The Promising Emergence of Telemedicine
In the quest to improve U.S. healthcare by both lowering the cost of care and delivering improved outcomes, emerging technology solutions represent the most realistic and achievable path for success. One area of particular promise is the field of telemedicine, which utilizes remote communication programs to connect patients with healthcare providers and rapidly expands access to care, particularly in rural areas. For many healthcare issues, telemedicine can be administered at a cost far below that of live patient-provider encounters. As providers, patients, and payors increasingly recognize the benefits and ease of telemedicine solutions, investor interest in telemedicine is expected to intensify.
Although telemedicine in one way or another has been around since the introduction of the telephone in the early twentieth century, the expansion of widespread access to live video communication in recent years has brought telemedicine into its prime. Free, secure video links allow providers to visually inspect and communicate with patients that otherwise would face obstacles to receiving care. Patients with limited mobility, those who reside in areas far from providers’ offices, or individuals with chronic conditions who do not have the time to frequently travel to a provider’s office benefit from consulting via telemedicine. Telemedicine thus results in increased access to care and clinical touch-points with patients who otherwise would not receive them. As a result, telemedicine in many cases directly drives improved outcomes, which in the long term reduces the lifetime cost of care. Moreover, the potential cost of care can be decreased if (1) increased efficiency with time allows providers to see more patients than they would in the office, or (2) providers face lower overhead expenses when they are able to downsize their physical footprint as their practice moves to the digital realm.
First-movers in several specialties have begun to embrace telemedicine, with particular advancements in fields that are more dependent on visual and interpersonal observations than physical ones. Teledermatology, telepsychology, teleneurology, and telenutrition represent some of the services that providers, patients, and payors have begun to accept as legitimate substitutes for face-to-face care. Private equity investors have noticed, with companies such as Specialists on Call, MDPlan, and MYidealDOCTOR attracting investors’ attention.
Though the future of telemedicine is promising, certain hurdles to wide-scale embrace of the technology remain. As with all healthcare technology solutions, HIPAA considerations, including the importance of protecting patient health information, are paramount. Also, in most cases initial consultations or periodic live interactions between patients and providers are required to maintain a care regimen that includes telemedicine. The payor community has taken time to embrace and reimburse for telemedicine as well, and payors have not yet universally adopted it. In the coming years, companies will distinguish themselves by incentivizing telemedicine adoption and introducing technology to address the aforementioned considerations.
MHT Partners, a leading healthcare services investment bank, believes that innovative, niche solutions that decrease the cost of care while improving outcomes will shape the future of healthcare. If you would like to learn more about MHT’s healthcare services advisory practice, please e-mail Taylor Curtis (firstname.lastname@example.org), Patrick Krause (email@example.com), or Alex Sauter (firstname.lastname@example.org).