European countries are behind the USA in regards to telemedicine maturity, but they`re beginning to catch up

Telehealth services in the USA report significant increases on text, phone or video consultation in 2015. The European market lags behind as most countries have not set up clear regulatory guidance and only a few telehealth companies have managed to partner with leading payer organizations within the countries.

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In a recent project research2guidance assessed the maturity of the telemedicine market in Europe based on an analysis of 7 selected countries. The market conditions for telehealth services are diverse as in the rest of the EU countries. There are countries like UK and Switzerland that support telehealth solutions and others like Belgium that don’t.

Telemedicine Maturity Graph

The main factors that define the market condition for telehealth services are:

  1. Regulations: Regulation refers to any evidence of regulation regarding the reimbursement, parity and deployment of telemedicine found within a country’s healthcare policy. For example, the USA has enshrined telemedicine regulation in their Medicare program, which allows for the reimbursement of telemedicine in Health Professional Shortage Areas and in states outside the Metropolitan Statistical Area. However in each of the 7 European countries assessed there is a lack of regulation governing the reimbursement of telemedicine by the public healthcare sector. Only in the Netherlands are telephone consultations common practice for which doctors are reimbursed via fixed prices by HIC. However, this is only provided for a limited number of areas such as tele-dermatology and email-consultations, and face-to-face consultation must be established between the doctor and patients before they can employ telemedicine.
  2. Size of the addressable market: Most telemedicine services available in each of the countries are provided by the national public healthcare system. Other solutions are provided by private medical insurers (PMIs) as a complimentary service. Given the lack of public reimbursement, the addressable market consists of the size of population (with the potential of supplying direct2consumer paid telemedicine solution) and the number of people privately insured (and are therefore addressable in terms of complimentary services offered via their PMI). The UK therefore has one of the largest addressable market given its population size of more than 65Million, and the large number of whom that are privately insured (14%).
  3. Money in the system/ Cost saving opportunity: Increasing healthcare cost are omnipresent. Telehealth services promise to reduce cost of doctor’s visits especially for patients in rural areas or those which just need a second opinion. Countries with high healthcare spending (by capita) like Switzerland and a large population living far away from the next doctor are ideal target markets for remote doctor advice services.
  4. Competition: New telehealth services like those that are available and widely used in other European countries e.g. MeeDoc in Finland or Health tap in the USA do exists in the 7 countries of our panel. We found most of them in the UK and Switzerland. Available services in a country at this early stage of the market should be seen as an indicator for a more favorable market environment.

Of the seven European countries assessed Switzerland appears to have the most mature market. This is due to its favorable regulatory environment, which states that the same laws apply for telemedicine as to face-to-face consultations, the high number of privately insured people, and its strong telemedicine service offerings. Indeed, Medgate, a Swiss telemedicine center, claims to be the largest telemedicine solution provider in Europe, and is currently partnered with more than a dozen payer organizations.

However the remaining 6 countries assessed provide only vague regulatory references regarding public reimbursement of telemedicine services. Similarly most of the countries do not have clear regulations governing telemedicine parity. Belgium provides the least mature telemedicine market, in contract to Switzlerland, given the lack of regulation regarding telemedicine, the preference given to face-to-face consultation over remote consultation, and the dearth of telemedicine solutions partnered with payer organizations.

In stark contrast, telemedicine in the USA is being reimbursed in Health Professional Shortage Areas and in states outside the Metropolitan Statistical Area, enshrined in their Medicare programme. This year alone Telehealth services in the USA reported a significant increase on text, phone or video consultation.

That being said the EU Commissions has started to address the impact and potential of telemedicine. As part of their “Digital Agenda for Europe” the EU has begun to promote the use of telemedicine as a means of improving healthcare and increasing access to care whilst saving resources. However European countries retain their rights to either, grant full parity to telemedicine solutions, and embed telemedicine service within their public healthcare systems or not. Therefore it will be a long time until we see regulation standardized across the EU.

For those developing app based telemedicine solutions, they will have to wait for the market to catch up with innovation. That being said, innovative companies, like MeeDoc, might want to consider entering those countries with a favorable telemedicine market by partnering with PMIs, and help to promote the use of telemedicine biding their time until regulation catches up and their services are reimbursed.

As always comments are welcome!

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