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Telehealth usage boom signals staying power even as pandemic-related demand ebbs

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As the coronavirus pandemic took hold in the U.S. — keeping people at home and out of hospitals due to social distancing policies and the cancellation of elective care — patients and healthcare providers turned to telehealth and virtual care at rates the industry has never seen before.

Patient volumes were up by 3,000% to 4,000% by mid-March in certain U.S. locations compared to usage before the pandemic, Peter Antall, chief medical officer for the telehealth provider Amwell, said in an interview. Some providers that rarely deployed or had never offered telehealth have now adopted the services, Antall said.

Across all services, for both patients and providers that work with the company, usage was up by about 1,000% in mid-March compared to pre-pandemic levels, according to Antall.

"As we got into March and April, we saw growth like nobody could have ever predicted or planned for," Antall said. "It was just remarkable."

Telehealth, also called telemedicine, primarily involves the remote delivery of healthcare, such as patient monitoring or using a live video feed to connect patients with specialists sometimes hundreds of miles away.

When the coronavirus pandemic was accelerating in the U.S., patients flocked to telehealth services. Hospitals reported that this freed up resources and emergency room staff who were seeing an influx of patients with the virus.

The Trump administration even temporarily waived a long list of Medicare payment and coverage regulations to spur greater use of telehealth, including changes the industry had sought for years.

Driving adoption

Changes such as increasing the number of services covered by Medicare, paying for care delivered in patients' homes at the same rate as in-person care, and allowing physicians to treat patients across state lines without a new license have driven the increase in adoption, Shabana Khan, director of child and adolescent telepsychiatry for NYU Langone Health, an academic medical center in New York City, told S&P Global Market Intelligence.

NYU Langone, being in the epicenter of the U.S. pandemic, saw about 7,000 video visits per day during the peak of the crisis, with about 100,000 video visits in April, compared to about 300 visits per day before the pandemic, Khan said.

Teladoc Health Inc., a public telehealth provider, has likewise seen usage soar. While many healthcare companies and most of the U.S. market have suffered during the pandemic, Teladoc's stock price climbed from $93.52 on Feb. 21 to $221.14 on June 16.

Livongo Health Inc., a remote patient monitoring company focused on treating patients with chronic conditions, has seen substantial stock price growth as well. Livongo's stock price grew from $27.82 on Feb. 21 to $66.52 on June 16.

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For privately held Amwell, previously called American Well Corp., the enthusiasm for telehealth carried over to its series C funding round, in which the company raised $194 million.

The company filed for an IPO and may go public as early as September, according to a June 4 CNBC report. A spokesperson for Amwell would not comment on the report.

Along with growing coverage from federal and state health insurance programs, private insurers like UnitedHealth Group Inc., Anthem Inc. and Humana Inc. have all expanded telehealth policies during the pandemic.

"We have dramatically scaled our ability to care for patients digitally, including through telehealth vehicles and will, by the end of this month, have over 10,000 providers on telehealth platforms and solutions," Wyatt Decker, CEO for UnitedHealth Group's subsidiary OptumHealth Inc., said on an April 15 first-quarter earnings call.

Staying power

After months of significant declines in elective care and over 1.4 million job losses in the health sector, hospitals are restarting in-patient care, jobs numbers are rebounding and states are re-opening across the country. Experts and industry members are now waiting to see how long telehealth's success can last.

The pandemic fueled growth for telehealth that would have taken a decade without the crisis, Ateev Mehrotra, associate professor of healthcare policy and medicine at Harvard Medical School, said in an interview.

However, he added that those highs are not likely to be sustained because patients will eventually want to return to in-person care as behavior changes were likely due to the unique situation of the pandemic.

"[Telehealth will] probably be a much larger role in the U.S. healthcare system than it was previously," Mehrotra said. "But I don't think it's going to grow in leaps and bounds that quickly."

Usage decline is likely to vary across geographies and service lines, Amwell's Antall said. However, the company has not yet pinned down where those variations are going to come.

Between mid-April and June, Amwell has seen about a 50% decline in its urgent care business, which is Amwell's largest offering, according to the company. But telehealth usage for behavioral health and psychiatry has increased by about 20% over the same period.

SNL ImageToni VanderPol, family medicine/obstetrics physician at Avera St. Benedict Health Center, demonstrates how the facility's live video telehealth service works.
Source: S&P Global Market Intelligence

Will changes become permanent?

While the payment and regulatory waivers from the Trump administration impacted telehealth's growth, the changes are temporary and some are set to expire July 25 when the U.S. Department of Health and Human Services' public health emergency declaration runs out.

The regulatory changes made by the administration have been some of the biggest influences on increased adoption, particularly payment changes, Khan said.

"So, that is the big question: What's going to become permanent?" Khan said. "We're all wondering; we're all hoping that it'll be a positive outcome."

Seema Verma, the administrator for the U.S. Centers for Medicare and Medicaid Services, has supported opening up telehealth regulations beyond the pandemic.

If waivers like allowing patients to be treated in their homes and states' Medicaid changes expire, it presents "a terrible situation," Antall said. He added that HHS and CMS cannot permanently change all telehealth regulations, so some changes would need to be made by Congress.

A bipartisan group of 30 senators signed onto a June 15 letter to U.S. Senate leadership asking for the temporary telehealth provisions outlined in previous coronavirus pandemic legislation to be made permanent.

Experts testifying at a June 17 hearing held by the Senate Health, Education, Labor and Pensions Committee also advocated for continuing payment policies and other changes made for the pandemic.

Sen. Lamar Alexander, R-Tenn., committee chairman, supported making certain payment changes permanent, saying that three months of the pandemic has given about 10 years' worth of experience and outcomes in telehealth.

"I suspect we're talking about the biggest change in healthcare delivery in a long time, maybe ever," said Alexander, whose state is home to HCA Healthcare Inc., the largest publicly traded hospital chain in the U.S.

"Telehealth is here to stay one way or another," Antall said.