Use of Telehealth Services Rising Amid Pandemic, But Long-Term Outlook is Less Clear
Teladoc Health, the largest telemedicine software provider in the US, reported 2.8 million virtual visits in the second quarter of 2020, more than triple the same period in 2019. The high demand is expected to continue into 2021.
The use of telehealth services has expanded amid the coronavirus pandemic, as more patients have sought to handle their medical needs from home as often as possible.
But Fitch Ratings warned that post-pandemic demand for telehealth will depend on whether insurers continue to cover the visits and whether patients continue to view it as a valuable option.
Teladoc Health, the largest telemedicine software provider in the US, reported 2.8 million virtual visits in the second quarter of 2020, more than triple the same period in 2019. The high demand is expected to continue into 2021.
Telehealth has provided revenue continuity for healthcare providers and other parts of the health supply chain amid the pandemic, partially offsetting losses caused by a sharp drop in elective procedures.
The virtual visits allow doctors to continue prescribing medications and offer billable services, and in the long run, telehealth may help providers attract and retain more patients due to the convenience of the services. It may improve revenue by allowing providers to bill for calls that previously went uncompensated, and the increased patient flow and greater operating efficiency could improve profitability and cash flow.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Coronavirus Preparedness and Response Supplemental Appropriations Act provided funding for telehealth services amid the pandemic, and President Donald Trump recently signed an executive order proposing that the Centers for Medicare and Medicaid Services make some of the allowed telehealth provisions permanent.
Recent investments in telemedicine via M&A, venture capital and elsewhere demonstrate expectations that telehealth appointments may remain a larger part of healthcare services after the pandemic fades away, but market penetration could be limited by reimbursement uncertainty, questions about effectiveness and a lack of access to high-speed internet services among seniors in need of frequent medical appointments.