Telemedicine: Identifying Rigid Demand Segments to Unlock Greater Value

Telemedicine is no longer a mere shadow of traditional healthcare models; instead, its unstoppable growth prospects are increasingly coming to light. However, skepticism surrounding telemedicine extends far beyond the lack of consensus on practice guidelines and insurance reimbursement issues. More importantly, compared with in-hospital consultations, patients need to understand the evidence-based rationale, while physicians must also clearly identify and segment rigid demands.



This Year’s “Harvest” of U.S. Telemedicine

From September 16 to 18, 2015, the American Telemedicine Association (ATA) held its Annual Fall Conference in Washington, D.C. The ATA President, on behalf of the association, released simplified statistics on the types and volume of telemedicine services provided by various healthcare institutions in the United States during the 2014–2015 fiscal year (12 months). For certain telemedicine services, such as remote imaging consultation, patients may not be explicitly aware of their use, but these services have been recognized by healthcare professionals as best practices. In other specialties, patients proactively request referrals from their primary care physicians to seek second opinions. Over the past year, the ATA compiled data on the specialty-specific telemedicine services and their respective volumes provided by member organizations and telemedicine healthcare professionals (see table below). All these telemedicine services or consultations were reimbursed by government health insurance programs or commercial insurers. This reimbursement framework has significantly encouraged telemedicine providers to further expand the scope and scale of their services, while patients have increasingly begun to proactively seek telemedicine consultations.



According to the annual report released by the American Telemedicine Association (ATA), the total number of telehealth service visits by the U.S. population increased from 10 million to 15 million compared with the previous year. Meanwhile, the ATA acknowledged that these figures serve only as a rough reference, without accounting for duplicate visits by the same patient or for the same condition/consultation. Certain specialties or services were also excluded, such as remote clinical pathology consultation services and telepharmacy. The ATA believes that the aforementioned baseline data merely indicate the growth rate and expansion trend of telehealth; accurate data would require further verification through dedicated human and financial resources. For seemingly obvious telehealth services like telepharmacy, one reason for their exclusion is that industry peers consider it difficult to distinguish between online medication purchases made independently by consumers and those fulfilled based on prescriptions issued by remote physicians, due to the lack of unified rules and regulatory standards.

Telemedicine Service Models Are on the Cusp of a New Dawn, with Conditions Beginning to Improve

As the federal government vigorously implements the Affordable Care Act (ACA), both Medicare and Medicaid have provided active support and recognition for telemedicine services. Consequently, a growing number of healthcare providers—particularly commercial healthcare contracting organizations or entities organized by practicing physicians—are seeking to guide patients with chronic conditions toward telemedicine models, ensuring they receive comprehensive disease treatment and health management services. If telemedicine in the United States was in its “winter” three to five years ago, it is now close to “spring.” Furthermore, the U.S. Congress is actively promoting new legislation to address regulatory hurdles and administrative delays across states in the delivery of telemedicine services.

The United States also faces the problem of “difficulty and high cost in accessing medical care.”

For the general public, there is a strong desire to access high-quality and professional medical resources. However, beyond the limitations imposed by health insurance policies, the protracted and sluggish tiered specialist referral system, coupled with a shortage of specialists and family physicians, has eroded the patience of many patients and their families. Consequently, an increasing number of individuals are opting to independently seek consultations with specialists, making it increasingly common to utilize telemedicine services for cross-state medical care. Healthcare institutions providing telemedicine services, as well as physicians—particularly specialists—who hold state telemedicine practice licenses, are actively promoting their remote consultation offerings or providing second-opinion diagnostic services. Indeed, the primary advantage of the telemedicine model lies in its ability to overcome geographical and temporal barriers. With the continuous improvement of internet transmission security and the rapid innovation of smart mobile applications, the application of these mature technologies will inevitably further catalyze the large-scale commercial development of telemedicine services.

Amid these seemingly inevitable developments, the level of insurance coverage remains one of the core reasons hindering the progress of telemedicine. Therefore, the American Telemedicine Association (ATA) advocates for modifying the existing insurance payment coding system and providing better evidence-based data to demonstrate the economic cost advantages of telemedicine models. Of course, the ATA also warns against preventing a small number of unethical practitioners from committing fraud or cashing out insurance funds under the guise of internet and telemedicine services.

Finally, and most importantly, as a proactive complement to existing traditional healthcare models, the telemedicine model requires meaningful communication among all participants, beneficiaries, and stakeholders, including: patients or users of telemedicine services, physicians and public health professionals, consumer groups, family physicians, health insurance providers or intermediaries, government regulatory authorities, policy and regulation makers, and capital investors driving marketization.

It appears that establishing a truly meaningful telemedicine service network model is not an overnight endeavor; it involves both strategic interactions among various stakeholders and their mutual support and candid collaboration. All institutions should acknowledge the principle: “Patient-centricity as the core, guided by market economics.” This ultimately culminates in the three principles of telemedicine: “Better medical services, healthier bodies, and lower costs.”

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