In this series, Health Evolution is examining the year 2021 in health care through the lens of our eight imperatives. We will be examining the trends that were at the top of CEOs’ minds throughout the past year and what may come in 2022. This week: Securing data advantage
Previously:
Usage of telehealth came back down to earth in 2021, but funding toward digital health solutions did not.
Trilliant Health, an analytics firm, found that telehealth utilization dropped across all states in 2021 compared to 2020, averaging a 40.3 percent decline in monthly visits. In some states, such as South Dakota and Wyoming, the drops were in the 55-60 percent range. McKinsey found that 13-17 percent of health care is happening via telehealth, which is significantly higher than it was before COVID but much smaller than it was during the earliest months of the pandemic when it was in the 30 percent range.
Health Evolution Summit 2022, April 6-8, Laguna Niguel, CA: Apply to Attend
Despite the drop off in consumer utilization, investors have not waned in their enthusiasm for telehealth and digital health. According to Rock Health, there was more digital health funding in the first three quarters of 2021 than all of 2020—which itself was a record-breaking year. There were more than 540 deals in the first nine months of 2021 vs. 464 in the entirety of 2020. In total, Rock Health predicts there will be double the total investment of digital health in 2021 than there was in 2020. Others are similarly bullish.
“It’s hard to imagine the trend will go away. Telehealth use is 40 times what it was before the pandemic. Consumer use of digital technology is three times higher than before. It’s tough to imagine that we’ll go back to zero,” says Neepa Patel, CEO of WellRight, a company which offers a wellness mobile health platform to employers, health plans and providers.
Sean Duffy, CEO of Omada Health, has seen increased excitement surrounding his digital health company. While the investments may be a little “overzealous,” he says it’s necessary to disrupt the health care industry.
“In the 5–10-year time frame, the funding surge of digital health is going to result in huge businesses that deliver extraordinary value. There is no question in my mind. The path there almost doesn’t matter,” says Duffy.
Health Evolution Summit 2022, April 6-8, Laguna Niguel, CA: Apply to Attend
However, not everyone is on board with imagining this virtual health future. Rock Health found that satisfaction with live video telehealth by consumers fell by 10 percentage points from 2020 to 2021. As the pandemic has dragged on, Rock Health reports that consumers have begun “viewing telemedicine as an alternative to in-person care, rather than a necessary replacement.”
Jami Doucette, MD, President of Premise Health, says the company’s direct care clinic is leaning into a hybrid model and is expanding its in-person clinics business.
“In the beginning of COVID, virtual was the dominant conversation piece. We’ve seen kind of a settling out of virtual, but we’ve also seen a material rise in the demand for near site centers. As we think about large self-funded entities wanting to take greater control of their medical spend…doubling down on where the majority of that spend occurs has been critical in those strategies,” Doucette told Health Evolution.
While investors are funding at unforeseen rates, Fast Company noted in a recent article that many pure play telehealth and virtual health companies on the stock market have seen a significant decline in value this year. This week, Castlight Health, one of the first digital health companies to go public, announced it struck a deal with Vera Health, under which it will become private. These are a few signs that turbulence is occurring within the virtual health revolution.
Mental health holds promise for telehealth
In the new normal, telehealth and virtual health are going to have a place in delivering care. How much of a place? That’s remains to be seen. Reimbursement for virtual care from CMS and other payers will certainly play a big role in determining how much telehealth is utilized going forward. Experts say that some areas of health care—such as wellness and mental health—seem to be riper for disruption than others. According to the McKinsey report, psychiatry has the highest penetration for telehealth usage at 50 percent.
“Reaching out for and receiving mental health care unfortunately still carries a lot of stigma. The access being provided by digital platforms helps patients receive care where they sit both physically and mentally. All too often in behavioral health, we’ve made patients come to us or jump through hoops to receive care. These platforms provide much needed anonymity for people,” says Stuart Archer, CEO of Oceans Healthcare, a behavioral health provider with 30+ locations (including 23 hospitals) across the Southeast.
