Telehealth: Supply exceeds demand

An increasing number of headlines amplifying many incomplete data around telehealth have led industry stakeholders to extrapolate discrete data points about telehealth to the entire U.S. population. Using an economic framework to analyze national telehealth data. Only 25.6% of Americans utilized telehealth during the two years of the pandemic. Said another way, investments in the telehealth market have been made on the thesis that telehealth is preferred among most Americans. But the reality is that all these efforts are being dedicated to only a subset of the U.S. population. (Source: Trilliant Health Feb 2022)

The hype cycle around telehealth is in full overdrive because startups are looking for funding. However, the reality around telehealth is very different. To date, most of the research conducted on telehealth has been limited to what has happened, rather than understanding the factors that will inform what will happen.

According to the report from Trilliant Health “, the total addressable market for telehealth is <1% of the health economy…and declining”.

Even though more Primary Care is being delivered via telehealth than before the pandemic, that increase is insufficient to make up for declining Primary Care volumes. Aggregate visit volumes for telehealth and in-person Primary Care visits in October 2020 were 7% lower than the volume of solely in-person Primary Care visits for October 2019.

Before and after the onset of the COVID-19 pandemic, Behavioral Health accounted for the most significant share of telehealth visits. On average, in 2021, 57.9% of telehealth visits were attributed to Behavioral Health diagnoses.

Then there is this nugget; 79% of telehealth patients had between one and four visits between 2020 and 2021, with less than 3% of telehealth patients falling into the “Super Utilizer Category” of having 25 or more telehealth visits in the same timeframe.

Their Conclusions:

1ne: The post-pandemic market of telehealth consumers will be concentrated to a small population segment. Considering COVID’s “forced adoption” among singular utilizers, the most conservative estimate of the future telehealth market is <10M consumers.

2wo: Post-pandemic telehealth supply exceeds consumer demand.

In my opinion, this is an excellent report. I have talked with many HCPs within the industry, and they agree with the findings. They do see a use for telehealth, such as routine Rx refills, but overall they believe it has been hyped way too much.