Telemedicine Startups: Adapting to the Post-Pandemic Landscape

The Evolution of Telemedicine

The concept of telemedicine isn't new; its earliest iteration, the telephone consultation, has served individuals for many years. For those residing in geographically isolated or underserved rural communities, remote physician consultations via phone have frequently been the primary means of accessing healthcare.

However, for a significant portion of the population accustomed to dedicating substantial time off work for relatively brief medical appointments, the emergence of telemedicine may feel recent. This perception is largely due to the fact that it wasn't until 2020 that telemedicine, in its diverse applications, gained widespread recognition.

Challenges and the Catalyst for Growth

Historically, the broader adoption of telemedicine within the U.S. healthcare system encountered obstacles. These included the necessity of adhering to stringent HIPAA compliance standards and initial reluctance from insurance providers to reimburse for virtual consultations.

The onset of the COVID-19 pandemic dramatically altered this landscape. As public health measures necessitated staying at home, both the insurance and healthcare sectors were compelled to embrace change and adapt to new realities.

A Surge in Investment and Innovation

As noted by StartUp Health co-founders Steven Krein and Unity Stoakes in their 2020 year-end report, periods of rapid transformation can occur unexpectedly. This observation proved particularly apt for telemedicine.

In 2020, the sector experienced a substantial influx of funding, reaching approximately $3.1 billion – a threefold increase compared to the previous year, as reported by StartUp Health.

StartUp Health, a prominent health tech fund and insights company, boasts co-investors such as Alphabet, Sequoia, and Andreessen Horowitz.

The Future of Healthcare

With increased exposure to the advantages and convenience of accessing healthcare remotely, the industry has undergone a fundamental shift. While the precise operational models of healthcare institutions post-pandemic remain uncertain, the growing familiarity with telemedicine positions virtual care providers for continued success.

The widespread acceptance of “dialing a doc” from home suggests that telemedicine is not a temporary trend, but a lasting component of modern healthcare delivery.

The Current Landscape of Telemedicine

Leading figures within the healthcare sector now delineate the state of the industry as existing “before COVID” and “after COVID,” as Stoakes communicated to Extra Crunch. He emphasized that a substantial shift has transpired in the post-pandemic era. Customer adoption has been accelerated, capital investment has increased, and both consumers and physicians have demonstrated rapid adaptability.

Within the U.S. healthcare system, financial viability is a primary consideration. Effective treatment methodologies, even those with established positive patient outcomes, were not widely implemented if they lacked financial justification. Telemedicine serves as a prime illustration of this principle.

Research Supporting Telemedicine

A 2017 study published in the American Journal of Accountable Care indicated the potential benefits of telemedicine in healthcare management. The research highlighted that utilizing telemedicine can lead to improved long-term care and increased patient satisfaction. It also provides novel avenues for accessing health information and communicating with healthcare professionals through channels like email, interactive chats, and video conferencing, ultimately enhancing patient convenience and minimizing travel for both parties.

However, widespread adoption of virtual healthcare within the U.S. required a global health crisis to catalyze its implementation. With investors now recognizing its potential, funding is increasingly directed towards startups focused on advancing telemedicine capabilities.

Notable investors in these emerging companies include StartUp Health, Andreessen Horowitz, Sequoia, Alphabet, Kaiser Permanente Ventures, U.S. Venture Partners, Maveron, First Round Capital, DreamIt Ventures, Human Ventures, and Tusk Venture Partners.

Key Players in the U.S. Market

Currently, prominent telemedicine providers in the U.S. encompass white-label solution companies like Teladoc, Amwell, and Truepill. Additionally, Zoom for Healthcare, a video conferencing platform, and MDLive, a telehealth provider recently acquired by Cigna, are significant contenders.

In China, possessing the world’s second-largest healthcare system after the U.S., the population has readily embraced technology in numerous facets of daily life. However, telemedicine adoption was initially slower until recently.

The onset of the pandemic prompted telehealth providers to rapidly offer virtual care services, and the Chinese government eased regulations while actively promoting telemedicine to encourage individuals to remain at home and mitigate infection risks.

Growth in China

Ping An Good Doctor, a company with a $12.8 billion market capitalization and one of the nation’s leading telehealth platforms, experienced substantial growth. According to China Briefing, it witnessed a 900% increase in new users and an 800% surge in online consultations between December 2019 and January 2020. By the close of 2020, its registered user base had expanded by 18.3% to 372.8 million, with average daily consultations rising by nearly 25% to 903,000.

Ping An was not the sole beneficiary of this trend. In 2020, JD Health reported 89.8 million annual active user accounts, and its Internet Hospital platform averaged 100,000 daily online consultations – a more than fivefold increase from 2019. Alibaba Health also observed significant growth in online consultations and pharmaceutical sales, contributing to a 74% revenue increase to $1.11 billion in the first half of FY 2020.

While a considerable number of these large organizations have primarily focused on connecting patients with physicians, several startups are building upon this foundation and concentrating on areas with significant potential for improvement.

• Doctor accessibility is a key focus.
• The need for in-person examinations remains important.
• Affordability is a crucial consideration.

The companies discussed below are dedicated to addressing challenges within both traditional and virtual healthcare systems.

Doctor Availability in Modern Healthcare

Traditionally, access to healthcare in the United States has been closely linked to employment status. Consequently, the success of a company like Wheel is readily understandable. Launched in 2018, Wheel has secured $16.1 million in funding and concentrates on providing a clinician-centric approach to the expanding virtual care sector.

Wheel enables any organization – regardless of its primary industry – to outsource the complete care delivery process through its white-label solutions. The company communicated to Extra Crunch via email that organizations are discovering the inefficiencies and high costs associated with independently developing virtual care services.

