A status check on Telehealth: Key hurdles and success factors, current implementation and near-term expectations

Telehealth is touted as the gamechanger for the Healthcare industry and help speed up its digital initiatives. Some initial success is seen but it is still far away from being called a blockbuster. We look at some of the possible reasons holding this segment back, current implementation status, disparities among global regions, some key operational segments, and what to expect in the near-term.

Healthcare businesses have lagged other industries in hopping onto the digital bandwagon and yet it is an industry with one of the biggest opportunities for profiting from the digital revolution. Telehealth encompasses digital services such as telemedicine, remote monitoring solutions and online diagnostic tools and it was believed to be the game changer for healthcare, help bring better care to patients and more users, vendors and other participants board the digital ride. However, years have passed since the initial pilots were conducted and yet we see only a handful of successful cases in the segment.

EVERYTHING POINTS TO TELEHEALTH BEING A GREAT TOOL, THEN WHY HAS IT FAILED TO TAKE OFF

Telehealth adoption rates are quite low even in the most developed countries. A study even puts the penetration rate below 1% in US. The promise of Telehealth is yet to materialize despite generous amounts being pumped into this segment. On the outside, it seems like a great tool and a great convenience for all parties involved. Then why has it failed to gain the numbers. Learning from failures of some of the most popular and ambitious projects, below enlisted are some of the possible obstacles for Telehealth:

Policy hurdles – The government proactivity plays a huge role in implementation of such programs. They need to support these programs through major policy reforms, accepting and promoting that digital components can add value to traditional healthcare practices. Opportunely, there have been some efforts made in this direction with some key announcements made over the recent years. However, most of these projects are still pilots and the benefits are yet to fully reach the masses. Additionally, there are issues such as individual licenses for different states (in the case of US) or different countries (Europe). In most cases, the HCPs need to acquire separate licenses to operate in different geographies and they are often quite expensive and the application processes quite time consuming.
Investment costs and uncertain ROI – Doubts around reimbursements and adequate returns on investments has slowed down adoption. There is limited insurance coverage or clarity, especially for remote and underserved regions. This in a way, defeats the whole purpose of Telehealth. In many cases, the hospitals are themselves left to bear the whole cost of implementation. Heavy capital expenditure requirement and lack of reimbursements are serious financial hurdles for some of the care providers.
Limited ‘human touch’ and possibility of double costs – Patients perceive visiting a doctor as a more reliable solution, especially if the condition is severe. Patients also think it is easy to overlook certain symptoms during online consultations. Additionally, the telemedicine consultant might just ask them to go visit a clinic due to the severity of the situation. In the process, the person loses not only time and money, but needs to make the additional efforts of scheduling, commuting and explaining their condition once again.
Data security – Data breaches are nothing new but when a person´s health related information is at stake, people tend to become ever more conscious. There have been several instances in news lately, where, from tech-giants such as Facebook to local hospitals faced data leaks. It would be a long process to instil faith – That the information shared online, would be as safe as when shared with a family doctor.
Nature of the industry – Compared to other industries, Healthcare is a laggard industry in terms of innovation in service delivery models. It is often slow in investing in the required infrastructure and HCPs, generally, orient towards maintaining the status-quo.

WHAT CAN HELP TURN THE TIDE?

Awareness programs from employers and providers – Healthcare executives are more proactive towards Telehealth services compared to the end users themselves. Cited as one of the key elements for low usage, most of the people are hesitant to use at first. However, there is a silver lining to it. Once the user has had an initial interaction with the service, and are comfortable, they are highly likely to hold on to the service. Additionally, most of the users are unaware which services are available to them or which of them would be reimbursed. Hence, investing in programs to raise awareness around the availability and reimbursable options is much required.
Treating Telemedicine as one component of the whole treatment and not a complete solution in itself – Virtual care should not be regarded as ‘almost-real care’ or a substitute for in-person consultations. Providers and health plans need to recognize that virtual care represents a viable and valuable approach to the whole patient treatment and journey. Emphasis should be put on providing a hybrid experience of an in-clinic and video consultation. A virtual-only, video consultation doesn’t seem to be a great product for consumers. Telemedicine should not look at bypassing the existing healthcare system completely but look for opportunities to supplement it.
Not try to do everything at once – Providers should define the business models keeping mid-term and long-term objectives in mind. More often projects have failed due to a disconnect between need assessment and services provided. It would be prudent to first understand the response to different value-added services before offering a full bouquet.

