What Is the Business Model of Telehealth Apps? – Understand the Secret Economics

5 min read

It’s been a busy week. I have had long discussions with 4 entrepreneurs this week so far. We discussed telehealth app ideas. However, I noticed that they had different doubts about the business model of telehealth apps as all of them have asked me different questions. 

In this blog, I will make my answers to those of my 4 new business friends available publicly. 

So, let’s start with the questions of my first friend. 

Question 1: What is the difference between a business model and monetization model? 

These are the two terms most entrepreneurs are confused at. So, I explained to him in the most straightforward way. 

A monetization model is called a revenue model that describes the ways a business can earn money. But a business model is the broad term that describes the ideal structure of the business which supports and promotes the revenue model. 

Question 2: What is the required capital cost and operating cost? 

I kept it on his shoulder to calculate the capital and operating costs for his telehealth app. But I guided him comprehensively. I will do the same here for you as well. 

What is the capital cost? 

The money you require to turn your app idea into a working telehealth app is considered as the capital cost, but it isn’t limited to only app development cost. 

Capital cost (with reference to telehealth app) generally includes app development cost,  consulting cost, company registration cost, app marketing cost, users & doctors onboarding costs, initial workforce hiring cost.  

The best thing about capital cost is that you can estimate it almost accurately. 

(After a quick calculation, he told me that his capital cost would be as low as $35,000.) 

Here, I would like to mention that capital cost highly depends on your app type, location, and your business goals. Thus, it won’t be the same in your case. 

What is the operating cost? 

As the name suggests, the operating cost is nothing but the expenses related to the operation of telehealth apps. It includes app maintenance cost, customer service cost, ongoing users and doctors onboarding costs, ongoing marketing costs, and recruitment & staff management costs. 

Operating cost has a unique characteristic – It increases with business growth. 

(This time, he took more time to calculate his operating cost. It was as low as $10,000 a month. Suddenly, he smiled over the thought that with $30,000 of revenue in the month and $10,000 of operating cost, his monthly net profit would be $20,000.) 

Soon, I gave him one more reason to turn a smile into a grin! With $35,000 as the capital cost and $20,000 as a profit in a month, it would take him less than 2 months to reach the break-even point

If you can’t comprehend this, let me simplify it with an example. 

  • $100 required to start telehealth business (capital cost)
  • $50 is the monthly operating cost 
  • $100 is the monthly revenue 
  • $50 ($100 revenue – $50 operating cost) is the net monthly profit 
  • 2 months ($50 + $50) to reach capital cost (break-even time) 

Like you, my first friend was happy to know how quickly you can break even with the telehealth app! 

The second friend had only one question, but a very significant one. 

Question 3: How does a telehealth app like Maple make money? 

Basically, he was trying to ask the business model of Maple or its revenue streams. 

Maple targets specific user groups with dedicated app features and pricing models to generate multiple revenue streams. 

The following are their most targeted user groups. 

  • Casual weekdays users 

From users who occasionally use Maple app on weekdays and between 7 AM to midnight, Maple charges $49 per visit. 

  • Casual weekends users 

From users who occasionally use Maple app on weekends and between 7 AM to midnight, Maple charges $79 per visit. 

  • Casual night users 

From the users who occasionally use the Maple app between midnight and 7 AM, Maple charges $99 per visit. 

  • Regular users 

Maple lets users buy personal membership worth $30 a month for up to 30 visits per year. 

  • Regular users and their family members 

Maple lets users buy family membership worth $50 a month for up to 50 visits per year. 

  • Premium users 

The Maple app is equipped with eWallet in which users can add credit. The credit packages include Starter worth $100, Extended worth $200 and Year-Around worth $500. On the Starter package, users can get a 5% discount, 10% on Extended and 20% on Year-Around. 

  • Corporate Users 

Maple ties up with SMEs and large corporations to offer telehealth services to their employees. 

The second friend finally understood why a startup must identify the user group to earn more! 

Unlike the first two, the third friend had a complicated question. 

Question 4: Do Canadians have to pay for telehealth? 

Generally, the healthcare service cost of a Canadian is widely covered by provincial health plans. Meaning, if a user belongs to the province like Ontario and British Columbia where the telehealth is covered by the health plan, the app should not charge him. 

However, in the province where the health plan covers telehealth, not all the health condition treatments are covered in it. 

Like that friend, you must now have a question – how a telehealth app earns money if the user is eligible for free telehealth service

The answer is very simple. If a physician treats a patient using a telehealth app in the province – Ontario –  where telehealth is covered by the health plan, the government pays a visit fee to the physician and not the patient. 

But to get the visit fee, the physician should claim the visit fee using the OHIP billing code. Each fee code corresponds to a specific dollar amount. 

My third friend clearly understood why it is important to develop a customized telehealth app. After all, all provinces have different health plans & other regulations and a single app does not fit everywhere. 

The fourth friend asked me a very broad question.  And I answered him in a broader way! 

Question 5: What is the business model of telehealth apps? 

That’s all for this blog.  The only reason I made these answers available publicly is to help other entrepreneurs who have doubts about the telehealth app business model. 

Apart from business model crafting, there are many other areas where we are helping the Canadian startup community as well as healthcare entities.

Our recent telehealth app development project featured in Collision Conference

Like all of these entrepreneurs, if you have any questions, I would be happy to answer and make it available publicly only if you permit so that we can help the startup community. You can contact me by filling the following form and calling me directly on +1 905 635 7574.

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