Beyond the Clinic Walls

During the COVID-19 pandemic, telemedicine emerged as an indispensable resource to improve the surveillance of patients, curb the spread of disease, facilitate timely identification and management of ill people, and guarantee access and continuity of care for patients with multiple chronic diseases. COVID favored the rapid and accelerated adoption of digital solutions and advanced technology in healthcare such as AI, big data analytics, mobile tracing apps for surveillance (source: NIH). As a result, telehealth went from underutilized to a necessary care avenue seemingly overnight.

Now past peak crisis, the convenience and comfort of telehealth for managing nonurgent routine care, mental health, and chronic disease is too good to revert back to exclusively in-person appointments. McKinsey estimated that $250 billion of U.S. healthcare spending has the potential to be virtualized. As such, it’s no surprise that some suggest the market will grow from $50 billion to over $460 billion by 2030 (source: Forbes).

This piece will help level set on how telehealth emerged as a medium of care, how it is driving impact and introducing new complexities in healthcare, and what trends may emerge in 2024 and beyond. And if you’d like to learn more on this topic, please join our webinar.

Historical Overview

The history of telehealth is much older than the pandemic, dating back over a century. Pinpointing where and when telehealth began depends on how you define it. Some could make a case it began hundreds of years ago when Europeans sent information about the bubonic plague by smoke signals or heliographs. For the purposes of this discussion, we’re defining telehealth as the use of telecommunications technology to provide and exchange medical information and services.

Given that definition, we see some of the earliest examples involved the electric telegraph. A famous use of the tech was revolutionizing communication during the Civil War, paving the way for remote wartime medical communication. Alexander Graham Bell’s telephone patent in 1879 marked another monumental step, allowing medical professionals to consult remotely. The late 19th-century saw the telephone’s use streamline medical office visits. The early 1900s introduced radio communication, with Australia’s Aerial Medical Service in 1928 using telegraph and radio to provide healthcare in remote areas.

By the mid-1950s, closed-circuit television at the Nebraska Psychiatric Institute allowed remote patient monitoring, while the 1960s saw NASA pushing telehealth boundaries with space travel experiments. Federal funding in the late 1960s and early 1970s catalyzed telemedicine research, with initiatives like STARPAHC (Space Technology Applied to Rural Papago Advanced Health Care) leveraging technology developed for space travel to address rural healthcare challenges. And finally, the internet transformed telehealth by enabling efficient data transmission and cost-effective solutions, shaping the contemporary telehealth landscape.

Telemedicine has also been used in day-to-day practice for decades in clinical settings. Alaska, for example, has been a model for the development and use of telemedicine. Community health aides in small villages could perform otoscopy and audiometry, and the information was sent to specialists in Anchorage or Fairbanks to make the determination of whether a patient needed to travel to the specialist for more definitive treatment. Today, we think of office-based telemedicine as flat-screen, high-definition units that can aid in physical examination of the patient. Although impressive, the industry has a long way to go before telemedicine becomes as ubiquitous as the telephone (source: NIH).

Current Technologies & Approaches in Telehealth

Telemedicine allows healthcare professionals to exchange medical data, conduct virtual consultations, make diagnoses, administer treatment, monitor patients’ health, and prescribe medications — transcending geographical barriers.

While telehealth has the ability to reshape healthcare delivery, it requires a complex set of tools and software to enable remote clinical services across medical specialties. Here are the three main types of telemedicine.

• Store-and-Forward (Asynchronous): This approach facilitates medical consultations without real-time interaction. Instead, it relies on patient records and imaging reports, saving time for both patients and physicians. Example AV portcos: Health Note, InsiteFlow.
• Real-Time E-Visits (Synchronous): In this instance, virtual visits occur through videoconferencing. It’s like traditional face-to-face consultation but conducted remotely, providing immediate care when necessary. Example AV portcos: Brave Health, Clarity Pediatrics.
• Remote Patient Monitoring (RPM): This approach involves healthcare professionals remotely overseeing patients using telemedicine equipment and wearable sensors. The method aids in chronic disease management, benefitting patients with conditions like diabetes, heart disease, and cancer. Example AV portcos: Blue Note Therapeutics, Swing Therapeutics.

