Year: 2019 and 2027
Market size: $61.4 billion and $559.52 billion, respectively
The concept of telehealth is nothing new. An 1879 article in the Lancet spoke about using the telephone to reduce unnecessary office visits and in 1925 the cover of Science and Invention magazine showed a doctor diagnosing a patient by radio. Inside, the article speculated that one day there would be a device that allowed for video examination of a patient remotely.
While telehealth has been used in a clinical setting for decades, the coronavirus pandemic has brought it to the forefront of many people’s minds, especially one aspect: telemedicine. As businesses shut down due to the COVID-19 pandemic, so too did many doctors’ offices in order to protect doctors and staff from contracting the virus from the patients. Despite the shutdown, patients still needed medical care. As a result, many doctors consulted with patients via online videoconference or phone calls. In April 2020, 43.5% of primary care physician visits by those insured by Medicare1 were via telemedicine compared to 0.1% in February 2020 before the public health emergency (PHE) was declared.2 Overall, 6% of primary care visits in the United States were via telemedicine before the PHE, and 30% after.
Telehealth refers to health information services, health care education, and health care services delivered remotely using technology. In addition to doctor-patient consultations, telehealth includes health education services, remote monitoring of vital signs, ECG, and blood pressure, and telecare. Telecare involves remote monitoring devices and medical alert systems that allow physicians to continuously monitor patients to track changes over time and be alerted to emergency situations. For the patients, these monitors allow them to maintain independence and safety while living in their homes.
Today’s market size shows global telehealth revenues for 2019 and projected for 2027. Data include both products and services, with services claiming more than half of revenues. Revenues in North America totaled $26.4 billion in 2019, nearly half of worldwide revenues. Increasing patient preference for online healthcare consultation due to its cost-effectiveness, reduced wait times, and easy access coupled with a growing number of insurance companies reimbursing health care providers for this service will contribute to significant growth in this region of the world. However, not everyone prefers telehealth visits. In a University of Michigan study of older adults, while an overwhelming majority were comfortable with videoconferencing and were interested in using telemedicine for follow-ups with their doctor, 64% of those that actually used telehealth services felt that the health care quality was not as good as an in-person visit (4 out of 5 people were concerned because the doctor couldn’t physically examine them).
In rural areas around the world where healthcare services are lacking, telemedicine is a way to bring these services to those who need them. Government initiatives and investment to improve health care in rural areas will fuel growth worldwide in the coming years. But hampering growth is the lack of infrastructure in many developing counties. Deploying telehealth technology requires the latest telecommunications technology and high-speed internet with high bandwidth and storage capacity. Hundreds of millions of people around the world still lack internet access, especially those living in rural, remote areas. In India, the country with the second-highest number of internet users also has the highest number of people without internet access, more than 685 million. More than 582 million people in China lack internet access. By region, Africa and the Asia-Pacific region have the lowest percentage of internet users, 28.2% and 48.4%, respectively.
The telemedicine segment had the highest revenues in 2019 and is expected to continue to dominate the market through 2027 as more doctors integrate telemedicine into their everyday practices, purchasing telemedicine software and virtual conference apps to do so. Established companies and a growing number of startups are bringing more telehealth software and remote monitoring devices to market as they expand their scope into solutions for various specialties such as mental health, dermatology, and cardiology, to name a few.
The continuous monitoring segment is expected to see significant growth over this time period due to an aging population, advancements in the integration of medical data, and increased availability of wearable remote monitoring devices. According to the American Telemedicine Association, one million people in the United States use remote cardiac monitors. But, not all monitors need to be applied in a medical setting. The newer versions of several smartwatches by Apple, Samsung, Fitbit, Withings, and Amazfit have the ability to take an electrocardiograph (ECG) to detect atrial fibrillation and abnormal heart rhythms. Some smartwatches also have the ability to monitor blood oxygen levels.3 While ECGs taken using a smartwatch may not be as accurate or be able to detect as many problems as ECGs done in a hospital, “irregularities in heart rate can be episodic, and difficult to capture…so a personal ECG that you carry with you can help clinicians record when palpitations happen and help with diagnosis,” according to Dr. Keith Grimes, Medical Director and pioneer in clinical VR and artificial intelligence at Babylon Health in London, U.K.
