What Entrepreneurs Need to Know About the Post-Pandemic Telehealth Industry The world's new virtual reality has created potential opportunities in the healthcare ecosystem.
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Covid-19 has dominated the headlines for well over a year now, and it's clear that the pandemic has led to significant changes in the healthcare industry. Digital initiatives for healthcare that were once considered optional have become a vital part of the system. With this shift, opportunities have emerged for entrepreneurs to make an impact in this new landscape.
By accelerating a massive shift to the use of telemedicine across the globe, the telehealth ecosystem has been growing at a fevered pace to accommodate the needs of both patients and healthcare personnel. A recent McKinsey & Company study suggests that "up to $250 billion of current U.S. healthcare spend could potentially be virtualized."
If that's accurate, then entrepreneurs will get their shot at overhauling the medical industry through digital transformation. With growing consumer acceptance, the conditions are ripe for some to succeed. Between 2010 and 2017, the percentage of American hospitals that provided care to patients through video and other technology increased from 35 percent to 76 percent. Even pre-pandemic, the American Medical Association reported that telemedicine insurance claims increased by 53 percent from 2016 to 2017. This is likely due to the increasing efficacy of telemedicine and the maturation of the technology, as physicians are able to deliver more of their services virtually.
Digital is driving the healthcare industry in new directions
Technology is empowering the healthcare industry to deliver more facets of patient care. Health consumerism has become a trend through fitness as consumers flock to wearables and health apps that offer help with remote monitoring. The market already has several new smartwatches that provide heart rate and oxygen saturation monitoring. During their 2021 Worldwide Developer Conference, Apple announced several new health initiatives in their ecosystem, with entrepreneurs utilizing their CareKit, HealthKit and ResearchKit to create meaningful apps in their ecosystem to employ and enhance Apple's Health app.
Telemedicine: Identifying both ends of the spectrum
User-friendly telecommunication systems offer both patients and physicians a high degree of flexibility to provide and receive trustworthy and sustainable care. Although telemedicine is bridging the gap between patients, physicians, and other allied systems, it does come with its own set of challenges.
Physical exams have a much narrower scope
As much as virtual appointments work well as a suitable medium for quick follow-ups, they limit the scope for physicians to conduct the physical part of their clinical examinations, which is the standard second step of the history and physical examination for all new patients. Invasive and expensive testing and surgical procedures require a more hands-on approach and are not replicable with telehealth capabilities; however, more evolved the systems are.
Insurance lag leading to increased out-of-pocket costs
Since telehealth is still an emerging concept, insurance companies can reject claims due to existing policy provisions while increasing profitability by dismissing claims that ultimately leads to additional out-of-pocket expenses for the patient.
In addition, some Current Procedural Terminology (CPT) codes have been updated to allow for higher billing to insurance when using a medical device. The suspect value proposition of some of these devices is that physician's offices could bill insurance at a higher rate while not improving the quality of care being given.
A virtual window of opportunity has opened for mental health
One significant arena in which telehealth is becoming a vital tool is in mental health. Often shrouded with stigma and fear, mental telehealth services are becoming more accessible and creating an increasing willingness of people to seek counsel. The Journal of Health Service Psychology surveyed over 3,000 psychologists and reported an increase in the use of telehealth services from 29 percent to 83 percent during the pandemic. The report also indicated an increase in the number of patients willing to continue this practice in the future.
A significant byproduct of the pandemic has been the initiation and acceleration of virtual care, which has created an uptick in opportunities for companies and startups to enter and benefit from the healthcare space. The metrics for these, however, are still largely tracked like traditional software products in terms of usage or revenue, and there are rarely any metrics of improving outcomes for patients. How exactly do mental health telehealth services compare to traditional, in-person therapy?
For positive change from the new digital health ecosystem to reach patients, many aspects need to be considered. Additional metrics should be tracked for overall outcome, rather than just usage or revenue. While the pandemic and its impact are very real, so are the misalignment of values for telehealth and other digital applications. And as entrepreneurs raise money and enter the market, the situation is bound to get worse because often, their incentives are aligned to making a profit and are less focused on the thought of improving the health of the actual populace.
Technology can be an extremely powerful asset, and as we all know, with great power comes great responsibility. While our world has been irrevocably altered by the pandemic and the digital health market continues to grow, I hope to see the next crop of entrepreneurs focusing on wielding the power of telemedicine responsibly, improving health outcomes for people, and not concentrate purely on traditional metrics to evaluate success.
Related: Healthtech Is the New Healthcare