In addition to these designations, there is also segmentation by condition and care. Today, companies are building solutions that are

• Horizontal: Multiple conditions within one type of care; and
• Vertical: One condition across all three types of care.

Regardless of the initial go-to-market strategy, we expect nearly all patients and providers to embrace or be impacted by telemedicine in the coming years.

The Big Players in Telehealth

In the dynamic landscape of telemedicine, three distinct player categories emerge: GAMMA (Google, Amazon, Meta, Microsoft, Apple) tech giants, large healthcare incumbents, and specialized providers. The GAMMAs have been telemedicine pioneers since 2008, with a variety of strategic approaches.

Google Health leverages its data and AI prowess to enhance healthcare information access for medical professionals (e.g., Google’s Med-PaLM “AI Doctor”). Alphabet invests in telehealth companies like Sesame (also an AV portfolio company) through its venture capital arm, GV.

Likewise, Apple has stayed involved through its investment in digital health tools such as the Apple Watch trackers and the Apple Health app.

Amazon and Microsoft, on the other hand, have made major investments in Anthropic and OpenAI in an effort to both bet on generative AI and drive positive tailwinds towards their healthcare ambitions. Amazon’s partnership with Anthropic is anticipated to accelerate healthcare AI initiatives on AWS, with possibilities for integrating Anthropic models into applications like Amazon Clinic, One Medical, and Pillpack.

As for the major incumbent telehealth players — Amwell, Teladoc Health, Included Health — though they have dominated the U.S. sector, they increasingly face pressure as new entrants rush in with more specialized virtual care platforms. In some cases, this has produced innovation. For example, Teladoc recently partnered with Microsoft to integrate AI and ambient clinical documentation tech into its virtual care platform. Offering solutions that better support the clinical workforce and minimize administrative burden by automating clinical note-taking are key priorities among Teladoc’s hospital and health system customers.

Finally, “new” entrants or specialized providers like Ro and Capsule have carved out niches for themselves. U.S. online pharmacy Capsule raised over $600 million in seven years. Ro — specializing in sexual health, weight loss, and fertility — has secured $1 billion since 2017. This funding helps fortify their positions in direct-to-patient care, reflecting the ongoing consolidation in the telehealth sector.

Future Trends

For both providers and investors, success depends on being at the forefront of what’s next in telehealth and integrating the technology necessary to compete. Here’s some of the technology on the horizon for telemedicine. 

• EHR-embedded Telecare: Electronic Health Records (EHRs) have become the backbone of modern healthcare, providing streamlined interoperability and efficient patient file management. Telehealth solutions that seamlessly integrate with EHRs help clinics effortlessly transfer patient records and update data in real time (e.g., athenahealth). This enhances care delivery and empowers patients to handle administrative tasks, such as filing insurance claims, from the comfort of their homes.
• AI: AI applications abound In telemedicine, from chatbots providing real-time assistance (e.g., Teledoc’s partnership with Microsoft to bring voice tech into telehealth visits) to high-quality analytics. AI-driven telehealth solutions will not only improve data quality but also unlock actionable insights, shaping the future of personalized medicine.
• AR/VR: Augmented Reality (AR) and Virtual Reality (VR) are finding applications in surgery, rehabilitation, and education. Today, companies have leveraged AR/VR for distance teaching, surgical simulations (e.g., Vicarious Surgical), and patient engagement.
• 5G: The advent of 5G technology in telemedicine promises faster connection times, enhanced streaming quality, and improved online consultations. With speeds exceeding 20 Mbps per users, 5G facilitates uninterrupted remote patient monitoring. Medical device manufacturers such as Philips, GE Healthcare, and Medtronic, as well as consumer electronics companies like Apple and Samsung, have produced 5G-enabled devices, wearables, and sensors for healthcare applications.
• Internet of Medical Things (IoMT): COVID-19 increased the need for continuous monitoring of health conditions. IoMT devices connect patients, doctors and medical devices — including hospital equipment, diagnostic gear, and wearable technology — by transmitting information over a secure network. Much like general IoT devices, IoMT uses automation, sensors and machine-based intelligence to reduce the need for unnecessary doctor and hospital visits. Popular examples include consumer-grade wearables like Fitbit and point-of-care devices like Butterfly Ultrasound.

