The global telemedicine market size was estimated to be $144.38 billion in 2020. As a result of the COVID-19 impact, the telehealth market grew an estimated 135.2% in 2020 compared to the average annual growth rate during the 2017-2019 period. The market is projected to grow to an estimated $636.38 billion in 2028 at a CAGR of 32.1% over the 7-year period. In the US alone, IBISWorld estimates the telehealth services market to be $3.5 billion in 2021 and grow by 9.6% for the full year 2021. However, as of late summer 2021, virtual visits have stabilized, but still at levels much higher than before the pandemic. Although telehealth visits continue to grow, the growth has slowed considerably from the 65% increase witnessed in Q1 of 2020 to a 10% growth in visits in Q2 of 2021.
The adoption rate of telehealth is increasing dramatically, especially in radiology, cardiology, behavioral health, and consultation. But the market is seeing a swarth of funding for startups in all segments. In the second quarter of 2021, the top five deals alone were worth $1.6 billion, representing 30% of the total funding raised. Additionally, global investment reached an all-time high of $5 billion in the second quarter of this year, resulting in a 169% year-over-year growth rate. While fresh capital has fueled overall market growth, there are several segments which have benefited the most.
The teletherapy, coaching and care management segments appear to be the most popular for investment, encompassing 37% of the total deal share in Q2 2021. The remote monitoring and diagnostics segment was the next most popular with 20%, and the telemedicine providers, platforms and marketplaces segment followed close behind with 19%.
The latter segment — telemedicine providers, platforms and marketplaces — saw funding fall significantly from $1.8 billion in Q1 to $1 billion in Q2 of this year. The teletherapy, coaching and care management segment, on the other hand, experienced the opposite effect in the same time period, with funding climbing 80% from about $1 billion to $1.8 billion.
Many of these deals and investments are due to mergers and acquisitions, with 35 total deals conducted in Q2 alone. Acquisition highlights include Walmart’s purchase of MeMD, and Bright Health negotiating for Zipnosis. These investments would lead one to assume that big business views telehealth as a significant future investment.
According to a survey conducted by Amwell (NYSE: AMWL), a national telehealth leader, more than half (56%) of hospital and health system leaders say they are planning to increase their investment in telemedicine over the next two years. The primary areas of focus will be staff training and support, specialty care, and hospital-at-home programs.
What has been revealed is that many healthcare providers quickly rolled out telehealth applications/platforms during COVID-19 out of necessity but little thought went into their overall telehealth strategy. Industry leaders are calling this urgent deployment “platform sprawl” which is the use of a number of disparate solutions that are leading to a confusing and frustrating care delivery system and experience.
Healthcare organizations believe visit volumes, member satisfaction scores, improved outcomes and improved access to care as their top priorities for virtual care. However, what’s paramount for healthcare organizations is that they establish a single telehealth platform that is secure and fully integrated with other systems such as the EHR and compliance programs. More than 80% of the Amwell survey respondents believe investing in a fully integrated virtual or hybrid care system would have a positive impact on clinical outcomes and patient experiences.
The vast majority of hospital and health system leaders say they measure the effectiveness of their technology by patient satisfaction scores and provider satisfaction/adoption, making these key priorities for the stakeholders driving their digital care investments.
It’s clear that telehealth is here to stay and the expansion will likely continue.