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Telehealth: The Evolution of Medicine

Bain Partner Laila Kassis outlines how the Covid-19 pandemic has drastically accelerated telehealth services in the US.

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Telehealth: The Evolution of Medicine
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Before the pandemic, telemedicine options for patients were limited, with many barriers preventing their widespread adoption. That all changed in the wake of Covid-19. Laila Kassis, a partner with Bain's Healthcare practice, discusses how payers, providers and regulators removed barriers to telehealth options as the pandemic surged in the US and reviews the long-term outlook for this growing segment of healthcare.

Read the transcript of the video below:

LAILA KASSIS: Prior to the Covid-19 pandemic, telemedicine was a small but growing market. Restrictive regulation and payer policies kept most providers out of telemedicine. And consumers only gradually got access to the offering, and it was primarily comprised of urgent care type "see any provider" visits. Most commercial plans eventually offered "see any provider" access, but consumer awareness remained low, and even among those aware, they were very skeptical of the quality of care and reluctant to give it a try.

That means that even when employees had access to telehealth through their employers, adoption was commonly less than 5%. Covid-19 forced regulators and payers to remove barriers to telehealth, including reimbursement expansion by CMS, commercial payers reimbursing telehealth visits at parity with in-person visits, relaxation of HIPAA constraints, and provider licensing standards across state lines, and commercial payers temporarily waiving patient co-pays.

As a result, the majority of providers have adopted telemedicine solutions and dramatically increased the types of visits offered. They've simply been forced to. Within the first four months of Covid, 30% of Americans had used telemedicine solutions with "see my provider" usage jumping as over 60% of providers started offering telehealth visits.

In our research with both patients and providers, we learned two important things. First, patients are highly satisfied with their telehealth experience. They value the convenience above all else, and importantly, they believe that the quality of care they're receiving is very good across a range of use cases, and they trust their doctor. Secondly, providers are adjusting to providing care via telehealth, and have made the necessary operational changes to do so.

So what happens post-Covid? Telemedicine will likely return to a new normal, which is above pre-Covid levels, but below the current peak, with tighter integration into traditional brick-and-mortar practices, and greater use of telemedicine tools in specific use cases and on specific populations—for example, in behavioral health, for physical therapy, with elderly populations, and more generally with populations that have restrictions on mobility and access to care.

The longer the crisis lasts, the more pressure payers will feel to figure out the right reimbursement coverage and access, and technology platforms will also have the opportunity to improve the quality of the solution, and the convenience. And they'll be able to continue to iterate and innovate on their solutions. Telemedicine providers today remain unprofitable, and that's largely due to the fact that they've had to invest so much in customer acquisition primarily, and also in product innovation. But we think that the increased awareness due to Covid and the significant growth in volume will enable them to reach profitability.

So what do we think about telemedicine? It's certainly here to stay in a meaningful way. Provider businesses will be faced with strategic decisions about the role of telemedicine and how much to invest in capabilities, and how to adapt their operation in order to be more efficient and effective at delivering care. And payers and self-insured employers will need to address how to incorporate virtual care offerings into their portfolio, how to reimburse for these offerings, and how to drive usage among their members.

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