The COVID-19 pandemic has disrupted the global economy as well as crippled several sectors so far. But one industry that has been a significant beneficiary of the coronavirus breakout is the telehealth industry.
Pandemic Spirals Demand for Telehealth
Remote healthcare took centre stage in the wake of the novel coronavirus, which is a highly infectious, flu-like disease. Due to observance of stringent social-distancing measures, patients are left with distant healthcare as the only viable option to seek medical help. This, in turn, shoots up demand for tele medical expertise and boosts the telehealth market eventually. Per MarketsandMarkets, the global telehealth market is projected to witness a CAGR of 16.9% during the 2020-2025 forecast period, touching $55.6 billion by 2025 from $25.4 billion in 2020.
Among the industry participants, Teladoc Health Inc. TDOC is a niche player in the telehealth service industry with wide offerings and international reach. Other companies, namely Cigna Corp. CI, CVS Health Corp. CVS and Humana Inc. HUM have all developed telehealth services.
Government Extends Full Support
The telehealth industry is gaining a substantial traction from government aids. During the pandemic, Centers for Medicare & Medicaid Services (CMS) expanded access to telehealth visits. Therefore all beneficiaries are covered for audio and video visits. The agency also updated coverage rates to pay the same rate as in-person visits for the duration of the crisis. Previously, telehealth visits had lower reimbursement rates.
Ms. Verma administrator of CMS recently affirmed that the president wants to explore the benefits of telehealth care more widely. She said, ‘we had increased the amount of services that qualify for telehealth and even provided small, kind of, short visits over the phone or through Skype, even before the coronavirus". Adding further, she stated, "So we're looking at all of the waivers that we provided. We're evaluating them to determine whether they should be extended past the coronavirus".
She also emphasized that the agency is in the process of laying down rules and some of the provisions that were temporarily extended during the coronavirus outbreak are likely to be retained for good.
States Making Telehealth Coverage Permanent
Many states expanded access and insurance coverage for telehealth. But with the gradual reopening of economy, the states will have to decide whether to keep those changes intact once the emergency orders are lifted.
Notably, three states, namely Colorado, Rhode Island and Illinois are working to establish a permanent telehealth access and coverage post pandemic.
A Colorado Senate committee on Jun 3 passed a bipartisan bill that aims to uphold patients' ability to receive care via telehealth, which was implemented during the COVID-19 public health emergency.
The Rhode Island Senate Health and Human Services Committee on May 27 advanced a bill that will permanently require payers to cover telemedicine services at the same rate as is applicable to in-person services.
Illinois' House passed a bill in late May, which would have extended Gov. J.B. Pritzker's executive order in March. This bill requires insurers to reimburse telehealth services at the rate equivalent to in-person visits.
Is Telemedicine Here to Stay?
Per a recent survey according to a recent Venrock report (conducted between Mar 22 and Apr 3), telemedicine is poised to establish a long-term role in healthcare domain. While 72% is of the opinion that telemedicine will grow integral to Medicare/Medicaid, 57% foresee that telemedicine will replace office-based visits. The rest 26% rubbished telemedicine as just another fad.
However, the convenience, cost effectiveness and flexibility provided by telehealth services are hard to ignore and the same is likely to woo more patients.
Among the companies mentioned above, CVS Health currently carries a Zacks Rank #2 (Buy).
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