Be ready to catch the telehealth wave!

‘If you are either a healthcare service provider, private insurer or a healthcare related technology company, now is a good time to ramp up your tele-health related services’.

In late 2014, a US based company, Teledoc closed a $50m series F fundraising round, bringing its total funding to roughly $100m. After slow growth in the beginning, (the company was founded in 2002), the company began seeing its revenue grow by 100% in 2013. Since then, the investments have been flowing. So what does Teledoc do? It offers telemedicine services and Telemedicine is growing big!

The scenario earlier: Telemedicine or Tele-health is not a new concept. The idea of virtualizing appointments with physicians has been explored since the early 2000s. However, certain barriers resulted in a slow uptake of tele-health services; lack of medical reimbursements being the most prominent one. For instance, the lack of payments resulted in physicians preferring physical patient visits, resulting in un-necessary cost escalations. In addition, software licensing and cost of technology also made insurance service providers scoff at tele-health.

Paradigm shift due to new regulations: The scenario has changed considerably since. The introduction of ‘Affordable Care Act’ (also known as Obama-care) has put pressure on service providers across the value chain, to reduce medical costs. In addition, the advent of mobile devices and high speed internet has ensured a smooth user experience from both the physician and patient perspective. A 2013 report from IHS, a market research and analytics firm, predicted that tele-health services in the US, would grow from $240m, to$1.9b by 2018, growing at a 56% CAGR. Estimates show that tele-health services and technology can potentially bring down the cost of a doctor visit from $1,223 (as per a study published in 2013 in the journal PLoS ONE) to approximately $50, a whopping 96% reduction!

These factors have resulted in a change of attitude of regulatory bodies, as well as healthcare insurers, towards tele-health services. The number of states approving Medicare and Medicaid reimbursements related to tele-health is growing steadily.

In addition, a number of private health insurers have started extending tele-health solutions as a part of their health insurance package. Major insurance providers in the US such as Humana, Aetna, Cigna and Anthem Insurance have already started offering varied levels of tele-health services to the end user. A few of them have collaborated with niche firms such as Teledoc and MDLive to extend these services to mobile platforms. Right now, Kaiser Permanente is experimenting with a service called ‘House-calls’, to extend physician care to ailing patients at his/ her home via telemedicine.

This clearly points to an adoption rate which is going to see a significant rise very soon.

 A snapshot of current level of tele-health service offerings:


Opportunity for technology companies: Backed by the growing demand from independent policy holders as well as employers, more and more insurance companies are going to join the tele-health bandwagon, creating opportunities for technology service providers. Technology providers will play a critical role in building the ecosystem for tele-health services.


A number of companies are already doing exciting work in this area.

  • GE health and Intel have collaborated to set-up a company called Care Innovations. The company provides end-to-end tele-health solutions including remote tele-monitoring and data analytics.
  • Cisco has a well-established portfolio of telehealth service offerings.
  • One technology company has recently experimented with a product, which allows elderly patients to communicate with physicians and clinical staff through audio/ video conferencing using their televisions. The technology implemented was originally built by Microsoft for gaming.

It is clear that technologies such as Cloud based data storage, IoT, e-Health record management systems and healthcare data analytics are going to see an increase in demand following the tele-health boom.

So, if you are an organization, aspiring to have a significant presence in the future healthcare market, now is the right time to start building tele-health capabilities, so that you can make ‘as much hay, while the sun shines’.


  • Sanjivi SyamSundar April 1, 2015

    The idea of tele medicine is good but I would think it should be promoted more to bring access to healthcare to those who don’t have it. That will be the best use case.

    The value of a doctor physically seeing a patient cannot be brought through tele medicine for most illnesses. Also the basic steps like seeing your pulse, temperature, blood pressure the status of the eye, the amount of pain etc cannot be replicated in this model unless the patient has equipment to do these things.

    The comfort feel of a patient in speaking to a doctor is also of great psychological help in the recovery process. We seem to undermine this process and retrofit a technology solution purely from a cost factor. Does not seem to be a correct path to tread on. the human being from the way we have created have to go through a metamorphosis to behave like machines for this to work well.

    • Animesh Sarkar April 16, 2015

      Your point about the usefulness of telemedicine for remote location is correct. I understand your concerns regarding replacement of physical examination experience by a virtual one. However, instead of replacing the value of physical examination by a physician, the technology in this case just acts a filter to select the valid cases. This not only saves cost, but also saves a lot of time for both the parties involved. For eg. A person having just a minor headache can just consult the physician over a video-conference rather than actually spending significantly more time in visiting the doctor. And this is just the primary level of diagnosis. In case the physician sees an actual need of the patient visit after the video-conference, the patient will be asked to come and see the doctor. So the person still gets the psychological benefit of getting the opinion of a physician at the same time avoiding the pain of travelling to physician’s location.

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