Timing Is Everything: ZocDoc to Go National as Obamacare Rolls Out
Obamacare promises to bring some 48 million uninsured Americans into the health care system for the first time. However, that scenario could bring about at least one unintended consequence for patients: a massive shortage of doctors across the country.
The timing, at least for one startup, couldn't be better.
ZocDoc, a New York City-based startup that allows people to schedule doctor appointments online, is jumping on the opportunity to position itself as the answer to this very problem. On Wednesday, the company announced its grand plan to expand to every state in the contiguous U.S. by the end of 2014. With a footprint in just 40 percent of the country today, it's a massive undertaking for the 500-employee company. But if the move is successful, it could have a huge impact on the health care industry.
"It's definitely ambitious, but it's such an interesting time with the Affordable Care Act (ACA) coming about," says Cyrus Massoumi, CEO and co-founder of ZocDoc. "We believe we can create a supply in the health system."
According to Massoumi, 10 to 20 percent of people cancel doctor appointments at the last minute, freeing up availability at a moment's notice. Massoumi calls this the "hidden supply." When doctors are on ZocDoc's platform, they can immediately list that new availability, and potentially, book a new patient instantly. That's one reason why the average patient can book an appointment on ZocDoc within 24 to 72 hours, compared to the national average wait time in the U.S., which a recent survey found to be more like 18.5 days.
"The way we see it, the need for ZocDoc is only growing, and we've proven the thesis works all over the country," says Massoumi. "We're filling the gap."
Filling that gap, it turns out, is a lucrative endeavor. ZocDoc gets paid a flat fee of $3,000 per doctor per year, so this national expansion will also be a major revenue source for the company. So far, Massoumi says, there has been plenty of demand. "We have people coming to our site from all over the country in places we haven't launched yet," he says. "It's data driven. The fact is, the ACA has just come about and accelerated our timeline."
According to Massoumi, though, ZocDoc's sales team will not simply be aggressively recruiting every doctor and hospital they can. Instead, the sales process will be heavily influenced by ZocDoc's data and its insights into what types of coverage people in a specific region require. "In the early days, I was just throwing Hail Marys trying to get anyone to sign up," recalls Massoumi. "I wasn't thinking, 'We need a Guardian dentist in 10021, who's open on Saturdays.' That wasn't part of the evaluation, but it's absolutely how we do it now."
As part of this expansion, ZocDoc will also be hiring hundreds of new employees this year. Considering the company's intense hiring process, that could be tough to scale. Massoumi says he's found that a critical hiring strategy is subjecting new hires to a role-playing scenario, in which someone applying for an enterprise-sales role, for instance, might have to pitch ZocDoc to another employee acting as a member of a hospital system. "Rather than asking someone a litany of questions, we give them a task that emulates what they'll do on the job," he says. "That way you're hiring for intrinsics, not just experience."
If ZocDoc can pull off this expansion successfully, it will not only be a massive win for health care providers and their patients, it will also serve as a model for managing fast growth.