Teledoc Health Inc. is the leading company in the telehealth market owing to its large customer base and an increasing number of paid memberships and virtual doctor visits. Its virtual doctor visits between January 2020 and March 2020 increased 60% from the fourth quarter of 2019. In January 2020 it acquired InTouch Health, which gave it access to a network of more than 450 hospitals and healthcare facilities. It also acquired InTouch Health’s Solo, an end-to-end fully integrated virtual care platform. Other major telehealth companies include American Well, MDLIVE Inc., Doctor on Demand Inc., Dictum Health Inc., Grand Rounds Inc., and OpenTeleHealth. Except for OpenTeleHealth which is headquartered in Denmark, all the other companies are located in the United States.
1 Medicare is the federal health insurance program for people age 65 or older in the United States. People younger than age 65 with certain disabilities, permanent kidney failure, or amyotrophic lateral sclerosis (Lou Gehrig’s disease), can also qualify for Medicare. Those that qualify for Medicare are generally at high risk for complications from COVID-19. Data are for those that have Fee-for-service Medicare.
2 Before the PHE, covered telehealth services were limited for Medicare beneficiaries. Passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27, 2020, expanded the list of telehealth-eligible services, allowing for audio-only communications as well as expanding the types of practitioners eligible to provide telehealth services. Due to a waiver, as of March 6, 2020, telehealth services were allowed to be delivered wherever a patient is located, including in their home or a temporary health facility. Before, a patient needed to go to a health care facility to receive telehealth services from a distant practitioner. These visits were generally reserved for rural residents.
3 Apple and Samsung smartwatches have U.S. Food and Drug Administration approval for detecting atrial fibrillation. Approval is pending for Fitbit.
Sources:“Telehealth Market to Exhibit 25.2% CAGR till 2027; Rising Video & Audio Consultation with Physicians to Boost Growth,” Fortune Business Insights Press Release, July 29, 2020 available online here; “Telehealth Market Size, Share & COVID-19 Impact Analysis, by Type (Products and Services), by Application (Telemedicine, Patient Monitoring, Continuous Medical Education, and Others), by Modality (Real-time (Synchronous), Store-and-forward (Asynchronous), and Remote Patient Monitoring), by End User (Hospital Facilities, Homecare, and Others), and Regional Forecast, 2020-2027,” Fortune Business Insights Summary, July 2020 available online here; “What’s the Difference Between Telemedicine, Telecare and Telehealth?” eVisit available online here; “HHS Issues New Report Highlighting Dramatic Trends in Medicare Beneficiary Telehealth Utilization amid COVID-19,” U.S. Department of Health and Human Services Press Release, July 28, 2020 available online here; “Thriving in the Post-COVID-19 World—Key Areas of Focus,” IQVIA Consumer Health available online here; “Medicare,” Social Security Administration, November 2019 available online here; “Medicare Beneficiary Use of Telehealth Visits: Early Data from the Start of the COVID-19 Pandemic,” Issue Brief, Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, July 28, 2020 available online here; “List of Countries by Number of Internet Users,” Wikipedia, September 30, 2020 available online here; Carmen Ang, “These are the Countries Where Internet Access is Lowest,” World Economic Forum, August 17, 2020 available online here; Michael Sawh, “ECG Wearables: How They Work and the Best on the Market,” Wareable, August 28, 2020 available online here; Thomas S. Nesbitt, “The Role of Telehealth in an Evolving Health Care Environment: Workshop Summary,” Board on Health Care Services, Institute of Medicine, November 20, 2012 available online here.
Image source: National Cancer Institute, “Doctor Holding Cell Phone,” Unsplash, December 11, 2019 available online here.