Telemedicine—like other industries where digitization of service has transformed an entire ecosystem—is dramatically changing health-care delivery. Many large integrated health systems view telemedicine as an opportunity to more affordably provide primary care. The technology allows patients to be examined virtually using two-way video conferencing for a wide array of symptoms, often for very low fixed fees. Frequently health systems are partnering with telemedicine providers to build out a digital front door to patient care.
One of the most prolific businesses in the telemedicine field is Teladoc, a publicly traded company with a global presence. Teladoc offers two business models: direct-to-consumer and partnerships with health systems, health plans or employer groups. Teladoc and other telemedicine providers generally want to deliver enhanced access to consumers at a lower price. In a survey of 2 million of its members, Teladoc found that each member saved $472 on average per general medical visit using the technology, the company disclosed in its 2018 annual 10K filing with the SEC.
Beyond cost savings
Besides reducing the financial burden for global health care, telemedicine could also help solve the growing issue of provider burnout by leveraging technology to reduce the workload of providers offering services in physical locations. Some telemedicine providers have already expanded beyond standard care to tackle behavioral health services, providing additional value for the health care system.
The investor community has recognized the value of players such as Teladoc. Teladoc’s stock is up more than five-fold since its low of $9.50 on March 28, 2016, to close at $58.09 on the NYSE on Tuesday. Investor enthusiasm is bolstered by the company’s increase in annual visits, its continued expectation for growth and its expansion of CMS’s virtual care programs. According to Grand View Research Intelligence, the global telemedicine market has the potential to grow to $113.1 billion by 2025, however it is now only roughly a $1 billion market, according to Bloomberg Intelligence. There is plenty of room for providers to expand their reach in this somewhat unsaturated space.
