The stars are aligning for explosive growth in telemedicine and investors are clamoring for opportunities to participate. Venture capitalists are flocking towards mobile healthcare startups and growth-stage companies and telemedicine ventures in particular. The recent Teledoc IPO, which raised over $157 million for the Texas-based company, lets patients contact their doctors any time through phone, online and mobile, reflects public markets’ enthusiasm for this sector. Two weeks after the IPO, Teledoc was trading above $30, significantly above its $19 IPO price.
What is it about 2015 that accounts for this surge of confidence in telemedicine? The forecasted growth of home health technologies is skyrocketing. According to Tractica, a marketing intelligence firm, the number of consumers using home health technologies globally is expected to grow from 14.3 million in 2014 to 78.5 million by 2020. ReportsnReports.com predicts that the US market alone is expected to grow from $240 million to $1.9 billion by 2019. Medical monitoring, diagnosis and treatment are expected to be the largest application market during this timeframe, while remote consultations, eldercare and health and wellness will also be key segments.
Increased Technological Capabilities
No doubt technological advances have hastened the migration towards telemedicine, making it more realistic that quality care can be provided from afar. Perhaps the biggest driver of telemedicine growth is the increased usage of mobile phones and connected devices around the world. In addition, faster internet connections and better software facilitate smoother communication, especially video chatting. Improved connectivity allows patients to access their doctors from virtually anywhere, and electronic health records have increased a doctor’s ability to consult remotely. New technologies that enable providers to remotely monitor patients and receive visual information real time have also played a large role in facilitating the ability to deliver care remotely.
Growing Consumer Demand
As consumers become more comfortable with the concept of telemedicine and more aware of what tasks can be accomplished remotely, pressure has increased for the healthcare industry to keep pace. People have become more and more accustomed to living their lives from the comfort of their own living room and have begun to question whether or not they have to get in their car to speak with or be examined by their doctor. If I can Skype my son who lives in Hong Kong, why can’t I Skype with my doctor? If I can send a picture of the disease in my grass to the lawn doctor, why can’t I send a picture of my rash to my dermatologist?
A significant factor hindering telemedicine growth has been the difficulty of health care providers and patients getting reimbursed for medical services delivered remotely. However, as regulators and legislators increasingly understand the potential benefits and efficiencies that remote care can provide, these barriers are starting to drop away. Just last week, the inevitable yet slow road toward incorporation of telemedicine into our national health care delivery system took another baby step forward as Delaware became the 29th state to adopt a telehealth parity law, requiring health plans to cover telemedicine services for members at the same level as in-office treatments. Within the same week, federal legislators re-introduced the Medicare Telehealth Parity Act of 2015, which provides for payment parity for an expanded list of tele-health services available to Medicare beneficiaries. Many states are also beginning to work with one another to create more streamlined interstate licensing procedures so physicians will be able to care for their patients as they move from state to state.
More Work Ahead
While skies are clearing for telemedicine, there are still many issues to be resolved. Most important, of course, are legitimate concerns such as those raised by the American Academy of Pediatrics that telemedicine, in certain situations, could compromise the quality of care received by patients. In addition, payment and coverage for services delivered via telemedicine continues to be an issue for health care providers and patients alike. That being said, the potential to more actively monitor patients over time, reach patients in underserved communities, and treat individuals who are not mobile, coupled with the potential for cost savings cannot be ignored. There is little doubt that those who have products which can move this process forward, and those who finance those products will find themselves very popular among healthcare providers and patients alike.