (referred to by Boston Telecare as the “family circle”). Boston Telecare’s remote health products offer around the clock monitoring and reporting that cannot be addressed by infrequent in-home visits from a home healthcare worker or a family member. The ForeverMind™ app allows the “family circle” to be more involved in the daily life of their aging relative while adding to their peace of mind knowing that their relatives are being properly cared for. These relatives often do not have the time or geographic proximity to be with the user every day, yet they want to stay connected and informed daily. In this current climate where social distancing is still being practiced by the elderly, being able to provide this 24/7 remote support to their aging loved ones is a major benefit of the product and also relieves the stress and feelings of guilt often felt by the “family circle” that they are not doing enough to take care of their elderly loved one. (See Exhibit 3) Group 2: Home Healthcare Provider (HHPs) Home Healthcare Providers (HHPs) provide in-person care at a customer’s home. This care is provided by HHP employees who assist with bathing, administering medications and light housekeeping while also providing companionship and social interaction. This type of care is usually offered by the hour, for whatever number of hours per week contracted by the user. In 2021 there are approximately 430,000 HHPs in the US, an increase of 3.7% from 2020 with no one company (independently owned or franchised) having more than 5% market share (IBIBWorld 2021). Wages are the largest single expense line item in the HHP field at 51%, creating a business model that is heavily reliant on, and impacted by, staffing to meet its objectives and customer expectations (IBIBWorld 2021, Holly 2021). Due to disruptive trends in the industry and the current atmosphere of staffing shortages and social distancing, the business climate is favorable for HHPs to supplement their business model by offering remote health monitoring technology as a means to differentiate their services from competitors, reduce reliance on labor and deliver modern and relevant services to their customers. (See Exhibit 4) Group 3: Assisted Living Facilities (ALFs) Assisted Living Facilities provide housing, cleaning, companionship, meals, and social interaction to their residents but do not have on-site nursing facilities (Seniors Guide 2020). In 2021 there were approximately 30,000 assisted living communities in the U.S., with nearly one million licensed beds and an average of 33 beds per community (American Health Care Association 2021). Residents in these facilities receive tailored support and care based on their medical requirements, intellectual and developmental needs and physical condition. In a recent survey, 99% of ALFs said they were facing widespread staffing shortages, forcing them to reduce new admissions, cut back on services and increase overtime shifts (Muoio 2021). Based on these staffing shortages, ALFs may be open to adopting remote monitoring technology as a means of lessening their staffing burden as it relates to patient care while increasing on-site tracking capabilities. This ability to monitor and report the status of a resident 24/7 could be a valuable new product offering to modernize services and increase confidence among customers that the residents are being well cared for using the most up to date practices. CHOOSING A BUSINESS MODEL: THE OPTIONS Using the target market and cost-volume-profit analysis (CVP), Boston Telecare CEO Camila Garzon and her team went to work to determine the best option for their ForeverMind™ go to market strategy to share with the equity investors. Like most software companies, Boston Telecare has the majority of its operating costs in research and development (R&D), sales, marketing, and customer support. Due to the incubator status of the product, leadership expects that the initial rollout of ForeverMind™ is expected to cover only that additional portion of R&D, sales, marketing and customer support costs assigned. After year one, and depending on the chosen option, ForeverMind™ is expected to then cover their share of additional fixed costs that are currently absorbed by other Boston Telecare products. As a first step, the focus is on choosing a business model, developing a go to market strategy while utilizing CVP to understanding how changes in costs and volume affect income. The CVP analysis will be used to assist Camila and the investors in understanding the total cost and revenue behavior per unit sold to reach the breakeven sales number. The data in Tables 3 and 4 provide an overview of the pricing, fixed and variable cost structure of the two options being considered impacting the CVP and breakeven calculations. Utilizing market trends and customer data (see Tables 1 and 2 and Exhibits 2, 3 and 4), the two options being considered are: (I) sell directly to end users (B2C) or