This well researched and very long article appeared last week:
19 January 2024
Reconciling the parallel worlds of healthcare and Eucalyptus
It’s easy to hate the fast-growing health marketing platform Eucalyptus (Pilot, Juniper and other brands).
If you ever met the founders you’d likely find it even easier. They are to healthcare what Mark Zuckerberg, Sergey Brin, Larry Page and Elon Musk have been to the internet and social media.
All of these guys (all white blokes, just saying) talked a big game at the start of their ventures about stuff like creating community, empowering people, bringing people together and connecting the world.
Those promises turned out to be one of the all time great bait-and-switches for our data and money.
Really, it was always about power and money.
The folks from Eucalyptus love to paint themselves as creative young good guys breaking down the conservative barriers created by generations of tradition in medicine with innovation and creative, modern and emapathetic thinking.
Eucalyptus promises to democratise health by using technology to make it accessible to the masses. “We deliver healthcare that puts patients first,” their actual website copy says. “As a global telehealth provider, we’re building a safe, effective and accessible future for medicine.”
None of this real:
- Their flagship product costs over $400 per month, which sort of kills the accessibility line quite a bit from the get go. They’ll tell you it’s too hard to see a GP and that they are overcoming that issue as well – hmmm … mixed billing is becoming a new obstacle but I’ve yet to see a GP adding $400 to their consult, or a patient who would pay $400 up front to see one, so that line is rubbish as well.
- They aren’t providing care, they are selling product en masse and doing just enough checking around the process of supply (medical oversight) to not kill anyone – something that could easily happen operating at such high throughput if you aren’t careful enough.
- Their innovation and modern thinking is actually just repurposing some now long established tech platform and marketing principles and strategy – Amazon, Google, Apple, Uber and so on led the way – to the low-hanging patient fruit in health.
So they’re not the smart, innovative, likeable folk they like to present themselves as.
But here’s the thing. Like the big global tech platform plays, these new emerging health platform marketing plays are never going away.
They’re just going to get a lot bigger from here.
Fast, telehealth-driven, single-indication medicine and health provision has hardly even started in Australia.
Amazon isn’t really here in health yet but it is prepping in earnest and Wesfarmers, Woolworths et al. only have their toe in the water so far.
With the data these groups have on everyone, and some of the upstream companies they’ve already acquired (a giant pharmacy wholesaler in the case of Wesfarmers) what Eucalyptus is doing so far might turn out to be pretty tame.
The other reason we now know these new platform plays aren’t going anywhere is that a reasonably large demographic of patients – cashed up, young, often not a regular GP-goer –love the convenience and the impersonal nature of these platform services.
How do GPs compete with these monsters?
They don’t because they can’t.
GPs don’t do what these platforms do. If they started to the healthcare system would be in a lot of trouble. Neither would the majority of GPs or GP practices want to even try, because that’s not what they signed up for when they decided to do medicine.
In addition, at this stage of the development of these companies, investors are happy to lose a lot of money to build a market. You can’t beat someone who can afford to operate at a loss for a few years.
This isn’t to say GPs or the government should just ignore these new companies.
If GP practices keep doing what they’ve always been doing, these new providers will skim patients and margin, and since even a good practice runs on reasonably slim margins (5% is a figure bandied around by the analysts), and taking into account all the other emerging cost and operational issues GP practices are currently facing, this might just be that straw on a certain camel’s back.
Dr Max Mollekopf is an interesting, creative and outspoken GP and practice owner who is all over this dynamic and has a pretty good line on how owners can approach this emerging problem.
He has accepted that you can’t beat them and you wouldn’t want to even try, so you need to work harder on what you have in your business model that these new platforms don’t have.
It’s marketing 101 and it turns out that GPs have a pretty unique value proposition that, with not too much tweaking, might create a surprisingly brighter future than many people are forecasting.
“As a GP running a small community practice I’m not worried about Amazon or Wesfarmers Health coming into the primary care space,” Mollekopf says on a recent Linked In post on the subject.
Pointing to the ad below for providers now owned by Amazon in the US, Mollekopf points out that quality and longitudinal care is just not a part of their offering.
“In my world I service consumers who value quality. I see patients who want someone who knows them, knows their family and provides more than a prescriber number for hire. I’m always working to enhance my technology stack so I can move with my younger patients but that’s all about being a modern version of general practice. There will always be patients in our community who value community-driven quality care and that’s where GPs like myself and my colleagues should be continuing to focus their energy.”If you were to go to see Dr Max and get Ozempic off label to help you lose weight, it would cost you about $190 a month (including drug and a mixed billing fee), not $400, and you’d have all that actual love and caring and long-term security about your overall health to go with it – which is Dr Max’s competitive advantage against Eucalyptus in a nutshell.
If you stayed with Dr Max for 20 years, your saving would be in the realms of $40,000 to $50,000 just on the weight loss part of the relationship.
As with Uber and AI, there aren’t enough guardrails in place to manage these fast-growing tech behemoths.
For starters, they exist outside what was once the system – Medicare – so they can do a lot of things that wouldn’t normally be acceptable.
For example, buying semaglutide sodium in bulk from a supplier you aren’t prepared to name, to compound an Ozempic substitute that is unregulated and untested by anyone that the government recognises as qualified for the job, to sell to your customers while you can’t get the good stuff (Ozempic, which has been rigorously tested for safety through the FDA and TGA).
It says a lot about how these companies view the traditional health system regulators like the TGA, DoHAC, AHPRA and the Medical Board of Australia.
Semaglutide sodium, the raw material for what Eucalyptus is using as a replacement product, seems to have red flags all over it from a safety risk and therefore brand reputation perspective:
- It doesn’t meet standards for compounding law in the US, according to the Federal Drug Administration, which wrote to compounding pharmacy associations saying: “We are not aware of any basis for compounding a drug using these semaglutide salts that would meet federal law requirements” and has issued adverse drug reaction alerts around its use already
- The TGA has similar concerns and issued its own warning in December that compounded semaglutide-like products were “unapproved” therapeutic goods that had not been evaluated for safety, quality and efficacy and should be only “reserved for exceptional clinical circumstances”
- No one creating the substitution is prepared to name the manufacturers of the semaglutide sodium, almost certainly because those suppliers are in India or China. These two countries supply the majority of raw materials for most pharmaceutical manufacturers around the world, but that particular supply chain is very tightly regulated, governed and monitored for safety. This supply of raw material is being kept deliberately opaque by Eucalyptus and the compounders, which creates a very obvious safety issue.
Why is Eucalyptus taking what looks like such a big potential risk to its brand and reputation?
Money mostly (what else?).
At the more than $400 per month they are charging their customers, if they lose anyone they’ve spent good money acquiring in the last year or so, they might be losing up to $100,000 per customer over that customer’s life – maybe even more.
Vastly more here:
The full article is well worth a read – it takes a while – and I will leave it to you to form you own view of the people behind all this.
This mob certainly did not go to the same medical ethics courses that I enjoyed as a beginning doc and I am sure what they practice is not a form of medicine I recognise or would want ever to be associated with.
David.
1 comment:
IMHO, this says it all "They aren’t providing care, they are selling product en masse"
eHealth is dominated by solutionists making unjustified claims and flogging their technology.
Science, engineering and technology research to improve healthcare (better tests, better treatment etc) is where the focus should be. Just ask Richard Scolyer and Georgina Long if they are doing eHealth. And I doubt they have spent over $2 billion doing what they have done.
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