1stAvailable plans to build platform beyond online bookings
Online appointment bookings website 1stAvailable.com.au caused a bit of a stir in the industry a fortnight ago when it announced it was planning to list on the stock exchange, a bold but seemingly necessary step for a very small company looking to grow in what is still a very small sector of the industry.
However, 1stAvailable is confident that sector is about to take off, so much so that it is looking to raise $10 million to acquire three other online booking services and further invest in its own technology platform.
For managing director Klaus Bartosch, who has been here and done this before, the online market for healthcare bookings is set to change massively in the next few years, following in the footsteps of other industries such as car sales, real estate and employment classifieds.
And for Mr Bartosch, who has seen these industries take to online systems with alacrity during his time with Hostworks, which was responsible for managing the online systems for brands such as Wotif, Seek, carsales.com and realestate.com.au, the time is ripe now for the healthcare bookings market to emerge.
There is great potential for growth – as 1stAvailable details in its prospectus, Frost & Sullivan estimates only three per cent of all private practices are using online booking systems – but many see online bookings as a very small, transaction-based sector that just needs an app linked to practice management software.
Mr Bartosch does not agree. While he believes companies can make a profit from managing online bookings alone, the potential to add value to the much wider healthcare market is what is so appealing, and why he is keen to go public.
“We think the IPO will have an impact on the way that people see the marketplace,” Mr Bartosch said. “What we are building is one of the next major online portals, this time focusing on healthcare services the way that carsales.com, seek.com and realestate.com did.
“Here we are in the age of the internet – why are we using the telephone when 90 per cent of appointments can be done online? carsales.com, seek.com and realestate.com.au are just three examples – they all changed their markets. In four years we have stopped going to the local car yard, stopped reading the paper for jobs and stopped going to the agent's front window.”
He said the main reason why online appointment bookings lag the internet’s penetration of other industries can be attributed to the healthcare sector being slow to embrace changes to established processes. Healthcare consumers are often older people who are slower to adopt the internet into their daily lives, but Mr Bartosch said he believes change is now beginning to happen, estimating the sector is two years into a four-year cycle when online bookings will become the norm.
“The change is happening in the market,” he said. “A year ago, practices were telling me they were not sure when they would starting using a booking service and now they are saying they are not sure which one to use.
“It is only at three per cent now but I think it will get up to 20 per cent in the next two years. Practices will see their colleagues using it and consumers will demand it.”
To that end, he is looking to raise money to build on the company's online system but to also make some purchases. He plans to buy two of the more practice-aligned players – DocAppointments and Clinic Connect, both worth relatively small sums – but also the much larger GOBookings, which has a number of enterprise clients that can provide real value to the company.
Mr Bartosch says he is confident he'll be able to raise the capital and claims to have received a great deal of interest, but that doesn't mean it will be and has been plain sailing. He admits the company has made mistakes in the past, particularly when the site first went live and the company was quickly hoovering up dentists and other allied health practitioners.
“There is no secret that we lost most of our customers that we signed up in the first 18 months,” he said. “It wasn't that they didn't like what we were doing but we weren't giving back enough to justify the investment they were making.”
A recent SmartCompany article also details the dissatisfaction of one anonymous investor, and Pulse+IT has also heard some rumours. Mr Bartosch, however, says the platform is now stable and very few customers are leaving once they sign up.
And he has big plans for the future. “We are building a platform that we want to scale to a national platform and that's not trivial. It requires significant investment.
“We now have direct API integration with 15 major [practice management systems] rather than working as a plug-in. That has meant a longer time to be ready but it was done properly, as we don't want to concentrate on just one vertical like GPs or dentists.
“If you can't service the needs of the consumer and the provider, then you are missing a key factor. We want to have services all in one place, providing convenience for the consumer and simplicity for the practices.”
While the company initially sold itself as being able to provide the first available appointment with a doctor or allied health practitioner and it still has that capability, Mr Bartosch wants 1stAvailable to become the main site that consumers go to for all of their health needs.
“We want to ensure there is continuity of care, so we have designed the site so the names of your doctor, your dentist, your physio come up as your preferred provider on the site, and that's what we have built. It's about providing for the consumer exactly what they need to see.
“With [custom-designed] apps, you use them for a while but then you forget about them. If I go to see my GP once or twice a year, I'm not going to remember their app. All of these apps needs to be in one place, so we are building a marketplace for all of the consumer's health needs. It's about online consumer preference.”
Besides main rival and market leader HealthEngine, the majority of other players in the market tend to concentrate on the practice only, developing customised apps and, in the case of the GP market, helping practices serve existing patients rather than opening them up to new ones. This market has also seen practice management software vendors like MedicalDirector and Zedmed develop their own appointment booking systems.
Mr Bartosch doesn't see that as a big worry, however. “An analogy that is useful is the hotel reservations market,” he said. “When Expedia and Wotif came along, the major hotel reservation systems were building systems for particular hotel chains, but they soon realised they had to integrate with the new players because people don't search by hotel chain.
“For example, the Sheraton only gets about five per cent of bookings through their own website – the consumer won't got to Hilton or Sheraton; they'll go to Expedia or Wotif. With healthcare, consumers will want to go to one site for all of their healthcare needs, not individual practice sites and certainly not a site that only lists MedicalDirector users. No one knows what that is.”
If the IPO is successful, Mr Bartosch has larger plans for the future. Some are obvious, like running targeted advertising, but also exploring the potential to provide portal functionality so patients can do more through 1stAvailable to interact with their healthcare providers than simply booking an appointment.
1stAvailable has a formal relationship with the health insurer NIB to partner in its www.whitecoat.com.au allied health practice review site, which Mr Bartosch said is the only AHPRA-compliant, moderated site of its kind.
There is also great potential in the extra intellectual property that DocAppointments can bring, as well as the large clients currently using GOBookings.
He does see a time when some of the smaller players fade away or bought up and it could come down to the big two of HealthEngine and 1stAvailable that end up facing off, but a hell of a lot is riding on the outcome of the IPO.
“The bottom line is it's not just online appointments,” he said. “It is about a range of products and services we can provide to the industry. It's not true that you can't survive just on online appointments and we believe our subscription model is the right one versus pay per appointment, but with a national platform there is a lot more we can do.
“Will we offer advertising on our services in time? Absolutely, but we will do it in a way that adds value to practices and to patients.
“Another thing we have been talking about is big data and the analytics you can do. We have been storing from day one every search that has been typed in, and that means we will in time know where a new dentists should open up a practice and other insights about healthcare consumption. It is about using analytics it the right way to drive the right choices and outcomes.”
Posted in Australian eHealth