What’s next for on-demand telehealth companies?
Telehealth companies are increasingly positioning themselves as part of preventive and routine patient care, moving beyond their initial on-demand urgent care models and into businesses that dovetail with emerging patient preferences.
As telehealth visits skyrocketed during the COVID-19 pandemic, it exposed patients to a new form of healthcare: video visits with their own doctor. For years, surveys have suggested patients would be more willing to use telehealth services if they could connect with a provider they already knew, rather than one they’re not familiar with.
Most recently, a survey from Vizient found patients indicated being more likely to receive telehealth from an existing provider, rather than a new provider. That mirrors a 2017 study that found patients were more willing to see their own provider via telehealth.
“There was always a preference,” said Jailendra Singh, a healthcare technology analyst with investment bank Credit Suisse. “During COVID, (patients) got that flexibility.”
Some surveys have even suggested patients are willing to pay more for a telehealth visit with their own doctor.
Patients indicated they’d be willing to pay $56 to $92 in out-of-pocket costs for a primary-care visit with their own doctor, compared to $47 to $75 for a primary-care visit with an online-only provider, according to a 2020 report from the Healthcare Information and Management Systems Society. That preference varied by age, with older generations more likely than younger generations to say online-only providers should cost less than their own provider.
Telehealth companies in recent years have made moves to capitalize on the demand, selling their technology directly to hospitals and health systems and launching services that establish ongoing relationships between patients and online-only primary-care doctors.
Amwell got its start providing on-demand virtual care for low-acuity health issues. But the company always planned on transitioning to primarily building the technology clinicians use to connect with their own patients, rather than providing healthcare services, according to Dr. Ido Schoenberg, the company’s co-founder and CEO. Last year, Amwell went public with a $100 million investment from tech giant Google.
In the next five to 10 years, Schoenberg expects revenue from the company’s Amwell Medical Group to be “dramatically smaller than it is today—or maybe zero, at some point.”
Amwell’s health system and health plan customers’ own clinicians accounted for 73% of visits conducted on its platform in 2020’s third quarter, its most recent posted earnings. In 2019’s third quarter, Amwell Medical Group had comprised 62% of visits.
“The real promise of telehealth and digital connectivity is to connect the existing players in the ecosystem,” Schoenberg said.
Pediatric Associates, a primary care pediatric practice in Florida, uses Amwell’s technology, but all of its telehealth visits are with the practice’s own clinicians.
The group, which launched telehealth services in 2016, today offers patients on-demand telehealth visits for low-acuity conditions, as well as scheduled telehealth appointments for well-child visits and some chronic care. About 30 of its providers are dedicated to only seeing patients via telehealth.
“What we’re providing is continuity with our patients,” said Scott Farr, chief operating officer at Pediatric Associates.
Dr. Todd Czartoski, chief medical technology officer at Renton, Wash.-based Providence, said now that patients and providers have become comfortable with telehealth, he expects to see more healthcare organizations offering patients virtual visits with their own clinicians. Telehealth won’t be separate from in-person care, but another option for maintaining that same patient-physician relationship.
Providence currently offers telehealth visits with its clinicians for scheduled appointments and on-demand urgent care.
“You’re going to see is a lot more healthcare organizations maturing their own provider networks,” Czartoski said.
Gaps in primary care
But a telehealth-only relationship doesn’t have to mean an unfamiliar provider. At least, that’s what telehealth companies are betting on.
A handful of insurers and employers have begun partnering with telehealth companies including Amwell, Doctor on Demand, MDLIVE and Teladoc Health to offer virtual primary care services, in which a patient has a regular primary-care physician who they only see via telehealth. The programs tend to use providers from the telehealth companies’ medical groups.
That could be a boon for millennials and Gen Zers, who are less likely to have a regular primary-care physician compared with baby boomers and Gen Xers.
That’s one of the populations Teladoc is targeting for its virtual primary care program—patients “who don’t already have a strong primary-care relationship,” said Dan Trencher, senior vice president of corporate strategy at Teladoc.
Younger patients have voiced interest in regularly seeing online-only doctors.
While 85% of baby boomers said they’d prefer to see their own provider, either in-person or virtually, for their next healthcare visit, 56% of Gen Zers said they’d prefer to see an online-only provider, according to the HIMSS report. Millennials were split nearly 50-50 on whether they’d prefer to see an online-only or familiar provider.
Teladoc also has been building up its hospital and health system business for the past few years.
The company, founded in 2002 for on-demand virtual urgent care, really started selling its technology to hospitals and health systems about five years ago, according to Trencher. To bolster its presence in the market, last year Teladoc acquired InTouch Health, a telehealth company that serves healthcare providers.
Teladoc in a presentation at this year’s virtual J.P. Morgan Healthcare Conference said 10.6 million visits in 2020 were conducted through the company’s network of providers. Another 3.5 million were completed on Teladoc’s technology, but with clinicians from the company’s provider clients.
“I certainly expect both of those numbers to continue to grow very quickly over the years,” Trencher said. “I don’t think I can project a change in mix or ratio between the two.”
Mindy Heintskill, chief growth officer at MDLIVE, said in 2021 the company plans to “double down” on virtual primary care, a service it launched for health plans and employers last year.
She pointed to MDLIVE’s recent growth in visits, up 80% in 2020, as indicating many patients aren’t hesitant to meet with an online doctor, particularly with increased awareness as a result of the pandemic. And behavioral health visits, where 80% of visits are from repeat patients, saw 500% growth in 2020—suggesting continuity of care can happen virtually, she said.
“We’re not looking to replace a loyal PCP relationship,” Heintskill said. “We’re looking to fill where there are gaps.”
When considering patient preferences, it’s not as simple as virtual versus in-person care or a familiar versus unfamiliar doctor, experts said. There are likely specific circumstances in which patients prefer one over the other.
For low-acuity conditions like headaches, stomach aches or other issues where a patient might seek out urgent care, patients likely won’t be worried about whether they’re seeing their own doctor or someone else—they want to see someone quickly and conveniently. So on-demand virtual general health assessments and urgent care will likely coexist with scheduled telehealth visits offered by traditional healthcare providers, Singh said.
“The objective is different,” Singh said. “In several situations, people don’t care whether they’re talking to their doctor—they just want to see some doctor.”
Nearly half of all patients who had a reason to seek healthcare during the pandemic used either audio- or video-based telehealth services, according to survey that policy think tank RAND Corp. conducted in May and published last month. The vast majority of patients who used telehealth said their visit was with a provider they had seen before.
That’s a marked difference from a survey RAND Corp. conducted in early 2019 and published last year, when only 4% of patients had ever used a video visit, less than half of whom had seen their own provider. Forty percent of patients who had never had a video visit cited their provider not offering the capability as their reason for not using telehealth.
“It was a huge shift,” said Dr. Shira H. Fischer, a physician policy researcher at RAND Corp.
RAND Corp.’s survey hasn’t asked about patient preferences, but Fischer said they are planning to conduct a survey to tackle that question in March—trying to tease out whether there are certain situations in which patients feel comfortable or even prefer an in-person visit over a telehealth visit, and vice versa.
“Much of the research in the past has been very dichotomous,” asking patients if they prefer telehealth or in-person visits and whether telehealth is better or worse than in-person care, rather than looking at specific telehealth use cases or combinations of in-person and virtual care, Fischer said.
“That’s a not nuanced way to look at it,” she said.