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Will telehealth retain its importance post-pandemic?

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Critical questions remain as investors pour more and more money into population health technology, say Matt Wolf, Kurt Shenk and Jessika Garis from RSM, writing exclusively for Health Tech World

 

In the wake of the massive telehealth boom of 2020, health care payers and providers as well as tech companies in this space are wondering whether this growth will continue and to what degree it will be sustained. Telehealth has long played a role in delivering medical care, but that role was typically a small one before the pandemic necessitated virtual patient-doctor communication on a massive scale in the United States. We do not expect telehealth usage to return to its pre-pandemic levels; rather, we believe this channel has been cemented as a standard option by which patients can expect to access care.   

In response to the COVID-19 pandemic, the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services suspended many of the regulatory and reimbursement frameworks that had previously stifled telehealth usage. This opened the floodgate: Medicare populations saw 3,000 per cent increases in telehealth volumes while commercial solutions like 98point6, Amwell and Teladoc, just to name a few, grew exponentially. According to the Centers for Disease Control and Prevention, 30.2 per cent of all medical visits were virtual between June 26, 2020, and November 6, 2020, the last period for which data are available.

 

It is difficult for the CDC to accurately track telehealth usage given the disparate systems and definitions of a virtual visit. However, the performance of public telehealth companies Teladoc and Amwell speaks to telehealth’s rapid adoption. Both companies experienced incredible surges in growth last year, and it’s fair to say other private providers of telehealth technology saw similar growth.

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The billion-dollar question is: will telehealth remain a meaningful part of the health care experience once society fully reopens? Investors are betting it will. Teladoc and Amwell added as much as $30 billion and $5 billion, respectively, to their market capitalizations during the pandemic. Furthermore, investors including health care providers themselves poured $1.9 billion into 163 U.S.-based telehealth companies since the pandemic began, according to Pitchbook data. This is more than double the dollars invested in 2017, 2018 and 2019 combined. Investors are betting big on telehealth playing a significant role in the future of health care.

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The telehealth fervor has also attracted the attention of Amazon, which recently launched Amazon Care from the ashes of Haven, its now-defunct joint venture with JP Morgan and Berkshire Hathaway to provide health care for the companies’ employees. Amazon Care started as a virtual health solution for Amazon employees living in the state of Washington and has expanded across all states and other employers. Amazon is also convinced that telehealth will remain meaningful post-pandemic.

Regulatory puzzle pieces

Of course, the regulatory and reimbursement environment looms large over the entire telehealth sector. If the waivers that allow for telehealth visits to “cross” state lines and get reimbursed at parity with face-to-face visits lapse, much of the progress and investment we have seen since the pandemic began will be shelved or even lost.

Many members of Congress and others within the Biden administration recognize that the regulatory and reimbursement framework governing telehealth must be updated. As reported by the Kaiser Family Foundation, there are various proposals in play. We believe the most likely outcome, as of this writing, is that the current waivers, which are set to expire at the end of the year, will be extended by two years to allow Congress and the administration more time to collect data on telehealth usage and outcomes. This will likely be part of the infrastructure package or a reconciliation bill. 

The likelihood of a temporary extension may not satiate health care executives and long-term investors who worry that there are only a few months before the waivers expire.. But many states are exploring options to expand telehealth at least for Medicaid recipients. All 50 states and Washington D.C. have issued guidance to expand coverage, according to data from Manatt Health provided to the Kaiser Family Foundation, and 43 states offer telehealth reimbursement at parity with face-to-face visits for at least some services. Twenty states have gone so far as to lower telehealth copayments.

All this is important, but ultimately the future of telehealth rests on whether patients like the experience of virtual health care, and there are signs that they do. In a recent J.D. Power satisfaction survey, telehealth platforms scored an average of 860 points out of 1000, which ranks among the highest score of all surveys the company has conducted across the health care, insurance and financial services industries.  

What is next for telehealth?

Providers, investors, patients, Congress and major companies traditionally outside the health care space such as Amazon all recognize the benefit of telehealth. So what does this mean for the future? In answering this question, it is important to distinguish between a Zoom meeting with your primary care physician, and a virtual care platform that integrates your many virtual and perhaps asynchronous interactions with your care team into your overall physical and mental health experience. We are generally living in the world of the former; transactional exchanges that are convenient but offer little additional benefit. In other words, the former experience does not leverage the technology to do anything beyond replacing the face-to-face exam room with a virtual one.

The latter experience, which uses a comprehensive telehealth platform, will change health care in a way unique to the technology. Such platforms will eventually collect biometrics and other data, including data from the patient-doctor conversations themselves, and assemble it into useful insights for the patient and his or her care team. In addition to moving the service into a virtual environment, these platforms will truly augment the delivery of care in a way that will meaningfully improve outcomes and population health. 

The future of telehealth is bright. The pandemic accelerated adoption by several years, much to the pleasure of many health care leaders, investors, physicians, legislators and patients. While questions about the future reimbursement and regulatory environment remain, we are confident that telehealth has been cemented as a legitimate channel of care and a true technology platform that augments physical and mental health care in a meaningful way.

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