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Future Subscription Economy Trends: Telemedicine

Translated excerpts from an interview with Frank Föge, Country Manager Germany & Austria at Zuora in Med Engineering. MED: In the 2020 edition of your Subscription Economy Index (SEI) you showed that companies that rely on a subscription model clearly outperform their product-based competition. Why is it that customers prefer usership to ownership? Frank Föge: The fulfillment of customer needs is based on usage. Historically usage has been associated with owning goods, but digitization has rendered ownership unimportant. An example: in the past, if I had wanted to watch a certain film at any time, I had no choice but to buy the DVD. But even if you watch your favorite film several times, it is no longer worthwhile to fill the shelf with DVDs or Blu-rays when you can now find that same film available at any time, in the best possible quality, via streaming. MED: What are the clear advantages of the subscription model and what are the disadvantages of the one-time product? Frank Föge: The main advantage that the customer has with a subscription model is, of course, the high degree of flexibility. When we look at the mobility sector, in most cases the user just wants to get from A to B as comfortably as possible. If modern concepts — such as ride sharing — meet this need as comfortably as having your own car, the switch is easy. In contrast, owning a car has many disadvantages: taxes, insurance, registration, maintenance, repairs — these are all points that are not only associated with costs, but also involve effort. The automotive industry has made a lot of progress in the journey to usership in recent years, with practically all major manufacturers now offering innovative mobility solutions, including car subscriptions. In addition to a high degree of flexibility, another big advantage of subscription models is that the large capital commitment associated with the purchase of a product can be avoided. Without large CAPEX expenses, companies are more flexible in terms of their financial framework.

The main advantage that the customer has with a subscription model is the high degree of flexibility.

Frank Föge, Country Manager Germany & Austria, Zuora

MED: Let’s look specifically at subscription models within the health sector. What’s happening with telemedicine and the subscription model? Frank Föge: Telemedicine and especially the introduction of digital patient files is currently a hotly debated topic. But digitization in the health sector has been going on for much longer. Software in medical practices for practice management and billing is already often based on a SaaS (Software-as-a-Service) model. And video health consultations are now out of the experimental stage and have been fully established as a viable model for providing care. New business models are extremely successful in this. Doctolib, which was founded in 2013 and won the German Medical Award 2020 in the Medical Digital category last November, is now one of the leading e-health companies in Europe. With the help of an intelligent software solution, the company supports doctors and clinics in working together in a more productive and resource-efficient way. Via an online portal and an app, patients can arrange and manage both on-site appointments and free video consultation hours with a healthcare professional of their choice.

The Subscription Economy does not just mean the replacement of a purchased device with a rented one.

Frank Föge, Country Manager Germany & Austria, Zuora

MED: To take this a step further, what does the future of med tech look like? Will the subscription model be limited to healthcare software services or can we expect other services, like rentals for medical technology devices. Frank Föge: The Subscription Economy does not just mean the replacement of a purchased device with a rented one. Many new business models are based, for example, on the use of additional digital services. A prime example from medical technology is Siemens Healthineers, which offers technologies and services in the areas of diagnostic and therapeutic imaging, laboratory diagnostics, and molecular medicine, as well as digital health and business services. Thanks to digitization, the company was able to introduce new digital health offers that enable healthcare providers to digitally transform. These include the digital health platform teamplay, the AI-supported, cloud-based image interpretation tool AI-Rad Companion and AI-Pathway Companion — an AI-based software, that facilitates personalized and standardized diagnosis and treatment decisions. Siemens Healthineers uses a subscription model to ensure regular customer contact and to provide customers with continuous updates and improvements. The approach of billing customers on the basis of productivity increases and quality improvements is also interesting. This is a classic win-win situation. And it’s only really possible with subscriptions. The interview was conducted by Marc-Benjamin Aurin.

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