Investment Opportunities in Digital Health And Our Rapidly Changing Health Care Ecosystem
Telemedicine may just be the biggest trend in digital health in 2015. As a partner focused on digital health investments at venture capital firm AMV, I spend a lot of time crisscrossing the country chatting with leading healthcare providers and insurers about their technology needs. By far the area they are most interested in is telemedicine. For hospitals, expanding telemedicine is a way to cut costs while providing consumers with the convenience they crave. But the idea has been around for a while so why now?
For one, the technology around virtual consultations has finally matured to the point where doctors can offer a good experience. As Andrew Watson, Chief Medical Director of Telemedicine at University of Pittsburgh Medical Center, puts it “Telemedicine is moving like lightning. We’re able to do so much more than before.” Faster Internet connections and better software facilitate far smoother video chatting than in days past. With ubiquitous mobile devices, people can now access consultations from anywhere. And the advent of electronic health records has certainly increased the ease of going digital.
Additionally, telemedicine has expanded to include asynchronous messaging, which patients are increasingly more comfortable using and which truly allows doctors to better utilize their time. A single doctor can now advise many patients on routine issues, freeing up more time to focus in-person on trickier cases.
Most importantly, there is demand to harness the capabilities of these technological innovations. In the last few years, more and more patients have increasingly looked to retail pharmacies in their neighborhoods for routine healthcare services because it’s more convenient than visiting their doctor. The logical next step is that they won’t have to leave their homes at all.
At first, it seems that this convenience would appeal mostly to younger patients, who expect to be able to access services on the Internet, and it does. But the area where it will have the most impact may well be with older populations. Dr. Steve Ommen Associate Dean at the Center for Connected Care at the Mayo Clinic expects older patients to be enthusiastic adopters. “The fastest-growing demographic for social media is the 60+ group. They are not technology-averse and they have the greatest mobility challenge in terms of getting to a doctor. A telemedicine solution may be exactly what they need.”
And finally, from the provider’s perspective, telemedicine has the potential to both save a lot of money and increase the value of a doctor’s time. “Doctors right now spend a lot of time with patients who don’t need to be in the office,” says Dr. Ommen. “If we can change the way they interact with people who don’t need to be in the room, we can improve access for people who do.”
When implemented by hospitals, telemedicine also helps to keep consumers engaged with their primary care providers and integrated with their existing medical record. For example, Carolinas HealthCare System recently rolled out a virtual visit program that allows any of their one million eligible patients to access a provider at any time for a flat fee. The provider on the virtual consultation can see the patient’s medical record and their notes can be accessed by the primary care doctor and care team. As Dr. Greg Weidner, medical director of primary care innovation and proactive health as Carolinas, sees it, “We are able to provide convenience and simplicity, while compromising none of the benefits of carefully coordinated care.”
Providers say their biggest telemedicine hurdle is figuring out how to cover the cost. But because they are increasingly being paid for outcomes rather than procedures, they are incentivized to provide care in the most efficient way possible and telemedicine is cheaper than in-person care. And, with Medicare and Medicaid beginning to cover not-in-person consultations, reimbursement for telemedicine is also becoming more mainstream.
Thanks to startups like Doctors on Demand and HealthTap (one of our portfolio companies) telemedicine is already available to consumers nationwide. In the future, providers may partner with these platforms to connect their doctors with patients. Additionally, these apps could be offered through employers or insurance companies to help reduce costs or improve quality of care.
It’s true that the promise of telemedicine has been heard before, but this time I think it will take hold. Consumers are excited about the service and providers finally have both the financial incentive and technological capability to make it a reality. Not only am I interested in this trend as an investment opportunity, but also I believe that it will change the doctor-patient relationship for the better.