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:
WHAT CAN HELP TURN THE TIDE?
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.
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:
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.