Included Health: A Vision for Integrated Care in America Custom Case Solution & Analysis

1. Evidence Brief: Case Extraction

Source: Included Health: A Vision for Integrated Care in America (HBS Case E847)

Financial Metrics

• Market Reach: The combined entity services over 100 million lives across the United States through various employer and health plan partnerships (Exhibit 1).
• Customer Base: Approximately 35 percent of Fortune 500 companies utilize the platform for navigation or virtual care services (Paragraph 4).
• Funding: Prior to the merger, Grand Rounds and Doctor On Demand raised over 500 million dollars in cumulative venture capital (Paragraph 12).
• Revenue Model: Primary income derives from Per Employee Per Month fees paid by self-insured employers and fee-for-service payments for virtual clinical visits (Paragraph 15).

Operational Facts

• Merger Origin: Formed in May 2021 through the combination of Grand Rounds (navigation and expert medical opinion) and Doctor On Demand (virtual primary care and behavioral health) (Paragraph 1).
• Service Portfolio: Offers a unified platform for virtual primary care, specialty care, behavioral health, and navigation services, including specific care for LGBTQ+ individuals via the acquisition of the original Included Health brand (Paragraph 8).
• Clinical Network: Employs a dedicated practice group of physicians rather than relying solely on independent contractors to ensure quality consistency (Paragraph 22).
• Technology Stack: Currently migrating from two distinct legacy platforms into a single integrated member application designed for longitudinal care management (Paragraph 25).

Stakeholder Positions

• Owen Tripp (CEO): Asserts that the fragmented healthcare system requires a single point of entry to improve outcomes and reduce employer costs (Paragraph 3).
• Dr. Ian Tong (Chief Medical Officer): Emphasizes that virtual care must move beyond episodic urgent care to continuous, relationship-based primary care (Paragraph 23).
• Self-Insured Employers: Seek to consolidate multiple point solutions (behavioral health, navigation, telemedicine) into one contract to reduce administrative complexity (Paragraph 14).
• Traditional Payers (Insurers): View the company as both a partner (providing virtual networks) and a competitor (capturing the primary care relationship) (Paragraph 28).

Information Gaps

• Specific Unit Economics: The case does not provide the exact customer acquisition cost or the lifetime value of a member in the integrated model.
• Internal Churn Rates: Data regarding member retention post-merger during the app transition is not specified.
• Competitor Margin Comparison: Direct financial comparisons with publicly traded rivals like Teladoc Health or Accolade are absent.

2. Strategic Analysis

Core Strategic Question

• Can Included Health successfully transition from a collection of disparate healthcare services into a unified virtual-first healthcare system that demonstrably lowers the total cost of care for employers?

Structural Analysis

Value Chain Analysis: The company is performing a vertical integration of the healthcare experience. By combining navigation (identifying high-quality providers) with delivery (virtual primary care), they eliminate the hand-off friction that typically leads to member leakage and higher costs. The primary value driver is the ability to steer patients toward high-value interventions before they escalate to expensive emergency or inpatient settings.

Competitive Rivalry: The industry is shifting from point solutions to platform plays. Competitors like Teladoc (via Livongo) and Accolade (via 2nd.MD) have pursued similar mergers. Included Health differentiates itself through its focus on underserved populations (LGBTQ+) and its employed physician model, which provides tighter control over clinical protocols than contractor-based models.

Strategic Options

Option 1: The Unified Platform Aggregator. Focus exclusively on the all-in-one app experience for Fortune 500 employers. This requires aggressive decommissioning of legacy systems to create a seamless user interface.
Trade-offs: High short-term engineering costs and risk of alienating users comfortable with legacy interfaces.
Resource Requirements: Significant investment in product design and data science.

Option 2: Specialty Care Vertical Leadership. Double down on specialized navigation for high-cost, high-complexity segments such as oncology, behavioral health, and LGBTQ+ care.
Trade-offs: Risks becoming a niche provider rather than a broad healthcare entry point.
Resource Requirements: Recruitment of high-cost medical specialists and specialized care coordinators.

Option 3: Hybrid Care Integration. Form deep partnerships or joint ventures with physical brick-and-mortar clinics to provide a true omnichannel experience.
Trade-offs: Increases operational complexity and requires managing physical asset partnerships.
Resource Requirements: Business development teams focused on regional health system negotiations.

Preliminary Recommendation

Included Health should pursue Option 1. The primary pain point for their core customer (the HR benefit manager) is point solution fatigue. By delivering a single, cohesive entry point that handles everything from a sinus infection to a complex cancer diagnosis, the company secures its position as the essential healthcare operating system for the employer. This path maximizes the data advantages gained from the merger and creates the highest barrier to entry for competitors.

3. Implementation Roadmap

Critical Path

• Phase 1 (Days 1-90): Data Unification. Map clinical data structures from Doctor On Demand and Grand Rounds into a centralized data warehouse. This is the prerequisite for personalized member steering.
• Phase 2 (Days 91-180): Unified Member Experience Launch. Deploy the single-app interface to a pilot group of 5-10 large employers. Success is measured by the percentage of members who engage with both navigation and virtual care.
• Phase 3 (Days 181-365): Full Migration and Decommissioning. Transition the remaining 100 million lives to the new platform and shut down legacy infrastructure to capture operational efficiencies.

Key Constraints

• Data Interoperability: Healthcare data is notoriously siloed. The ability to pull in external claims data from insurers is the primary technical bottleneck.
• Clinical Capacity: As the company scales from episodic care to longitudinal management, the employed physician model faces recruitment pressures. Maintaining a 24/7 virtual clinic while expanding specialty services is an operational strain.

Risk-Adjusted Implementation Strategy

To mitigate the risk of technical failure during the app migration, the company must maintain a dual-backend architecture for the first 12 months. This allows for immediate failover if the integrated app experiences downtime. Furthermore, the implementation must include a dedicated change management workstream for employer HR teams, providing them with communication toolkits to explain the transition to their employees. This reduces the risk of low adoption due to user confusion.

4. Executive Review and BLUF

BLUF

Included Health must prioritize the full integration of its navigation and delivery platforms to remain competitive. The current healthcare landscape is shifting rapidly toward platform consolidation. The company has a unique advantage through its employed physician model and specialized care for underserved groups. To win, it must prove to employers that its integrated model reduces the total cost of care more effectively than a collection of individual vendors. The primary objective is to become the default healthcare starting point for its 100 million covered lives. Execution must focus on data unification and user experience to prevent member attrition during the transition. Success hinges on moving from a vendor relationship to an essential infrastructure partner for large enterprises.

Dangerous Assumption

The analysis assumes that members will naturally use a virtual-first app as their primary healthcare entry point. If employees continue to bypass the app and go directly to local in-network specialists without using the navigation tools, the company cannot capture the steering value that justifies its premium pricing to employers.

Unaddressed Risks

• Regulatory Volatility: Changes in state-based medical licensing or telehealth reimbursement parity could significantly increase the cost of the employed physician model (Probability: High; Consequence: Moderate).
• Payer Disintermediation: Major insurers like UnitedHealth (Optum) are building their own virtual-first plans. They may restrict the data access Included Health needs to function effectively (Probability: Moderate; Consequence: High).

Unconsidered Alternative

The team did not fully explore a white-label strategy. Instead of building the Included Health brand, the company could provide the technology and clinical backend for regional health systems or smaller insurers. This would reduce marketing costs and avoid direct competition with major payers while still achieving scale through their existing patient bases.

Verdict

APPROVED FOR LEADERSHIP REVIEW