December 14, 2016

Zocdoc CEO: Uncertainty as a Strategic Advantage in 2017

Over the past several weeks, I have spoken with dozens of health system executives, tech entrepreneurs, investors, and government officials, and there is little surprise that the election results have amplified uncertainty in many parts of the healthcare industry. Questions about what path the new administration may take have spurred reactions ranging from proactive to counterproductive. My take?

Regardless of the political climate, health systems are best served by treating patients like consumers and investing in scalable technologies that improve access, and drive satisfaction, loyalty and growth.

While there is still a lot to be revealed in the weeks and months ahead, the end of the year presents a natural time to reflect on what we have accomplished in 2016 and how players in the healthcare industry can thrive amid uncertainty in 2017.


Following several years of industry consolidation, analysts estimate that up to two-thirds of physicians will be employed by a medical or hospital group at the end of this year. Our growing partnerships with these health systems, which are caring for more Americans than ever before, will enable us to realize our mission – to give power to the patient – even faster.

In 2012, we had only five health systems clients. Today, we are proud to work with nearly 70 systems across the country. In 2016, we have formed new partnerships with world-class systems and regional leaders alike, and we continued to deepen our engagement with existing partners. Between new and existing clients, our average client contracts increased 250% this year over last. My favorite part of these growing partnerships is the chance to spend time with our clients to better understand how we can apply our consumer-focused technology to improve their patients’ experience and solve their most critical business needs.  


In my recent conversations, three themes have emerged as strategies to successfully manage through this period of uncertainty. These have resonated with the executives I have spoken with, and I want to share them here for others to consider:

1. Build for consumers who will have more risk and more choice.

With the coming changes in insurance, it is likely that risk will continue to shift to the individual as they will be increasingly responsible for navigating a costly and complex healthcare system. When patients are exposed to more out-of-pocket costs, consumer choice will play an even larger role. We should expect more competition for commercially-insured patients, which means health systems will need to win the attention and loyalty of these consumers again and again.

How can health systems differentiate themselves in a more competitive landscape? Empower patients with better tools and resources so they can make informed decisions – and position yourself to be one of their options when they’re ready to decide. Treat patients as the savvy, smart and selective consumers they are and position your organization as a partner in the decision-making process, as well as in their care delivery.  

2. Do more with more.

For years, health systems have focused on acquiring providers, building new facilities, and launching retail health solutions to grow their patient populations. These networks will continue to be relevant, but carry large, fixed costs – facilities and doctors are expensive whether they are in use or not.

Based on Zocdoc’s data, provider networks are typically only at 60% of appointment “fill rate”. That other 40% of unused capacity – doctors with last-minute availability because of no-shows and cancellations – accounts for millions or even billions of dollars in lost revenue annually. Patients lose out too. Some systems have attempted to fix this access problem by creating special rules around available appointments for different patient types, but this tends to make the problem worse.

Marketplace peers in other industries (e.g., OpenTable, Kayak, Uber) have helped solve this problem of book rate versus fill rate. A five-star restaurant doesn’t block tables for different types of diners in order to fill their seats; instead, they put their open seats on a platform like OpenTable and surface it to the people who are looking for it. In healthcare, the Zocdoc platform uncovers real-time availability and surfaces it to millions of patients seeking care. This improves access for patients (the typical appointment on Zocdoc happens within 24 hours vs. a national wait time average of 18.5 days) and more efficiently fills provider schedules, boosting throughput. In any future scenario, doctor utilization and patient retention will remain critically important for a system’s bottom line, and tools that provide insights and optimize capacity across the network can turn waste into inventory and leakage into loyalty.

3. Use uncertainty as a strategic advantage.

Lastly, I believe that health systems can improve their competitive advantage by increasing their focus on innovation. In an uncertain environment, the weak-hearted are likely to sideline themselves, while those with the courage to lead will come out ahead.

I can speak from experience about the benefits of uncertainty. I founded Zocdoc just as the 2008 financial crisis was playing out. Many advisors encouraged us to wait for a better time, and naysayers told us we would inevitably fail. But we discovered that the uncertain climate became a significant advantage. While would-be competitors faded away before they even got started, we stayed the course. That resulted in a head start that is still paying dividends today.

The lesson? Do not be deterred or steered off course by unknowns. Choose initiatives that deliver value no matter what path the incoming administration takes. Accelerate investments to gain market share from nervous competitors that will pull back. Although it may be counterintuitive, a time of change can be a strategic opportunity to double down.


Zocdoc’s health systems business doubled in 2014 and again in 2015, and we have further accelerated our enterprise growth in 2016. This year, we also made operational and technology improvements that will allow us to build, ship and share new products with partners faster and at scale.

● We added new leaders in product and engineering that bring consumer technology experience from Amazon and PayPal;

● We are making significant new investments in R&D around access, care coordination, registration and revenue cycle management;

● We improved our infrastructure to support patient traffic up to 10x our current size, preparing for the continued growth and patient demand we anticipate in the years ahead;

● We announced a new EHR integration with Epic, and bolstered our integrations with hundreds of EHR and PMS platforms for more seamless interoperability; and

● Even as our average client size has more than doubled, our time to onboard a new client has decreased; we can implement a client at-scale in just weeks, not months or years.

Our partnerships with the most innovative health systems will create unparalleled access, remove barriers on the road to good health, and empower patients like never before. I am proud that we are building a better healthcare experience, together, for millions of patients.


By Oliver Kharraz, MD

Zocdoc CEO & Founder