Why Chiron Health Failed

Chiron Health will be shutting down on November 4, 2022. The Austin-based telehealth company, which has received $4.7M in funding from a multitude of investors including Plug and Play, Capital Factory, Floodgate, and Martin Ventures. Chiron was acquired by a competitor Medici in 2019 along with secure healthcare messaging company DocbookMD. Its founders said that they had hoped to continue via a sale or merger. Unfortunately, it didn’t happen.

I have personally admired Chiron since their founding in 2013. They were one of the first telemedicine software companies with the foresight to offer insurance eligibility and payer reimbursement. While the rest of the industry focused on making video calls, they realized that getting payment – the heart of any successful telemedicine effort – was king. I am sad to hear about the closing of their business. 

Both Chiron Health and VSee began as small startups and eventually grew to be frontrunners and competitors in the telehealth arena.  We wish the Chiron team all success in their next endeavor.

Why COVID Telehealth Growth Didn’t Save Chiron 

We know that the COVID pandemic pushed the entire telehealth industry forward immensely. It caused telehealth use to skyrocket and acclimated large swaths of the population to doing video visits. However, when we look at the overall healthcare value chain, it’s the service providers that take the lion’s share of the revenue. Direct-to-consumer telehealth companies like TelaDoc, AmWell, Ro, EverlyWell, One Medical, etc. were the ones that saw their revenues grow like a hockey stick. However, the actual tech stack providers like Chiron, Doxy, Zoom, VSee get a relatively small share of the overall revenue. Thus it is more difficult for telehealth tech stack companies to achieve the revenue they need to be self-sustaining.

The Viability of Telehealth Tech Stacks

Second, telehealth is much more complex than making a Zoom or MS Team call. Anyone who has tried to scale an enterprise grade telehealth service knows the numerous engineering quagmires and complicated workflow issues involved.

Building a viable telehealth tech stack that addresses all those complexities requires a massive engineering effort on the scale of fifty to a hundred engineers. Anything less than this scale of engineering would only be able to partly solve a client’s problem.

Typically what ends up happening is clients have to go to multiple vendors to “duct-tape” together a Frankenstein solution that ends up having poor usability and many interactional barriers that contribute to clinician burnout. What they would like is a truly comprehensive A to Z telehealth tech stack that can resolve all their solution needs.

This is where Chiron fell into an engineering dilemma. They did not anticipate the fast growing needs of the telehealth industry for a more comprehensive telehealth platform. So they lacked the engineers to build out their platform. This led to the downward cycle of not bringing in enough revenue to track the next level of investment, which led to not being able to hire more engineers, which led to high customer churn.

Understanding the Telehealth Adoption Cycle

Since the days my cofounder Dr. Erika Chuang and I were doing our PhDs at Stanford, we’ve observed that user experience is usually what becomes the deciding factor in the final phase of a technology adoption cycle.

In the first phase, the technology is so new that the focus is just getting it to work at all. For telehealth adoption, the first phase is simply getting patients to make a Zoom call. This is a huge behavior change, and we are still in the first phase for telehealth. 

In the second phase, the focus is on enterprise deployment where security and making IT happy is key. 

It is only in the final third phase that user experience becomes the key concern.  Note that EMR integration fits into the second wave, where user experience is given lip service, but actual decisions are made by the hospital IT staff, who aren’t using the EMRs in their day-to-day work. (Thus, it’s not surprising that clinicians are unhappy with their EMR user experience.)

A No Code, Low Code Telehealth Platform Focused on User Experience

VSee has avoided Chiron’s engineering dilemma by always being focused on this third phase of the telehealth adoption cycle: user experience. This has required us to slowly and steadily build up a strong engineering team around this vision over the past 10+ years.  We have now spent over 500 man years building our tech stack – this deep investment allows VSee’s no code, low code tech stack to offer the complete spectrum of healthcare workflows from booking appointments to claims submissions, from asynchronous telehealth to medical device integration.  We now have a team of 100+ people who love to write code and make clinicians superhuman in productivity.

How the Best Telehealth Companies Stay in the Game

We believe that telehealth is more than just video. What it really takes for a telehealth platform to stay in the game is to provide:

  1. Superior experiences to clinicians and patients, and
  2. A way for clinicians to configure their telehealth workflows without programming experience and without having to ask their IT for permission.
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