Despite skyrocketing virtual care adoption, the telehealth sector still faces challenges, like mounting deal sizes and IPOs giving rise to concerns about a digital health bubble, and a decidedly hazy regulatory future.
But experts at the third annual HLTH conference this week argued that rampant tech integration during COVID-19 isn't going to be rolled back after the pandemic goes away, though the eventual makeup of the industry and its reach is still being hammered out.
"The effective application of technology and data to healthcare is the foundation for efficient healthcare, but has so far failed to deliver on its potential," Charles Kennedy, managing partner of Blue Ox Healthcare Partners, said in a Thursday keynote.
While not exclusive to telehealth, digital health funding shattered records this year, with a historic $9.4 billion raised through the third quarter, according to Rock Health.
And tailwinds have also given rise to increasing M&A. Virtual care giant Teladoc bought Livongo, a chronic care management company, for $18.5 billion in the digital health sector's first megadeal in August. The two companies announced their first combined sale, to large health plan Guidewell Health, at HLTH on Monday.
Many experts say the influx of funding and interest is long overdue. But some wary Wall Street insiders argue health tech and virtual care are overhyped, fearing that large exits are unsustainable and investors are pumping way too much money into the sector.
A pervasive hypothesis remains, that technology in healthcare is a nice idea, but healthcare is a services industry at the end of the day, Aneesha Mehta, principal at Bain Capital Ventures, said at HLTH on Thursday. Few in telehealth argue, for example, that the video visits will replace in-person healthcare entirely.
"There is going to be this gap, and there are some gaps where telehealth can't replace the one-on-one, face-to-face interaction," Angela Williams, CEO of disability nonprofit Easterseals, said on Thursday. "That just really stands out when it comes to senior care, patients with Alzheimer's and dementia. There's no substitute."
Additionally, some experts point to how utilization has moderated somewhat as COVID-19 cases dropped in the U.S. According to data from EHR giant Epic, telemedicine visits accounted for 21% of total encounters by the middle of July, down from 69% at the initial peak of the pandemic in April.
However, some predict utilization will tick back up as the coronavirus resurges in the fall and winter months. More than 30 states reported more COVID-19 cases this past week than the week before, according to Johns Hopkins University data.
And many experts agree, even after the pandemic subsides, rising consumer acceptance of and demand for digital healthcare means investing in virtual care isn't a bad bet.
"I don't think we're in a bubble," Mehta said, citing the seven health tech IPOs this year (including one from telemedicine giant Amwell) as evidence the sector is still in the first inning of technology adoption. "We'll see many more like them in the years to come."
Capitalizing on this interest, digital health companies are increasingly looking to build out products and use cases to market themselves as an end-to-end partner for payer, provider and employer customers.
Virtual tools for mental and behavioral health, for example, are seeing rapid growth as the pandemic highlights conditions like depression and anxiety. Startups and established players alike are also looking at chronic condition management, seeing an opportunity to address the largest driver of U.S. healthcare spend.
Digital tools can be a facilitator of access, especially for underserved populations and for stigmatized conditions like mental health, experts argue.
But it's "crucial for digital tools to prove efficacy," especially when dealing with higher acuity needs, Duke University professor Durali Doraiswamy said at a Tuesday panel. "You don't want a hotline that doesn't work, or an algorithm that's flawed ... it's not really machine versus man, it's really about how we can integrate the two together."
And the industry has not yet figured out how to get telehealth to the populations who need it most, experts say. It's a systemic issue — much has been said about virtual care's potential to increase access to underserved groups, such as patients in remote rural areas, but those areas usually lack the broadband needed for a high-quality video connection.
Meanwhile, the regulatory future is uncertain. Though telehealth boasts bipartisan support, many of the rule flexibilities that helped adoption to skyrocket starting in March are only temporary, and the most meaningful changes, like removing geographic site restrictions, would require congressional intervention.
Some major vendors are getting antsy with the perceived lack of inaction.
"Telehealth, in the perception of regulators, is something that’s trying to catch up to doing the exact same thing we did in person. Which is fundamentally false," Amwell CEO Roy Schoenberg said at HLTH on Tuesday.
Some in the industry are advocating that telehealth and in-person services be reimbursed at the same level following the pandemic, arguing parity would reduce the costs of operating brick-and-mortar locations, saving doctors (and the system) money overall.
But it's unlikely, due to concerns telehealth could be used before or in addition to similar physical services, not in their place, and could actually raise spending if implemented in a mostly fee-for-service system.
There's reimbursement tension there, between patients thinking digitally delivered care should be cheaper, while providers generally have fixed costs, experts say.
"I agree this is a huge opportunity to bend the cost curve ... but it has to go along with a commensurate shift toward risk. Otherwise, it could be inflationary, not deflationary," Mario Schlosser, CEO of millennial-focused payer Oscar Health, said Tuesday.
CMS has added dozens of new telehealth codes to Medicare coverage this year, but the large majority are not permanent. The agency did move to permanently codify Medicare coverage for a handful of telehealth services in its proposed physician payment rule for 2021, but notably excluded services delivered on an audio-only basis.
That could restrict access for needier populations, experts said at HLTH. Even in Medicare, more than a fourth of beneficiaries don't have access to a computer with high-speed internet or a smartphone with a wireless data plan, making a landline call one of the few options for remote care.
"It's super important our policy system realizes that is an important way for us to deliver care," Krishna Upadhya, senior medical advisor for Planned Parenthood, said on a Thursday panel.
A number of bills in Congress would keep up the telehealth momentum and address some of these challenges, including the bipartisan Protecting Access to Post-COVID-19 Telehealth Act. But it's unlikely industry will see any near-term movement amid the election.
And telehealth — and the healthcare industry more broadly — is still finding that balance between analog and digitally delivered care, even as the home starts to become a more pivotal care setting for the consumer and hospitals and doctor's offices continue to struggle with COVID-19 headwinds.
"There's a collective realization in the industry that the future will not look like the past," Aashima Gupta, director of healthcare at Google Cloud, said. "Recovery is gradual, but many healthcare organizations are beginning to reimagine what care will look like in the future."