The acceleration of telehealth’s adoption and the accompanying relaxation of regulations have been some of the more positive outcomes resulting from the COVID-19 pandemic. The telehealth market was already looking at robust growth over the next five years, and the pandemic fast-tracked these trends.
The U.S. Department of Health and Human Services (HHS) approved the use of telehealth services as part of the Coronavirus Preparedness and Response Supplemental Appropriations Act, waiving some Medicare payment requirements, making telemedicine available to patients at home and allowing physicians to work across state lines. New HIPAA exceptions in the act also allow doctors to speak with patients through videoconferencing, among other changes.
The guidance in this act was intended as a temporary measure, but now that patients, providers, and insurance carriers have seen how the adoption of telehealth can impact care delivery, we think it will be tough to put the telehealth genie back in the bottle. Telehealth is now part of mainstream healthcare. We believe it is here to stay and will be a boon to investors in the space.
COVID-19 has driven a material increase in telehealth visit volume over the past several months. Teladoc, a leading telehealth platform, has reportedly onboarded thousands of physicians in a fraction of the time it would have taken them to achieve the same level of adoption before the pandemic.
A robust telehealth offering is likely to become an essential component of the health benefit offering for employers. Driven by a new normal of social distancing and lack of certainty for the future, remote services are in especially high demand within the behavioral health, dermatology, post-acute care, and opioid/addiction therapy spaces.
Investor interest in the telehealth industry remains strong despite uncertain regulatory dynamics going forward. While the industry has been deregulated in the short-term and reimbursement dynamics have shifted, regulators may attempt to reinstate old restrictions, making it more difficult to implement telehealth in the future. We expect these attempts to be mitigated, however, by strong consumer demand and intense pressure from companies and practitioners to continue the broader use of telemedicine.
Telehealth leapt to the forefront of Medicine in an astonishingly short period of time. It’s incredibly rewarding to see these technologies actually improve and save lives—particularly in environments where there has been a shortage of care due to geography or cost.
About Kevin Cable, Managing Director, Digital Health and Healthcare Services
Kevin Cable is co-founder and Managing Director of Cascadia Capital. He founded the firm’s Healthcare & Digital Health practice drawing from a deep history in software, analytics, big data, and consumer applications. Kevin focuses on a broad spectrum of transactions, including equity private placements, M&A mandates, recapitalizations, and buyouts. Having built a career split equally between operating companies and investment banking, he brings a grounded and balanced perspective to help companies achieve their transaction goals.