Anyone working in healthcare now understands the havoc that COVID-19 has wreaked upon the medical system. But it’s not all bad news for those in the business of healing others – the adoption of innovative technologies has made it possible for providers to respond to the needs of their patients in new ways. Despite being around in some form or another for years, telehealth is the rising star in today's 'new normal,' and it's a trend that's touched down in several countries and echoed across Wall Street.
The novel virus has brought about a digital revolution, and it’s being ushered in by telemedicine – a concept with a broad definition. It can mean anything from phone contact to address a patient’s needs, virtual visits with a client, or using remote instruments like an at-home stethoscope or blood pressure cuff to assess a condition. Many companies have started under the telehealth banner, but their services are as diverse as the clientele they serve. Either way, the novel virus has launched telehealth into mainstream healthcare, and both providers and patients are getting their first taste of what it has to offer.
Ever sensitive to the shifting winds and the opportunities they bring, venture capitalists responded to the sudden demand for telehealth services with increased capital contributions. Funding levels for the first quarter of 2020 surged up to $788 million – threefold what it was at the same time last year when it topped out at $220 million. Globally, VC funding into digital health companies saw a record-setting jump to $3.6 billion across 142 deals compared to $1.7 billion for the same number of transactions in the last quarter of 2019.
Mergers and acquisition deals concerning telehealth and connected care technology also ticked up during this time. Some of the major deals include the publicly traded Teladoc Health who purchased InTouch Health for $600 million while Masimo acquired NantHealth’s Connected Care firm for $47 million. Additionally, AMN Healthcare bought Stratus Video for $475 million. All told, there were 41 M&A transactions where a virtual care company was involved in Q1 2020.
The future looks promising for telehealth and revenue potential even more so. An estimated 12 million visits were conducted via virtual channels last year – a scant 2 percent of total provider-patient contacts made. Video conferencing and remote monitoring are being integrated with electronic health records, cloud-based analytics platforms, and clinical workflow processes. More extensive use and greater integration mean that the market for "addressable concerns" could be worth as much as $30 billion.
But former emergency room physician Caesar Djavaherian urges healthcare leaders to approach post-virus adoption of telehealth thoughtfully. He believes that some issues can be addressed through a virtual channel. In contrast, others will need the in-person touch: "The healthcare system is incredibly complex, and the number of different patient presentations is incredibly diverse. We should use telemedicine in areas where telemedicine works and is effective and can resolve a patient’s problems with the same clinical standards as an in-person visit,” Djavaherian said.
Even though there is no one-size-fits-all telehealth answer, patients, providers, and healthcare systems are feeling their way through the crisis. They are striking partnerships with technology companies, changing the way patients interact with medical staff, and forging a new way forward for everyone their services touch.