As the COVID-19 pandemic continues its devastating spread, more patients and doctors have turned to telemedicine technology to help manage potential infections and maintain routine care. While the remote method of diagnosis and treatment suits today’s social distancing policies, can investors count on telemedicine to drive positive health impacts in the long term?
What Is Telemedicine?
Telemedicine refers to clinical services administered through telecommunications technology. According to the Office of the National Coordinator for Health Information Technology, telehealth or virtual care has four primary modes:
- Live videoconferencing, where patient and clinician meet in real time.
- Store-and-forward videoconferencing, where patients send clinicians recorded health histories.
- Remote patient monitoring, where digital devices record patient health data to be reviewed by a clinician.
- Mobile health, where users receive general or targeted health information via mobile devices.
Telemedicine has gained ground with advances in technology and more widespread internet access. As the Commonwealth Fund notes, telemedicine technology has held special promise for delivering care to rural populations, which face limited access to facilities and providers. The technology has also been promoted as a way to reduce healthcare costs. Despite favorable developments last year, state-based regulation of telemedicine has been a barrier to more full-scale adoption.
COVID-19 Boosts Use of Telemedicine Technology
With COVID-19 limiting both public outings and nonemergency medical care, some have speculated that the pandemic may represent a tipping point for telemedicine adoption. According to a recent Medscape report, COVID-19 has driven a 225% increase in “remote patient engagement,” and the American Medical Association reports that regulators have made short-term changes to expand the reach of telemedicine technology.
One caveat is that certain health providers are afraid that patients in need of non-COVID-19 emergency care are putting their lives at risk by not attending emergency rooms for fear of becoming infected with the virus. Indeed, one potential shortcoming of telemedicine is that some patients might delay receiving immediate medical attention when they need it urgently. However, medical professionals can use telemedicine to triage patients; this is especially useful during a public health crisis like COVID-19, where patients show symptoms ranging from mild to severe.
The rising demand for telemedicine propelled investments in this space. For example, US telemedicine and virtual healthcare firm Teladoc Health flagged a significant increase in demand for its services on the back of COVID-19, reporting a 41% rise in first-quarter revenue year over year. Meanwhile, Texas-based startup Medici raised $24 million in funding from investors in April, with the company citing a 1,400% increase in patient registrations in February and March. Mental health startups delivering virtual care have also seen an uptick in demand related to anxiety around the pandemic, PitchBook reports.
Beyond the US, in frontier markets, Barron’s lists telemedicine among a number of social impact–oriented industries that have relatively simple supply chains and are “experiencing early indications of strong performance and resiliency” in light of COVID-19.
Importantly, these investments offer both positive impact and potential for competitive financial returns. Interest from impact investors in this space is not intended to capitalize on the misfortunes that COVID-19 has caused. Rather, impact investors seek to make investments in telemedicine to offer patients continued access to healthcare amid the current public health situation while also generating financial returns.