MARKET TRENDS POINT TO CONTINUED TELEHEALTH EXPANSION

September 28, 2022

Telehealth was an emerging topic pre-pandemic with various thought leaders and tech companies advocating for its (now proven) significant benefits to patients, clinics, and major health systems across the United States and throughout Europe.?

The Covid epidemic was an igniting force behind the explosion of telehealth that is now, according to the McKinsey report, projected to cause a $250B shift in healthcare spending; telehealth is a disrupter in a very positive manner for patient care. Telehealth is shifting the traditional healthcare model and positively impacting patient lives in both urban and rural settings, offering access to care that many previously could not attain.?

The American Medical Association reports that the percentage of physicians using tele and virtual visits grew from 14% in 2016 to 80% in 2022 alone. These figures may have been influenced by the current adoption trend of Universities and health systems across the United States that are implementing telehealth into both their internal systems and their academic offerings. Institutions such as Harvard, Stanford, and the University of Virginia are spearheading telehealth implementation, and investments into telehealth companies by private investors and venture capitalists continue to trend upward.

According to Katya Andresen, Chief Digital and Analytics Officer at Cigna, their internal research shows that availability and access to virtual health have become increasingly important, and in her article, she cites another study “that shows 76% of people are interested in using telehealth, compared with just 11% who used telehealth in 2019. Even after the pandemic ends, 83% of patients expect to use virtual care. Sixty percent of consumers’ most recent mental health visits were via telehealth.”?

The McKinsey Report presents the following stats on the post-covid state of telehealth:?

• Consumer and provider attitudes toward telehealth have improved since the pre-COVID-19 era. Perceptions and usage have dropped slightly since the peak in spring 2020. Some barriers—such as perceptions of technology security—remain to be addressed to sustain consumer and provider virtual health adoption, and models are likely to evolve to optimize hybrid virtual and in-person care delivery.?
• Some regulatory changes that facilitated expanded use of telehealth have been made permanent, for example, the Centers for Medicare & Medicaid Services’ expansion of reimbursable telehealth codes for the 2021 physician fee schedule. But uncertainty still exists as to the fate of other services that may lose their waiver status when the public health emergency ends.?
• Investment in virtual care and digital health more broadly has skyrocketed, fueling further innovation, with 3X the level of venture capitalist digital health investment in 2020 than it had in 2017.?

Virtual healthcare models and business models are evolving and proliferating, moving from purely “virtual urgent care” to a range of services enabling longitudinal virtual care, integration of telehealth with other virtual health solutions, and hybrid virtual/in-person care models, with the potential to improve consumer experience/convenience, access, outcomes, and affordability.??

McKinsey also illustrates that Psychiatry and Substance Use Disorder fields have seen the greatest increase in telehealth usage, but the spike is also being seen by chronic care providers in multiple specialties including endocrinology, rheumatology, and neurological medicine.

With rapid advancements in technology, the terms “telehealth” and “telemedicine” in 2022 goes far beyond just virtual video visits. “Telehealth” now encompasses several different treatment modalities including Digital Electronic/ Management, Remote Patient Monitoring (RPM), and Remote Therapeutic Monitoring (RTM), to name a few subsets. Health Recovery Solutions defines the difference in two of these newer areas (RPM & RTM) in this fashion: “RTM will monitor non-physiologic data, unlike RPM which monitors physiologic data.” In short, RPM does not limit the provider to health conditions while RTM specifically focuses on musculoskeletal and respiratory system statuses.

Most providers and clients we work with want to know about Medicare’s policy around telehealth and virtual health options. CMS recognizes that “therapeutic” data is an important category of patient information that can be accessed remotely. The new RTM codes are designed to collect and bill non-physiological or therapeutic data such as therapy and medication adherence, therapy and medication response, and pain level. On the other hand, the RPM codes can be used only in combination with tracking physiologic data (e.g., heart rate, blood pressure, and blood sugar levels).

The PainScript platform is Digital E/M, RPM, CCM and RTM compliant, offering providers a solution that fits multiple patient populations and virtual needs with a potential billable benefit. On all of our demonstration calls, we are asked about the potential for a reimbursement benefit. We have invested significant amounts of time speaking directly with private and commercial payers to understand their specific needs and required language for billing and reimbursements. Billing is always a clinical decision and we work closely with our clients to help them understand and navigate the laws and requirements for each payer.

This, combined with the copious amounts of data emerging about telehealth, including PainScript’s recently published peer-reviewed Observational Trial, are the reasons that investments in telehealth companies are on the rise and continue to accelerate. CB Insights states, “During Q2’21, 6 telehealth companies joined the unicorn club…and there are now 27 telehealth unicorns valued in aggregate at $55B.” Rock Health’s H1 2021 digital health funding report extrapolates on this, sharing that “the total venture capital investment into the digital health space in the first half of 2021 totaled $14.7 billion, which is more than all of the investment in 2020 ($14.6 billion) and nearly twice the investment in 2019 ($7.7 billion) (Exhibit 4). This increase would reflect an annualized investment of $25 billion to $30 billion in 2021 if this rate continues. In addition, total revenue of the top 60 virtual health players increased in 2020 to $5.5 billion, from around $3 billion the year before.”

Not a numbers person? Retail giants in the United States appear to be betting big on telehealth as well, even amidst uncertainty in the regulatory future. Walmart Health and Amazon Care have both signaled their plans to expand virtual care throughout the country. Best Buy spent nearly $400 million to acquire Current Health, a remote patient monitoring company. Google shelled out $2.1 billion for fitness tracking giant Fitbit. Tech startup Whoop, which makes wearable fitness tracking technology, raised $400 million to date, with a $3.6 billion valuation.

At PainScript, we are proud to offer a solution that is already providing improved healthcare for patients while simultaneously offering physicians an affirmative litigation defense with our Ruan v. United States compliant documentation system. We will continue to monitor policy and payer trends as we navigate this exciting and beneficial marketplace expansion.