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Telehealth Is a Reflection of the Empowered Consumer
Health, Retail

We think about the future of retail in three buckets: online retail, automated retail, and empathic retail. Telehealth, the process of visiting a doctor virtually to get medical treatment, including prescription medicine, combines all three. It also includes a fourth emerging element that few other opportunities capture so well: the empowered consumer.

The Empowered Consumer

The country is undergoing a massive shift in consumer sentiment that doesn’t seem to be fully appreciated — the desire of consumers to have more freedom over what products and substances they choose to consume.

The push to legalize marijuana is emblematic of the empowered consumer. States are rapidly legalizing the drug, reflecting growing public desire for access to recreational pot.

While some proponents see marijuana as harmless, it’s ignorant to think that consuming any drug comes without potential side effects. There are consequences to excess continued consumption of marijuana just as there are to alcohol. Consumers know this innately, or have stories about friends that confirm it, but they want the freedom to use marijuana if they so choose because they’re willing to accept the risks.

Similarly, telehealth services like Hims and Roman have made it easier for men to get erectile dysfunction and hair loss drugs. Again, there are risks to using these drugs, which are outlined by those companies during the treatment process, but consumers want the freedom to take Viagra if they want, even if it may not be absolutely necessary.

It would be surprising if we didn’t see other classes of drugs become more easily accessible in the near term. Late last year, President Trump signed into law the Special Registration for Telemedicine Act of 2018, which set a deadline for Congress to outline a special registration process for telehealth providers to prescribe controlled substances. The bill may pave the way for easier access to drugs like Ambien, Adderall, or Modafinil.

Ethics and the Empowered Consumer

The empowered consumer is a good thing. As investors, we think consumers should have the right to determine what they want to put in their bodies as long as two criteria are met:

  1. The consumer understands the risks of using the product
  2. The product does not have high potential to cause net harm to society

The burden of the first criterion falls on both the telehealth provider and the consumer. As a matter of principle, any telehealth provider should go above and beyond to make sure patients understand the risks of any product they consume. Risks should be presented in simple language with references to studies where patients can learn more.

For empowered consumers, the power of more choice must come with the responsibility of better understanding. Consumers must also take more responsibility for understanding the risks of their actions, particularly when using products for voluntary reasons. This second element of the first criterion will likely prove more difficult than the first because humans seem designed to seek pleasure for the present self at the expense of the future self. We want quick solutions, and all too often choose to ignore risks of products we consume just as we sign terms of service contracts without reading them. At best, perhaps we can turn peer pressure historically leveraged to get people to try drugs to get them to understand their risks.

For the second criterion, many cases will be easy. ED and hair loss drugs seem to have minimal potential risk to society at large, but most people would probably agree that easier access to opioids would be a net negative to society.

Beyond easy cases, determining whether a product has the potential to cause net harm to society is likely to be subjective. Alcohol is probably a net negative to society in aggregate; however, prohibition taught us that the desire for freedom of choice, particularly when action becomes restricted where it once was free, is a persistent human desire that can cause us to look the other way. As investors, we won’t look the other way, even though it’s likely that some large markets will emerge where consumer desire for freedom outweighs the net-negative potential impact of a drug to society.

Putting it all Together

Telehealth offers a superior experience for the empowered consumer to get a range of medical advice and prescriptions by combining eCommerce, automation, and empathy: eCommerce allows for an easy, low-cost way to subscribe to medicine delivered to your door, automation enables scaling of doctor capacity (e.g. bot-driven intake forms), and empathy is the human connection with the doctor offering treatment and helping the patient understand risks.

Telehealth companies that go above and beyond in embracing their ethical responsibilities will be best positioned as trusted sources for empowered consumers to access more restricted products with greater freedom.

Disclaimer: We actively write about the themes in which we invest or may invest: virtual reality, augmented reality, artificial intelligence, and robotics. From time to time, we may write about companies that are in our portfolio. As managers of the portfolio, we may earn carried interest, management fees or other compensation from such portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making any investment decisions and provided solely for informational purposes. We hold no obligation to update any of our projections and the content on this site should not be relied upon. We express no warranties about any estimates or opinions we make.

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