Wellness programs aren’t new, but now many employers are looking for a more holistic approach that supports physical health, as well as mental and financial health.
Neepa Patel, WellRight
In the first three quarters of 2021, the largest share of investment, or $3 billion, went into companies operating in the mental health space, according to Rock Health. One of the biggest deals in the virtual health space in 2021 emphasized the potential impact that technology could have within mental health. Ginger and Headspace merged to form Headspace Health and create a $3 billion mental health tech company.
“We know that 50 percent of the world’s population will have a mental health need in their lifetime. That’s billions of people who could derive value from this platform. Ten percent of enterprises have a dedicated behavioral health solution. That should be 100 percent so there’s massive room for growth. We built the technology to do this at scale,” Ginger CEO Russell Glass told Health Evolution in an interview.
Guy Friedman, CEO of SteadyMD, says that behavioral health is a prime spot for telehealth because it doesn’t require physical touching. “That translates well to telehealth. The consumer and employer demand are off the charts for mental health because it translates well to telehealth,” says Friedman, whose company provides technology, infrastructure and clinical workforce so digital health companies can scale virtual care platforms.
Similarly, wellness is becoming an area where virtual health is thriving. According to one recent survey, 72 percent of employers who expect to be investing more in health and well-being will do so completely or mostly virtually.
“Wellness programs aren’t new, but now many employers are looking for a more holistic approach that supports physical health, as well as mental and financial health. They want to know how to aggregate all the disparate pieces of content, activities, programs, and philosophies into one space where their employees can have these resources at their fingertips whenever they want them — regardless of time or location,” says Patel.
Broadband, cost are limiting factors
Beyond mental health and wellness, there are other opportunities for virtual health and telehealth to have an impact in health care. Managing chronic disease, primary care, substance abuse treatment and providing care for rural and underserved communities are a few potential areas for telehealth and virtual care usage.
Yet, in terms of a rural care, there is work to do. A recent analysis from the University of Michigan found that rural patients were underutilizing telehealth compared to urban and suburban counterparts during the earliest days of the pandemic. Michigan researchers found that a lower percent of older rural residents are telehealth users compared to those who live in non-rural zip codes (34 percent vs 47 percent).
This was supported by a survey from the Bipartisan Policy Center, which found 45 percent of patients say that technology is an obstacle to receiving care via telehealth. This includes 27 percent who say their ability to use the internet or digital technology is an obstacle and 26 percent say it’s access to high-speed internet. The number is higher among rural residents.
“There are more people across the ages who need help with digital training. We need to meet people where they are. If this is truly health access then we need to meet older—and all people—where they are. We need to invest in broadband and tech support so all populations, particularly older people, can access this. Audio is sometimes the only way they can get to the clinician they need,” says Dorothy Siemon, senior vice president of the office of policy development and integration at AARP.
Lack of broadband access is one factor limiting telehealth and virtual care. Payment and reimbursement also matter. A recent study in JAMA found that patients in general preferred in-person care to virtual, particularly when video visits cost them more. If telehealth and virtual care isn’t covered by CMS and other payers the same way it has been during the pandemic, nearly half of physicians surveyed by the Primary Care Collaborative say they wouldn’t be able to support telemedicine if pre-pandemic regulations that limit the technology’s usage are restored.
This is why Ascension, Johns Hopkins, and a number of other prominent health care organizations recently launched a campaign to permanently end restrictions on telehealth that have been waived during the COVID-19 pandemic. The campaign, Telehealth Access for America, brought together 16 health care organizations urging Congress to keep pandemic-era telehealth flexibility rules in place forever.
“Protecting and expanding access to telehealth is essential to strengthening America’s health care future. Congress must act to expand patient choice in every American community, meet patients where they are, and bring health care into the 21st century. We owe it to our patients to make health care access easier, and patients with Medicare should not be excluded from this opportunity,” Brian Hasselfeld, MD, medical director of digital health and telemedicine at Johns Hopkins Medicine, said in a statement.
