The coronavirus response has boosted telehealth use considerably, and many investors are banking on telehealth as the way of the future.
The pandemic has forced primary care and specialty physicians to adopt virtual care and telehealth so patients can still receive care while social distancing and medical resources can be reallocated to the frontlines of treating COVID-19 patients. This year, the U.S. telehealth market is expected to reach around $10 billion by 2020 with an 80 percent year-over-year growth due to the COVID-19 pandemic, according to an Arizton report.
Here are 10 other observations on the telehealth market:
1. Around 76 percent of U.S. hospitals are connecting with patients remotely using video, audio, chat, email and other technologies, according to the Arizton report.
2. Favorable reimbursement updates from CMS and private payers in almost all states make it more financially feasible for healthcare providers to perform telehealth services. The increases are currently temporary through the pandemic, but it's possible many changes could become permanent as the benefits of telehealth become apparent and patients demand it for efficiency in many instances.
3. Remote patient monitoring is included in the reimbursement coverage during the pandemic in almost every state and could lead to cost-efficiencies and more satisfied patients in the future. Widespread mobile health adoptions are accelerating these changes.
4. Hospitals had to invest quickly in scaling up their telehealth, remote monitoring and remote work capabilities during the pandemic. Many hospitals plan to invest more in telehealth solutions and physician education after the pandemic as well, according to Arizton.
5. Telemedicine startups raised around $523 million in 2019, and through April 16 of 2020 they have raised $208.8 million through 19 funding rounds, according to The Wall Street Journal. While many of the deals were likely in the works before the pandemic, the shift toward telemedicine could mean more investments in the future.
6. Patients are more likely to turn to telehealth after the pandemic, Managing Partner of Wardell Advisors, told the WSJ. This is a major behavior shift and accelerates telehealth adoption. The increased telemedicine familiarity could drive longer-term growth and encourage future investment. "Telehealth is an area where VCs can be pretty confident that they could put growth money in," he said.
7. So far in 2020, big telehealth investments include Tyto Care, which raised $50 million for its all-in-one modular device and telehealth platform for on-demand remote medical examinations. The technology is currently used at hospitals to treat COVID-19 patients. Another virtual care startup, 98point6, raised $43 million to increase capacity for its technology amid COVID-19, reporting patient volume increased 200 percent since January.
8. A recent Rock Health report said that investors are largely not reducing the capital they plan to invest this year and the firm said it expects to see "a flight to quality with competition for the best deals—investors with the capital to deploy will continue to invest in companies that are positioned to succeed in the rapidly evolving market for healthcare technology."
9. During the first quarter, 31 percent of digital health deals were Series C or later, and 63 percent of the funded companies sell to providers. There were five mega deals in the first quarter that raised more than $100 million among telehealth companies, with CloudPass raising the most at $285 million.
10. Investors are especially betting big on provider-focused innovation that improves efficiency, capacity and workflow, according to Rock Health. "Innovation that scales the capacity of healthcare providers will be critical to the national response to COVID-19. We are hopeful to see how startups work alongside their healthcare system partners to adjust to this new imperative," state the Rock Health report authors.
More articles on telehealth:
Mount Sinai, UPMC among first to get FCC's COVID-19 telehealth funds
The telehealth services Aetna, UnitedHealthcare & more payers are covering during COVID-19 pandemic
BCBS of Massachusetts telehealth visits spiked 5,100% in March: 3 notes