Telehealth: From Competitive Advantage to Strategic Imperative

Health Update

Editor’s Note: The recent American Telemedicine Association (ATA) Annual Conference and Expo brought together nearly 5,000 thought leaders from provider organizations, telehealth companies, payers and government. Below are some key observations from the meeting.

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Telehealth at an Inflection Point

Given the depth and breadth of service offerings now available, and the level of commitment that large and complex health systems are making to their telehealth programs, the widespread adoption of telehealth services within healthcare systems seems inevitable. The trends of low-cost technology, robust patient demand, limited provider capacity and increasing hospital cost structures have coalesced over the past few years and are driving the provider market toward a reality in which having robust telehealth offerings will no longer be considered a competitive advantage but a strategic imperative.

At leading provider organizations, telehealth offerings are becoming an integral part of transfer center operations, clinical service distribution and patient acquisition strategies. Vendors are achieving significant scale. It took Teladoc 10 years to achieve its first million patient visits and only 10 months to achieve its second million.

Significant Vendor Consolidation

The level of merger and acquisition activity among telehealth vendors over the past year is unprecedented. At the ATA Conference, American Well announced its acquisition of Avizia (which had recently acquired Carena), and InTouch announced its purchase of Reach. Consolidation is being fueled by vendors’ desire to offer a comprehensive platform to provider organizations for their B2B business lines.

Driven by consolidation and late-stage capitalization, a few clear industry leaders are emerging in each of the direct-to-consumer and provider-to-provider telehealth verticals, with some starting to offer products across both. Telehealth vendors are also increasingly interfacing with leading electronic medical record (EMR) platforms and peripheral devices. This should generate further health system adoption, as provider organizations will only need to contract with one or two vendors that can comprehensively serve their needs and integrate with their existing technology platforms.

Clinical Use Cases and Capabilities Moving Upstream

Just two years ago, most direct-to-consumer telehealth services were limited to urgent care, primary care and, less frequently, behavioral health. Now, more complex use cases are proliferating in a diverse range of areas, including complex care management, dermatology, oncology, cardiology and endocrinology (with the support of connected devices). In the provider-to-provider space, telestroke and electronic intensive care units (eICU)—telemedicine using state-of-the-art technology to provide an additional layer of critical care service—are dominating the market. Now there are provider-to-provider use cases being deployed across all service lines of the health system.

Good Examples From Nontraditional Provider Organizations

In many ways, not-for-profit and academic health systems in the United States lag behind other segments that have been pursuing a telehealth agenda for many years. Veterans Affairs, for example, had more than 2 million telehealth episodes of care last year reaching more than 700,000 veterans across its 50+ telehealth services. A large provider group in Brazil recently introduced an urgent care telemedicine program that significantly reduced avoidable emergency department utilization and achieved a 97% patient satisfaction rating.

A Significant Focus on What Big Tech Will Do

Nearly every panelist at ATA mentioned Google, Amazon or Apple in their commentaries. After years of wavering, it appears that each of these companies is making a significant play in healthcare. Each will build on its existing platform capabilities as its market entry approaches—Google through its expertise in artificial intelligence and data analytics, Amazon through its national distribution capabilities and Alexa platform, and Apple through its consumer-centric approach and highly controlled app environment. It is yet to be determined how each of these organizations will play in the telehealth space.