As the pandemic moves from an acute phase to one where we learn to live with COVID-19 as an endemic presence, some entrepreneurs and investors may be following its impact on virtual medicine.
Nearly half of US states have ended emergency statutory exemptions introduced during the pandemic that allowed patients to be seen by doctors practicing elsewhere. For some, the end of these exemptions could herald daunting winds for telemedicine: a return to old regulations that kill the promise of new technology.
However, there is another thesis, one driven not by fear but by strategic vision, where the return of regulations could mean something far more beneficial to telemedicine startups and those invested in their success: protection and differentiation.
Telemedicine companies that research and understand the diverse patchwork of regulations, analyzing them to identify patterns and create scalable business models, will survive and thrive in the environment ahead. A complex future awaits those who do not give priority to this work, because patients will demand these new facilities. It could mean a shakeup.
Even with the return of regulation, the digital health opportunity will grow. While laws may change, the macroeconomic rule of supply and demand remains, and patient demand for health care far outstrips the supply of available physicians. This imbalance has only accelerated during the pandemic, as doctors and nurses reduced productivity, moved into less stressful roles, or dropped out of the field altogether.
On the demand side of the equation, there are more patients who need care. Due to aging Baby Boomers, low-cost health care plans, and the proliferation of affordable retail health care options, more people have access to care today than a decade ago.
On the supply side, telemedicine generates efficiency and access. While the rise of telemedicine may benefit doctors and nurses struggling with burnout — less need for in-person visits may lead to less stress, for example — this denominator in the equation may change. The growing incoming demand has outpaced and will continue to outpace the number of new physicians graduating each year.
These dynamics almost guarantee that telemedicine startups offering a quality user experience, more medically nuanced/specialized services, and a wider variety of virtual access points will continue to be in high demand.
Previously, telemedicine was reserved for academic medicine with broad restrictions on who could receive services and which providers could be paid to offer them. While less than 1% of medical services were provided via telemedicine in January 2020 in the United States, that number is now estimated to be 38 times higher than the pre-pandemic baseline. In fact, some startups were conceived, launched, and fully funded during the era of COVID-19 waivers.
Startups that gained traction at a time when the rules were relaxed will now have to improve their value proposition. Regulators expect that and patients deserve it.
Pressure is likely to mount in the form of regulatory clarity. Along with the number of digital health startups transitioning to virtual provider groups and online clinics, there are big players accelerating their digital transformation, reducing physical presence, and the rise of virtual care, including primary care.
No market player should be carried away by inaction in the face of temporary extensions of exemptions due to the crisis. Smart founders (and their investors) won't waste time launching or modifying a business that can thrive in an environment where regulations revert to pre-COVID standards.
It is a development that will allow telemedicine to mature from a convenient replacement in a crisis to earn its own place at the healthcare industry table as an essential player in the continuum of care.
