latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/startups-upend-telehealth-treatment-models-as-patient-use-climbs-55893220 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Startups upend telehealth treatment models as patient use climbs

Virgin Media-O2 Tie Up, EC Reversal on Three-O2 to Reboot Consolidation

COVID-19 Impacts Incumbent Telco Revenues In Western Europe

Disney+ Ditches Free Trials — Will Other Big Streamers Follow Suit?

COVID-19 Pandemic Likely To Cause US Telemedicine Boom


Startups upend telehealth treatment models as patient use climbs

The following is part two in a four-part series examining how the growing telehealth industry is influencing healthcare delivery. This part focuses on how the telehealth industry is attracting growing interest from investors and the ways in which new startup companies are setting themselves apart from traditional telehealth companies. The third part explores the industry's move to in-home care and the fourth and final part on telepsychiatry can be read here.

SNL ImageEquipment used for telemedicine services at Avera eCARE's facility in Flandreau, S.D.
Source: S&P Global Market Intelligence

Start-up healthcare companies are exploring ways telehealth services can be used to treat specific patient populations during a period of steady, increased investment in tech-driven healthcare.

Investment in venture funding deals for certain U.S.-based digital health startups has grown more than tenfold over the last eight years, increasing from $56 million in 2011 to $657.5 million in 2019, according to data from Rock Health, a digital health investment firm. Investments in the industry peaked in 2018, with 53 separate deals totaling about $1.34 billion taking place.

Furthermore, the global telemedicine market valuation is projected to grow from $38.3 billion in 2018 to $130.5 billion by 2025, according to the research firm Global Market Insights.

The role of telemedicine, or telehealth, is increasingly evolving in both the healthcare and technology sectors. Services include the remote delivery of healthcare, ranging from sending images over email or text to connecting specialists to emergency rooms hundreds of miles away via a live video feed.

About 77% of respondents utilized some form of telehealth services in 2019, according to an annual consumer survey from Rock Health. Live-video use saw the biggest growth in the survey, with usage increasing from about 7% of consumers surveyed in 2015 to 32% in 2019.

SNL Image

Megan Zweig, head of research and marketing for Rock Health, said in an interview that investment in the space is driving consumer adoption of telehealth services.

"[Investment in telehealth companies] isn't just an opportunity that we see; we actually see behavior change," Zweig said. "The companies that are being funded are actually translating that funding into real solutions that patients are actually using."

Innovation in the industry

While the industry and some of its technologies have been around for well over a decade, newer startups are going beyond just connecting patients to physicians, according to Zweig.

Digital health company Livongo Health Inc., for example, is specializing in chronic care management for specific diseases like diabetes and developing treatment plans by focusing on a niche patient or disease type, Zweig said.

Companies that focus "care delivery on a single telemedicine platform makes it possible to collect and act on patient-generated health data, and allows these companies to closely manage the outcomes for a targeted population or diagnosis," Zweig said in an emailed statement.

Utilizing data and analytics is a strategy that has recently been attracting healthcare companies. Research shows that data will play a larger role in providers' strategies going forward.

According to a 2019 analysis published by 451 Research, a unit of S&P Global Market Intelligence, healthcare industry professionals are planning a range of data-dependent internet of things use cases over the next two years. Top examples include doctor assistance programs, such as artificial intelligence and machine learning, symptom monitoring and data tracking and sharing across the continuum of care.

SNL Image

These targeted strategies would utilize remote patient monitoring technology, which healthcare providers say saves costs and improve patient insights, according to a separate 2019 survey from 451 Research.

Traditional telehealth companies such as Teladoc Health Inc. and American Well Corp. are still attracting attention from investors and analysts, but Zweig said excitement has been building over the last few years around newer startups with targeted strategies.

Krisda Chaiyachati, medical director for telemedicine at Penn Medicine, an academic medical center in Philadelphia, said in an interview that while telehealth can successfully target certain populations like patients with diabetes, he cautioned that "one-off" companies with hyper-focused treatment strategies can miss factors contributing to patients' overall health.

While telehealth is essentially built on the goal of easing access to healthcare, Chaiyachati said this may also be its downside. Access could get so simple that unnecessary treatment is increased, which would drive up overall healthcare costs.

Integration of healthcare and broadband

A 2019 report from Alaska Communications Systems Group Inc., an Alaska-based telecommunications provider, shows that the relationship between broadband and healthcare services is increasingly symbiotic.

For example, the report found that the number of images used for telemedicine services at an Anchorage, Alaska, medical center has grown from 148 in fiscal year 2001 to 118,098 in fiscal year 2018, driving increased bandwidth demands and dependence on reliable broadband.

The report also found that since fiscal year 2015, the amount of time being spent on video conferencing calls for telemedicine services has grown exponentially within the Alaska Tribal Health System, a collection of more than 30 tribal health groups that provide care at over 200 sites throughout Alaska. From fiscal year 2015 to 2018, the amount of time spent on video conferencing calls less than 10 hours in duration jumped from 400,381 minutes to 3,671,330.

The total number of calls jumped from 26,569 to 134,968 in that same time period.

"[The Alaska Native Tribal Health Consortium] expects usage to continue to grow, in terms of the number of users, the number of sessions, and the number of concurrent sessions," according to the report. "ANTHC expects the average bandwidth demand for video-conferencing to double ... within the next two years."

SNL Image

Mark Shlanta, CEO of SDN Communications, a broadband provider based in South Dakota that works with telehealth provider Avera eCARE LLC, says healthcare is now SDN's number one vertical on the commercial side, even providing more business than the company's banking and agricultural verticals. The industry's growth has been fueled by the expansion of telemedicine, Shlanta says.

Shlanta also says beyond providing the networks for telemedicine facilities, the company also provides space for some of Avera eCARE's data centers.

The lone member of the U.S. House of Representatives in South Dakota, Republican Rep. Dusty Johnson, a former executive for a company that consults with the broadband industry, says he sees the continued adoption of telemedicine as a possible vehicle for growth throughout his region.

"[Telemedicine is] a growth opportunity economically insofar as South Dakota, some of our systems like Avera, have really attempted to be a national leader in delivering telehealth," he said in an interview. "They are really good at what they do and that provides an opportunity to have more jobs created here and provide an economic engine that will drive development here in this state."

Further integration of broadband and the healthcare industry not only allows companies to capitalize on new business opportunities but is essential to effectively treat patients.

"When sending medical data such as imaging or intensive care unit data, service quality and reliability are paramount," Alaska Communications' 2019 report stated. "If the data transmission were to fail during a live procedure a loss of life could occur."

Promise of value-based care

Because the current U.S. healthcare system is primarily a fee-for-service system, where payments are made according to individual instances of care, paying physicians for coordinated treatment using telehealth can be complex, according to Chaiyachati.

Treating a patient through telehealth is not always worth the return on investment, he said. However, paying for telehealth may become easier as the industry further embraces value-based payment models.

Value-based care is a payment model or system that pays providers based on the totality of care. The government's Centers for Medicare and Medicaid Services has supported this model and recently finalized certain payment systems that are structured around a value-based model.

Zweig said that along with focusing on a narrow patient population or disease type, telehealth startups like Virta Health and Omada Health Inc., both of which focus on chronic care treatment, are also structuring themselves to take advantage of value-based care models.

According to Zweig, Rock Health sees more value in companies building strategies around patient outcomes and value-based care compared to those built around targeting reimbursement codes under a fee-for-service system.