Telehealth: Tackling Evolving Competitive Landscapes in Response to a Megatrend
Telehealth is the facilitation of healthcare, health education and health information remotely through telecommunications technology. As a concept, telehealth has been around for decades, with origins traced back to the 1940s.
However, it has boomed significantly since the Covid-19 pandemic started, being leveraged as one of the lockdown measures to limit the spread of the virus. Advocated by both the CDC and WHO and backed by state-of-the-art digital systems, telehealth has shown that it is not only a viable option, but in many cases the preferable way to deliver care going forward. Learnings and changes to care delivery during the pandemic are expected to fundamentally reshape the care delivery model across many therapeutic areas. Not only do we see the growing presence of new (tech)players, but a shift in how healthcare interacts with pharma can also be observed.
According to McKinsey’s latest statistics, the use of telehealth first skyrocketed in Apr 2020, before gradually dropping again, and stabilised at 38 times higher compared to pre-Covid levels. Apart from necessity, several factors have contributed to this increase: rise in patient and provider willingness to use telehealth and regulatory adaptations, which enable greater accessibility and reimbursement (e.g. expansion of reimbursable telehealth codes by Medicare & Medicaid). Furthermore, investments in virtual care and digital health have significantly increased, driving continuous innovation and advancement of virtual healthcare models.
The rise of telehealth has been more palpable in specific specialties including psychiatry and substance use disorder treatment, with psychotherapy being the No. 1 utilised procedure across the US (in Mar/Apr 2021). As of June 2021, 40% of visits to a psychologist/psychiatrist have used telemedicine approaches (McKinsey Covid-19 Consumer Survey). Notably, telepsychiatry is evolving into a remarkable tool in providing ongoing psychiatric evaluation and care, to encourage adherence, as well as to provide emergency crisis intervention in cases where a local psychiatrist is not available. Pharma players in the space have also started to progressively adapt their offerings, providing accessible platforms for HCPs to monitor patient wellness and adherence, as well as tools to maintain open and direct communication between patients and carers. For example, BioXcel Therapeutics is developing a platform to leverage an existing wearable device (Apple Watch) and AI to improve management and prevention of agitation in Alzheimer’s patients.
Even in specialties such as ophthalmology or oncology where direct patient contact is essential, telehealth has significant benefits, derived from avoiding unnecessary clinic visits and managing capacity. The fundamental benefits associated with telehealth justify the momentous uptake of this trend. Improved healthcare accessibility has led to higher patient engagement rates, facilitated by online reviews, appointment booking and digital reminders. Notably, virtual care also reduces the risk of exposure and the stress associated with waiting room and hospital visits and has been associated with even greater adoption of telehealth approaches and a positive attitude towards them. Furthermore, telehealth has been linked to scalable cuts in healthcare costs, which are even thought to mitigate the rising burden of Covid-19-related expenses. Savings are largely driven by reductions in avoidable emergency room visits, improved clinician productivity, significant drop in no-show rates and minimising costs associated with chronic patient populations. These aspects strongly support wider telehealth utilization even beyond the pandemic, providing significant incentives for payers and regulators when considering future health solutions.
The first half of 2021 has seen an incredible rise in corporate funding into digital health companies, from $6.3 billion in H1 2020 to totalling $15 billion in H1 2021, according to a report from Mercom Capital Group. Investment in telehealth is leading overall funding activity, accounting for a third of total funding raised so far in 2021. Apart from the increasing penetration of big tech companies in the healthcare space (Amazon Care, Google Health, Apple Health, Microsoft Cloud for Healthcare), numerous pharma companies have also joined the race through partnerships and acquisitions of health tech firms offering mobile health solutions and remote monitoring services, such as the collaboration between AstraZeneca and Vidscrip or the more recent acquisition of Preventice Solutions by Boston Scientific.
As a current megatrend, telehealth invites new players to enter the competitive landscapes across several therapeutic areas. While clinical development progress is usually steady and slow, new players can transform into threats depending on their product strategy and innovation programs, with tremendous impact on the market in the long-term. The threat of a large tech player entering the healthcare space might be intimidating for current players, however CI is key to assessing competitive threats and designing creative mitigation strategies. Good CI practice should aim to expand monitoring beyond the major pharma competitors and keep an eye on potential new entries. Expanding the CI reach ensures that the risk and opportunity of potential disruptors are assessed early to drive the formation of defence strategies.
As every silver lining has a cloud, telehealth comes with challenges that remain to be addressed. Apart from the profound ‘Zoom-fatigue’, critics voice concerns over missed cancer diagnoses, negative perceptions around technology security, data storage, privacy, and increased antibiotic prescriptions, especially in paediatrics. However, recent evidence shows that modern telemedicine practices have strategies in place to address these issues to considerably improve cancer screening rates and employ stricter prescription practices. Such solutions can provide essential strategic considerations for health-tech companies when seeking ways to expand their offerings and adjust their messaging while engaging with HCPs and regulatory authorities.
With the benefits outweighing the risks, the ascent of telehealth will likely be unstoppable even after the pandemic ends, possibly in a hybrid model to accommodate a mix of clinic visits and online consultations. Furthermore, growing investments and innovations in the consumer-facing health and wellness market, promise ground-breaking developments in remote monitoring medical devices, clothing, and smart gadgets, aiming to collect health data and allowing round-the-clock monitoring and convenient communication between patients and their healthcare providers. With the space expected to become extremely saturated and competitive, a vigorous CI strategy is of essence, to continuously assess upcoming threats and opportunities, to prepare original defence strategies and manage actively evolving landscapes.