Impact of Telemedicine

Telemedicine’s primary strength is its ability to provide immediate medical support, overcoming obstacles related to distance and infrastructure. By leveraging communication techniques such as video, text, and online translation, telemedicine has made healthcare more accessible and efficient while positively impacting patient outcomes (source: BioMed Central).

• Enhancing patient engagement and experience: Through telehealth, clinicians have extended their reach to remote patients, enabling them to manage a higher patient load vs. traditional care models. This access fosters collaboration between physicians and patients — particularly in home and hospice care settings — promoting patient engagement, independence, and compliance. A recent analysis of EHR records found that patient portals improved patient safety, medication adherence, and patient-provider communication (source: NIH).
• Cost-effective healthcare delivery: From a healthcare organization perspective, telemedicine offers a cost-effective solution, reducing healthcare expenditures by curbing medication misuse, unnecessary ER visits, and prolonged hospitalizations. It also streamlines data flow across health records and enhances care coordination among providers at disparate locations. According to a recent JAMA publication on using telehealth among cancer patients, the estimated mean total cost savings per visit ranged from $147-$186.
• Breaking geographical barriers: Telemedicine’s impact extends beyond urban centers, improving access to care for all patients, regardless of location. Specialties such as dermatology, cardiology, pediatrics, psychiatry, neonatology, and neurology benefit from telemedicine capabilities. Nearly 80% of hospitals in the U.S. connect doctors and patients remotely via telehealth, up from 35% a decade ago (source: Harvard Health).

Challenges & Limitations

Despite its potential to revolutionize healthcare accessibility, barriers to widespread adoption of telehealth persist. Issues like inadequate reimbursement, licensing complexities, and resistance to change have hampered integration. Drawbacks include the challenge of making diagnoses without physical examinations, raising concerns about patient safety and diagnostic accuracy. While telehealth providers have developed virtual physical exams and methods to combat misdiagnosis, technical obstacles, security breaches, and regulatory hurdles remain.

Critics argue that telehealth may disrupt continuity of care, with online interactions perceived as impersonal and alienating. Moreover, unequal availability of broadband — especially in rural areas and among various demographic groups — exacerbates health disparities and has left tens of millions of people in the U.S. with a significant barrier to telehealth. The COVID-19 pandemic exacerbated these challenges, making it more difficult for affected communities to access essential care (source: BioMed Central).

As a result, the U.S. federal government made more than $100 billion available (via the Bipartisan Infrastructure Bill) to close the digital divide. States were encouraged to leverage federal funding to build broadband infrastructure, provide devices, and implement digital literacy programs to improve healthcare delivery (source: McKinsey). With an influx of capital, we expect healthtech companies to broker partnerships with state and local governments.

Concluding Thoughts

The COVID-19 pandemic catapulted telehealth from an underutilized resource to an essential pillar in healthcare delivery. As telehealth becomes ingrained in the patient experience, trends like EHR-embedded telecare, AI-driven solutions, AR/VR applications, and more present exciting opportunities. The impact of telemedicine is poised to redefine the industry, offering unparalleled opportunities for patients, providers, healthcare organizations, and investors.

For a deeper dive into these trends and the companies scripting telemedicine’s future, please join our webinar.