2015 Predictions for Telemedicine
in IndustryJon Pearce
December 8, 2014
It’s time to get out the crystal ball and start predicting what’s going to happen this next year in telemedicine/virtual care. Given my inability to even predict a basic pro forma (gulp) more than a few months out, I’ll bet only that I’m mostly wrong…but it’s always fun to take a stab. So here are my 2015 predictions:
1. Telemedicine/Virtual Care Will hit Mainstream: It’s all the rage with significant investment flowing into a couple big companies (MDLive, Doctor-on-Demand, Teladoc), the ATA gaining traction amongst the legislative circles and even celebrities joining the fray. Additionally, given the high-level of investment made into the space, there will be pressure for exits. This will increase consolidation and acquisition by bigger fish. This shifts telemedicine company’s focus from innovation to capital formation. Look for at least two insurers to make a scalable play.
2. Retailers Will Stop Testing: After quite a bit of internal tumult at CVS and Walgreens this past year, the retailers will focus on how they can extend their brand and solutions further into consumer’s hands. Their deep pockets, strong brand recognition, vast network of brick and mortar locations and early success with mobile apps will give them distinct advantages over payers/healthcare providers. Especially as some of the retailers look to take on population health management/risk, they will have a strong appetite for low-cost, virtual solutions. Nearly every retailer has a pilot, or multiple if you’re Wal-Mart, ongoing. The testing will need to end they’ll look to scale services and platforms starting in 2015.
3. $40 Will Become the Price-Point: Like retail medicine 10 years ago, virtual care/digital health will begin to circle around a common price-point for services. With the recent CMS guidance on telemedicine reimbursement at $43, that will anchor the market price. Private insurers will probably slot in between $45-55 per visit for acute care. Chronic disease management remains the pot of gold but there are more hurdles towards adoption on this front.
4. MyChart Won’t Become Your Chart: Epic is making significant investments in video tools, mobile interface and touting their Apple HealthKit relationship. Many Epic clients will upgrade/purchase these tools and launch them hoping they will constitute a viable telemedicine/virtual care solution. All this would draw a clear line towards dominance. But I think the biggest headwinds are speed to market and poor user experience (patients and providers). This market is moving far too fast for a protracted build process endemic with Epic. Today, even 3 months can make the difference between first move-advantage and being a “me-too” solution. Healthcare’s technology experience is decades behind other industries, so there is intense pressure to modernize. Not to dog on Epic, they are a force and hold lots of trump cards – but it’s also not a slam dunk as I believe user experience and market share are more important than technology in this space.
5. Investors will flow like the Salmon of Capistrano: Long-term healthcare IT investors likely already have some bet in this space. Which means a new wave of non-traditional healthcare IT investors are working to find investable opportunities. I think we’ll see a book-end of investment activity where early-stage investments are getting funding (Seed,Series A) and then IPO/Series D+ investments. Overall though it will remain a good time for raising risk capital.
So there you have it…the only certainty is that 2015 will be a dynamic year for telemedicine/virtual care.