Telemedicine Beyond Health and Insurance Markets
Insurers and health providers are consolidating telehealth services into their portfolios, as regulation evolves positively in most regions. Telehealth goes beyond its natural market and reaches a wide spectrum of sectors, such as pharma, fintech and banking, retail, telecommunications and employee benefits.
Telemedicine has grown significantly and is positioned as an alternative way to provide health services to patients. Telehealth services reached a total market value of US$42.3 billion in 2022, and it is expected to continue growing at more than 20% CAGR from 2022 to 2030*.
According to WHO, the trend is toward increasing utilization of telehealth as the income level increases, although even among low-income countries, 42% of the population used telehealth services during the COVID-19 crisis.
The insurance industry is consolidating telemedicine as part of its value proposition for clients. According to Willis Tower Watson, 50% of insurers globally offer telehealth across all plans. Insurers in Europe are most likely to offer telehealth, with almost three-fifths reporting that they do so. Telehealth is offered by almost half of insurers (49%) in the Middle East and Africa, followed by 46% in Latin America. While only 31% of insurers in Asia Pacific report offering telehealth across all plans, 36% report offering it for select plans.**
Most insurers that offer telehealth in all regions offer general practitioners, drug prescriptions, specialist consulting services and mental health. Around 90% of the insurers offer such services in all regions, except for specialist consulting services and mental health services in Asia Pacific, where the implementation is much lower.
The regulation is evolving in all regions to accompany the implementation of telehealth solutions. In Brazil, telehealth was legalized in April 2021, South Africa rushed to implement its guidance in 2021, and other countries, such as the US, India, Germany, Australia, Singapore and Ethiopia, also implemented country guidelines for telemedicine, including electronic prescriptions***. Mexico has introduced a Digital Health Law initiative to the Chamber of Deputies that would support telehealth services in the country. The legislative situation in relation to telehealth services is evolving rapidly and positively in most regions.
Telehealth is at the top of the agenda of the vast majority of hospitals and health providers. Both the private and public health sectors are implementing programs to increase capillarity of health services among the population. There is a consensus among health providers that telemedicine can solve more than 50% of medical consultations. There is a strong use case to transition a portion of clinical encounters to virtual care in multiple specialties: psychiatry, neurology, cardiology, critical care and pulmonology, maternal-fetal medicine, nephrology, and (as COVID has made clear) infectious disease. Home care is rapidly expanding and the evolution of technology for remote monitoring is supporting this trend. Patients will be treated from hospitals and from home.
Now, the growth of telemedicine is going beyond its natural market, as it is being implemented by companies in numerous other sectors. This trend is common in different geographies. We are seeing a wave of companies in different sectors starting to offer telemedicine to their employees and their clients, taking advantage of the fact that health services can be offered through a smartphone and not only through a face-to-face consultation in clinics or a hospital.
Telecommunications is a very relevant example of an industry implementing telehealth. Some companies in the telco industry are offering telemedicine services to their clients in several countries, such as Spain and Brazil. Some of them include these services as part of their value proposition and others have decided to launch a separate health division leveraging telemedicine services. Connectivity and scalability are part of their value proposition and match very well with the key values and drivers for telehealth. Telecommunications companies are well positioned as they provide the connectivity required for telehealth and their client base is digitalized. Rural areas tend to lack a good supply of specialists and telecom companies can provide the connectivity to allow a good connection between the patient and the specialist doctor located anywhere.
Pharmaceutical companies are also leveraging telemedicine services. Several brands are launching telemedicine as part of a more holistic approach to treating different diseases. They are moving from offering a pill to offering a complete range of services to treat a disease, increasing the effectiveness of the treatment. Remote monitoring and specialist consulting services for chronic diseases are being implemented by some players. On the one hand, they want to improve customer engagement and satisfaction and increase the impact of the treatment, but on the other hand they need to keep their prescribers (doctors) happy. Pharma companies are incorporating telemedicine solutions, while trying to involve their prescribers (doctors) in these initiatives.
Drug stores or pharmacies are also taking advantage of the positive progress in the legislation of telemedicine. As far as the regulation allows them, pharmacies are starting to offer telemedicine services and electronic prescriptions to further penetrate their client base and provide a 360-degree online service. They are essentially replicating in their e-commerce offering the customer experience that is implemented in their stores, within the limits of the regulation.
Fintechs and banks are also including telemedicine as part of their services for their clients. In this case most of the fintechs in the market are targeting clients that need health services but cannot necessarily afford to pay for full health insurance. The matching of the telehealth services with this segment is perfect, as offering telehealth is highly valued and needed by their clients. I would say that the public target of these fintechs are those who most need health services and cannot afford them, so a more cost-effective health solution suits this segment very well.
Retailers are moving into the health industry, by offering drugs and health products, and offering telehealth services allows them to further penetrate their client base. Retailers have a massive base of recurring customers who are loyal to their brand. After COVID-19, retailers took advantage of their positioning and the newfound need for health services by the population to penetrate that segment. E-commerce retailers are not an exception. Most of them are taking advantage of the progress of telehealth technology and the positive progress in the regulation to sell more drugs and provide health services to their clients.
Most employers are starting to offer telemedicine services to their employees to improve their quality of life, and also to comply with regulation. In Mexico, as in other countries, all employers need to comply with strict regulations that oblige them to take care of the physical and mental health of their employees. Telemedicine is an alternative that is proving to be successful for complying with the norm, retaining employees and reducing absenteeism. Telemedicine is a great solution to provide health services to their employees whenever and wherever they need it. Companies used to have health services in their work centers; telemedicine allows them to continue providing health services to employees working from home or in the street.
Telehealth services have proved to be successful and regulation is accompanying their expansion. Health is a basic need of the population and the growth and aging of the population, the increase of chronic diseases and the saturation and limits of the public health services are obliging the system to implement more efficient health services. Telehealth is being implemented through different channels and sectors as it can address a big portion of medical consultations, and all patients need to do is use their smartphone.
* Predence Research
** 2021 Global Medical Trends Survey Report, Willis Tower Watson
*** Consolidated telemedicine implementation guide, World Health Organization