HBS QuickMedx Inc. case study
Rick Krieger, Douglas Smith, and Steve Pontius, founders of QuickMedx, a quick and convenient service that offered medical diagnoses, treatments, and prescriptions for certain common medical conditions, were concerned. Each had invested large amounts of time and money into the medical service venture; however, on February 15, 2002, two years after opening its first station, the company was still struggling to post a profit.
Still, the founders remained optimistic. They strongly believed in the concept of QuickMedx and felt that all that it needed was simply more time and money. With these, they were certain that their idea would catch on and QuickMedx would become the McDonald’s of simple health-care services. However, in order to obtain both time and money they needed growth. The question before them was, “How should we grow?”
· To offer a fast, convenient, and reliable service by which individuals could come in and order from a defined set of medical tests, each administered by a certified medical professional. · To find out the target market for the company. · To find out the diagnostic tests company is going to offer. · Processing of patients’ records and reduction in waiting time of the customers visiting the kiosk · To locate facility centers in high-traffic retail shopping environments close to pharmacies. · Setting a strict set of guidelines for its NPs. · Problems in dealing with self-insured corporations. · One of the biggest challenges that the company faced was in attracting and retaining NPs. · The company would face the challenge of growth due to less number of tests the company was offering. · To protect itself from liability of lawsuits.
The company tried to build a model which was a delivery system that would compete on a purely retail level and be able to profit on a copayment-type basis. Ultimately, it evolved into creating a retail-type health-care system. The one-stop shopping concept was a key factor. The business model was primarily focused on customers. The screening of patients was critical to the process. Reduction in Customer queuing and turnaround time was a key factor in designing the business model. The idea was to make the service strictly a retail purchase. The kiosk itself was simply a portable private exam room to which was simply added a front counter. The kiosk was to be staffed with an NP licensed in diagnostic procedures and medical prescription practices. This professional was to see every patient who visited the facility. The idea was that patients could simply walk up to the kiosk with no appointment, be tested, and within minutes receive the diagnostic results and, if warranted, obtain a prescription. If the test results were negative, the patient would receive recommendations for symptomatic care and, when appropriate, suggestions for a more comprehensive evaluation, including a referral. The broad criteria for determining which tests the company would offer were that they be rapid, be black-and-white conclusive, and be CLIA waived. There were Guidelines for its NPs which included the types of conditions that they could treat, when they could prescribe antibiotics, and when they needed to refer patients to alternative care centers. Patients who presented serious conditions were referred to local doctors, urgent-care centers, or even hospitals. The company did not want to have to educate every 15th patient as to how to fill out a claim. It wanted to be “cash and carry,” but it also knew that it needed patient volume. As a response, QuickMedx looked at the possibility of partnering with an insurer in the metropolitan Minneapolis marketplace. The company also paid close attention to the copayment level set by insurers so that QuickMedx remained competitive with expected out-of-pocket expenses. The biggest issue for the company was its ability to hire NPs and to maintain them given our limited scope. NPs feel like they have tested and qualified for much more than that. Problems of growth and expansion have occurred in the past with these sorts of ventures is that they started adding way too much way too quickly.
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Solutions based on the root cause to solve the problems:- In order to reduce the waiting time of customers in the kiosk, the company can start booking slots in advance. Any customer that arrives as per scheduled slot will not be required to wait. The company should increase number of diagnosis machines in each kiosk and NPs. Along with the target market identified, the company should collaborate with various companies to render diagnostic services to their employees. The company should change the terms and conditions with the insurance company in terms of whole expenses of diagnosis of customers to be borne by insurance company and it should be directly credited to the company’s account. The total cost of test i.e. 35 bucks should be prepaid by insurance company in advance. The company should also enter into franchise business in order to grow and expand in different parts of the country and abroad. Franchise system will also help the company to raise funding from the market easily. In my opinion, the company should not induce complicated tests in its portfolio of products as it can pose lawsuits liability, however they should widen geographically and open more and more kiosks. The company can also introduce to provide generic medicines at its kiosk in order to increase the revenue of the company. In order to retain NPs, the company should enter into contract with health care centers, where they can satisfactorily use the skills for which they have trained for. In this way, risk of losing of competency of NPs from NPs point of view can be eliminated and they will work happily in the organisation.
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