IMPLEMENTATION AND ACCEPTANCE BASED ON REGION

Although the factors for hurdles and success are similar, one can still find great discrepancies in implementation in different geographies. In relative terms, one sees that US has a more developed market in terms of business models and policy favourability compared to Western European countries. However, that´s changing. On the other hand, the users in China are more open to trying out new digital initiatives, even in the medical sphere, and that´s driving better adoption. But it is still not very high. Looking a bit further into each market:

US – As per a study published in Washington Post: Overall, annual telemedicine visits increased from 206 visits in 2005, or less than 1 per 1,000 people in the study, to more than 202,000 visits in 2017, or more than 7 per 1,000. Most of this increase happened over the past few years of the study, with an average annual compound growth rate of 52 percent from 2005 to 2014 and an annual average compound growth rate of 261 percent from 2015 to 2017. However, as one can witness, the penetration rate is still below 1%.

Western Europe – In Western European countries, the policies vary by country but there have been some promising announcements from various governments over the past year.

Germany´s government, in June 2019, amended laws to allow doctors to prescribe apps for caretaking, with costs picked up by statutory health insurance.
The year 2018 marked a significant shift in the deployment of telemedicine in France. Teleconsultations, i.e. remote consultations by a healthcare professional, have been included within the coordinated care pathway, as per the provisions of the 2018 Social Security Financing Bill.
Armed with an expanded budget, UK’s NHS made mHealth, Telehealth a priority in its new 5-Year plan with ambitious targets.

With the opening of the reimbursement door for Telehealth services in these major countries, the outlook has improved sharply, and the landscape is changing with several projects being conducted in the recent months. Programs are moving from pilot stages to a larger deployment. For example: NHS announced it is extending its Diabetes prevention program, conducted in cooperation with digital service providers such as Oviva and Liva Health, from a current group of 5,000 participants to a larger base of 200,000 per year.

China – The Chinese government has been actively promoting the development of telemedicine services through hospitals. Beginning in 2010, the Chinese central government invested more than $13.3 million in establishing community-based remote medical systems in the Central and Western regions of China. By 2013, these remote medical services were adopted in various forms in more than 2,000 hospitals. The Telemedicine Service Standard was further amended in 2018 to include more modules and treatments of care. As such, one can see a higher awareness and user acceptance in this key market. There has also been a spate of digital services-related partnerships between US healthcare companies and their Chinese counterparts. For example: Jianke partnered with Pfizer to expand its online healthcare services portfolio. The Jianke Doctor platform has about 100,000 registered doctors who provide more than 300,000 consultations per day.

Below summarized is the current Telehealth landscape in different regions:

KEY SEGMENTS WITHIN TELEHEALTH

What can also help in the larger adoption of these services is a change in the existing business models, to bridge the gap between the virtual and the real world. Currently, telemedicine, remote-monitoring and doctor appointment scheduling are the key services offered as Telehealth services. Most people are aware of these services, so we would spend more time looking at segments which have emerged recently. Key segments within Telehealth space:

Telemedicine – Real-time video or chat consultations with medical professionals. Some key companies: Teladoc, Doctor on demand and MDLIVE
Remote monitoring and coaching – Monitoring of patients outside of conventional clinical settings. For example, in their homes. Some key companies: Livongo, Noom and Oviva
Doctor search and appointments – Tools for searching and scheduling appointments. Some key companies: Doctolib, Zocdoc and Practo

There are two emerging segments which can help fill some of the gaps in current service offerings and increase adoption rates:

Retail Clinics – Retail clinics can be considered as hybrids between a clinic visit and an online consultation. Patients can visit their neighbourhood retail chains or other public areas such as malls and schools, get inside a chamber operated unmanned or with a physician assistant and then consult with a doctor via a screen. Basic medical instruments such as a thermometer and a blood pressure cuff are provided inside the chamber. Recently, a similar service was piloted and then launched in China by Ping An. The clinics currently provide consultations for more than 2,000 common diseases.

Virtual Diagnostic Platforms – While these solutions have been around for a while, with the recent advancement in technology they have seen increasing traction. Healthcare chatbots are now able to provide initial diagnosis to patients more accurately and serve as a better alternative to asking Google or checking WebMD. Companies such as Ada and Babylon Health are leading from the front in this space. Saudi Arabia wealth fund´s big investment in the space hogged the headlines recently.

To conclude, Telehealth has a lot going for it but remains only marginally used. The opening of more reimbursement routes in key geographies is a first step towards its larger adoption. New models such as retail clinics and virtual diagnostic tools should also help in expediting the process. However, the main impediment to a widespread usage is the user reluctance. Much more needs to be done to create awareness, to create faith and to bridge the gap between a virtual-only solution and an in-person doctor visit. The expectation for the next few years would be, a larger introduction of hybrid (online- and offline-) service offerings, which would remove the initial user hesitation and transform them into more ardent Telehealth users.

Let us know your thoughts on the topic and how do you see the industry developing.