Over the past two years, there has been much debate about the impact of the COVID-19 crisis on accelerating changes in healthcare delivery, including teleservices and the home. As a result of the unprecedented surge in telehealth demand during the peak of the pandemic, health systems, payers, employers, new entrants and Wall Street financiers have aggressively pursued telehealth expansion strategies.
The delineation of the total number of visits to telecare versus the number of unique individuals who have used telecare is essential to understand the future demand for telecare. In Our analysis of more than 70 billion claim rules representing more than 300 million Americans, we find that the growth in telehealth use is largely attributed to the law of small numbers.
Analyzing television volumes through the lens of who consumes care, we find that approximately 38 million Americans (12% of the population, excluding traditional Medicare beneficiaries) used telecare in 2020.
Before the CMS waiver came into effect during the public health emergency, video interaction was a prerequisite for classification as a telehealth visit. According to survey estimates of the Kaiser Family Foundation, 56% of Medicare beneficiaries who had a telehealth visit between the summer and fall of 2020, did so using audio only.
Applying the pre-waiver criteria to our analysis of claims from all payers, including traditional Medicare, the total percentage of Americans using telehealth last year would still represent less than 15% of the US population.
The data further shows that 60% of telecare users are women, which is consistent with pre-pandemic trends. In particular, women between the ages of 30 and 39 were the most consistent users of telecare during all stages of the pandemic.
Longitudinal analysis of telecare users by gender and age shows that telecare grew in popularity among women aged 20-29 years and decreased among women aged 40-49 years between pre-peak and peak pandemic periods.
As telehealth volumes begin to decline from peak heights, health systems need to carefully analyze post-pandemic demand for this modality. While the pandemic triggered a level of “forced adoption,” the data makes clear that telecare was not necessarily seen as a substitute for personal care, except for behavioral health services. Perhaps more importantly, Amazon and Walmart’s entry into the telehealth market suggests that telehealth will increasingly become a commodity.
The commoditization of telehealth inherently disadvantages health systems as they compete in an already oversupplied market, especially in light of the Amazon Care’s plans to expand its virtual care services. With more than 40% of Americans already involved in Amazon Prime membership, the inherent overlap between pre-existing relationships with Amazon’s consumer base and current telehealth users should relate to health systems.
The increase in capital investment in telecare caters to very small consumer segments with corresponding demand. Even if the total number of telecare visits remains at current levels or even increases, they will still be distributed among a relatively small segment of the total population with an increasing number of providers.
What sets health systems apart from all other providers is their ability to deliver complex health services, not ordinary health services. When investing limited financial resources in an already highly commoditized market, healthcare executives need to consider which consumers to attract.
As more competitors enter an already oversupplied telehealth market, it will become even more difficult to win consumer loyalty. Thus, successful telehealth strategies in a post-pandemic health economy will depend on health systems having an accurate understanding of which population segments will drive future use and their respective health preferences.
Ultimately, the question remains whether health systems can respond to those consumer preferences, but more importantly, whether they can do better than existing consumer brands like Walmart and Amazon.
Jain is a health researcher and strategic advisor with expertise in integrated delivery systems and data-driven decision-making. She leads research and thought leadership at Trilliant Health and is on the faculty of the Johns Hopkins School of Medicine. dr. Jain previously held leadership roles in research and advisory services, governance education, and value acceleration at the Health Management Academy and Emory Healthcare. Her research has been published in scientific journals such as: health matters† JAMAthe American Journal of Managed Carethe Journal of Healthcare Management and leading industry publications such as: Modern healthcare and the Market scan of the American Hospital Association† She has a bachelor’s degree from Rice University and a PhD from Emory University.