Industry headlines this spring read like an obituary for telehealth. With major players like Walmart and Optum stepping back from the technology and telehealth companies deep in the red, it's understandable that some are quick to pronounce the industry’s demise. However, as Miracle Max from The Princess Bride wisely observed, "there's a big difference between mostly dead and all dead."
While telehealth may be down, it's certainly not out. Inside health systems like Stanford Health Care, virtual care is not just alive but thriving. Seeing its benefits for patients, from enhancing care to improving access, we are confident that the best years are ahead — but only if we draw the right lessons from its recent market correction. Writing off the technology would be a serious mistake and a detriment to patient health.
The market was indeed due for a correction. During the pandemic, telehealth investment was gravity-defying, with nearly $30 billion injected into digital health companies in 2021 alone. Since then, funding has shriveled, revealing that many companies overpromised and underdelivered.
It's also true that the sudden explosion in demand for virtual care, spurred by the pandemic, was going to be unsustainable. In the first three months of COVID-19, telehealth visits increased by 766% nationally, leading hospitals to record virtual care volumes. For an industry where digital transformation is measured in decades, it is unsurprising that many hospitals have seen telehealth use recede far from pandemic heights. However, a core group has persevered.
Stanford Health Care, for example, has maintained a strong adoption of telehealth. In FY2023, 40% of patient visits in our ambulatory faculty practices were virtual, far exceeding the 11% average nationally, according to Vizient, a healthcare performance improvement company. How? By making digital care a core part of care delivery. Rather than merely digitizing analog processes, we empowered providers to use the technology in ways that best suited them and their patients.
From this experimentation, we identified where telehealth adds value to our care services and then invested heavily in integrating the technology into these workflows. Additionally, we created pathways for patient feedback, designing surveys that guide our telehealth design and inform how we iterate on the user experience. This approach has been instrumental to our sustained success in virtual care and the high levels of satisfaction reported by patients. Over 75% of patients who had a video visit with us said it was either "very likely" or "extremely likely" they would choose video for their next appointment, and nearly 88% gave their most recent visit the highest possible satisfaction score. Those aren't the statistics of a practice circling the drain.
Herein lies an important lesson: Telehealth technology is not inherently flawed. Rather, its decline represents our collective failure to break free from traditional ways of working. During COVID, telehealth was an essential lifeline to patients when there were no other options. Both patients and providers were forced to adapt to it. But to sustain the technology's use, we must now integrate telehealth in ways that truly meet people's needs and complement the complex rhythms of care. Critically, this burden of effort cannot be shouldered by tech companies alone. We have clearly failed to figure this out together. Yet, we remain bullish about telehealth's prospects.
Think back to the early days of the Internet. Initially, many doubted its utility and potential. It took years before the Internet became an indispensable part of our lives, revolutionizing communication, commerce, and information access. Telehealth is on a similar path. Despite current market fluctuations, its potential to transform healthcare is undeniable.
We know, for example, that virtual care reduces expensive and unnecessary trips to the emergency department. Hospitals offering an emergency care virtual option report they can resolve the problem 60% of the time, reducing total admissions by up to 1,800 visits and saving almost 4,800 hospital bed-days. At a time when health systems are stretched beyond capacity, these efficiencies help ensure that patients receive the best possible care in the most appropriate setting.
Moreover, virtual care has proven to be a critical pathway for patients seeking access to complex care for conditions like cancer. Nearly a quarter of all new patient visits in our specialty practices occur virtually, and, across all our care services, patients saw their providers an average of 12 days sooner via video visit.
Promising signs are evident, yet there are factors beyond the health sector's control dampening telehealth use. As flexibilities tied to the COVID-19 Public Health Emergency have lapsed, providers have encountered outdated licensing rules limiting their ability to practice virtually across states. Extending Medicare's temporary waivers for remote visits would help alleviate this burden, as would allowing Medicare beneficiaries to receive primary care telehealth services without geographic restrictions. In addition, there is an obvious connection between telehealth adoption, insurance coverage, and provider payment parity. In states where Medicaid reimburses and there are commercial payment parity laws, for example, the uptake is much higher.
Here, we could again find instruction in the Internet's history. By funding research and development, establishing flexible regulatory frameworks, and supporting infrastructure expansion, public-private partnerships empowered the marketplace to turn a niche technology into a global economic powerhouse. Through thoughtful policies and reimbursement models that promote virtual care, we can ensure telehealth likewise reaches its full potential.
Ultimately, we all must make choices about what we value and where to invest. Are we content with the status quo, or do we want a modern system that provides more options to patients, improves access, and reduces burdens on clinicians? The choice is clear — and it's precisely why telemedicine demands more energy, not a premature eulogy.
David Entwistle is President and CEO at Stanford Health Care
Christopher Sharp, MD, is Chief Medical Information Officer at Stanford Health Care