- Spurred by the COVID-19 pandemic, investments in telehealth reached a record $5 billion in the second quarter of this year, according to a new report by CB Insights. The investments are more than double what they were in the second quarter of 2020. Six telehealth firms also reached unicorn status.
- However, it appears the sector is reaching a level of maturity. According to CB Insights, late-stage investments outpaced money going into early-stage deals. Moreover, investor exits also reached a record high.
- Investments in traditional telemedicine platforms also saw an investment decline, with virtual care, remote monitoring and telepharmacy reaping growing shares of investments. Nevertheless, providers are still investing heavily in telemedicine to improve the experience for their patients.
It's currently telehealth's day in the sun. With a large portion of the world eschewing face-to-face contact in 2020 due to the COVID-19 pandemic, millions of patients flocked to telehealth for their care needs. Large companies such as Amazon also heavily invested in telehealth pilot programs for its employees.
Overall, global telehealth investments increased 169% from the second quarter of 2020, and were up 17% from the first quarter of 2021. The five largest deals were worth $1.6 billion, out of roughly $5 billion in total.
The CB Insights report also noted that there has been a shift in the way money is flowing into the segment. The teletherapy, coaching and care management segments accounted for 40% of all deals during the quarter. Meanwhile, investor exits from telemedicine platforms hit a record, while funding declined 43%. There was a similar level of activity for virtual and digital care enablement.
Nevertheless, traditional providers are still moving into the virtual space. About 60% of healthcare organizations are adding new digital initiatives, while 42% are accelerating some or all of their existing digital transition plans. And 75% say they are currently investing in telemedicine to improve their patient experience. That compares to 42% in 2019. The level of attention being paid to telemedicine by providers is currently higher than investments in EHR interoperability and patient portals and messaging systems.
Meanwhile, CB Insights has concluded that the use of telemedicine is stabilizing for the longer term. They comprised about 5% of medical claims as of April of this year, compared to 7% in January. The figure is similar to September of last year, as the pandemic hit a trough after its initial first waves.