This is particularly true when attempting to meet fluctuating patient demand while simultaneously managing clinician availability across various specialties and licensing requirements. Wheel addresses this challenge by providing a readily integrated solution, including a robust network of healthcare providers.

This allows any company to initiate a virtual care service without the need for extensive internal development. The expectation of on-demand services, prevalent in many aspects of modern life, has now extended to virtual healthcare, especially for common medical concerns.

“The core benefit of virtual care lies in the seamless connection between patients and the most appropriate clinician for their specific needs, in real time,” explained Michelle Davey, co-founder and CEO of Wheel, during an interview.

“Achieving this requires extensive networks of clinicians who are well-trained, experienced, and readily available to deliver superior care.” Wheel also empowers physicians with the flexibility to work at their own pace on the platform.

It furnishes them with all the necessary tools to effectively manage their virtual practice, including training in optimal online consultation techniques – often referred to as “webside manners.” Many physicians find it challenging to adapt to virtual consultations, having been primarily trained for in-person patient interactions.

Therefore, physicians utilizing the platform are required to complete training focused on maintaining eye contact with the camera, displaying positive body language, being mindful of hand movements, remaining seated, and practicing active listening. These practices aim to create a comfortable environment for patients and enhance communication.

Webside manners extend beyond simply providing a positive customer experience. Dr. Neel Naik, director of emergency medicine simulation education and an assistant professor at Weill Cornell Medicine, emphasized in a 2020 American Medical Association post that it’s about demonstrating empathy and understanding the complete patient experience.

“A common difficulty with telemedicine arises when practitioners attempt to directly transfer their in-person techniques into the virtual setting,” Dr. Naik stated. “This approach is ineffective; we must instead cultivate a distinct skillset specifically for providing care to patients remotely.”

Companies like Omada Health are proving particularly valuable for individuals with chronic conditions residing outside of major metropolitan areas, where accessing specialists can be difficult and involve substantial travel. Omada, with 350 employees and $258 million in funding, delivers telemedicine-based care management for conditions including diabetes, musculoskeletal problems, preventative health, hypertension, and behavioral health.

A key aspect of Omada’s approach is the extensive support it provides to patients, which has demonstrably improved health outcomes. Ensuring patient adherence to treatment plans after leaving a doctor’s office is a significant challenge for healthcare providers.

Omada bridges this gap by connecting patients with support groups comprised of individuals facing similar health challenges and maintaining regular contact with professionals who monitor progress and encourage continued engagement, ultimately leading to improved recovery rates.

Thirty Madison represents another significant player in specialized care, although on a smaller scale than Omada. Established in 2017, this end-to-end healthcare platform offers treatments for migraines, allergies, acid reflux, and hair loss through dedicated brands.

Patients can subscribe to one or more of these treatment programs, and Thirty Madison will either assign a physician or recommend doctor-approved treatments and medications tailored to the individual’s specific needs, functioning as a substitute for traditional in-person specialist care.

Remote Physical Examinations

Although telemedicine proves effective for numerous health concerns, certain conditions necessitate more detailed patient assessment. Diagnosing illnesses like strep throat or ear infections requires a physical examination that cannot be replicated through virtual consultations alone. Consequently, innovative companies are emerging that integrate telemedicine with dedicated hardware solutions.

TytoCare represents a prime example of this trend. They provide a comprehensive platform that combines virtual doctor visits with wireless examination devices. These kits empower healthcare professionals to conduct remote, guided medical examinations. Alternatively, patients can utilize them for self-testing and health monitoring.

TytoCare offers distinct product lines tailored to different needs. These include TytoPro for medical professionals, Tyto Clinic for establishing remote healthcare facilities, and TytoHome for direct consumer use.

“TytoHome significantly enhances the depth of medical care accessible within the home environment,” explained Dedi Gilad, CEO and co-founder of TytoCare, in an interview with Extra Crunch. The kit enables patients to perform self-assessments or manage chronic conditions, supported by instructional materials on the TytoCare website.

Remote guidance from a physician during examinations is also a key feature. Furthermore, TytoCare’s latest solutions are being deployed to facilitate “home hospitalizations” for patients diagnosed with, or suspected of having, COVID-19.

“We’ve directly treated approximately 60,000 patients through in-home hospitalizations, minimizing the need for in-person physician contact,” Gilad stated. “This included a partnership with the University of Miami to monitor athletes for COVID-19 symptoms, tracking lung function, temperature, and blood oxygen saturation remotely.” He further noted its use for post-hospitalization care.

Having secured $152 million in funding, TytoCare currently serves over 350,000 users globally.

Pulse Diagnosis in Telemedicine

Maizhiyu, a Chinese company, is pioneering a different approach to telemedicine hardware. They have developed a digital device capable of performing “pulse diagnosis,” a fundamental technique in traditional Chinese medicine.

This technique involves analyzing a patient’s pulse at three specific points on the wrist to inform a diagnosis. The inability to remotely assess pulse rates previously hindered the adoption of telemedicine by traditional Chinese medicine practitioners, who are integral to the Chinese healthcare system.

Founded in 2018, Maizhiyu has raised ¥2.2 million (approximately $340,000) to date. The company’s innovation aims to overcome this limitation and expand access to telemedicine within this established medical tradition.

• The device allows for remote pulse rate measurement.
• It supports the practice of traditional Chinese medicine.
• It aims to bridge the gap between telemedicine and traditional healthcare.

Accessibility of Healthcare

The cost of medical attention in the United States is notably high, and access has historically been largely determined by insurance plans. Significant out-of-pocket expenses often restrict individuals’ choices of healthcare professionals, as their options are limited to those within their insurance network. Companies such as K Health are actively addressing this issue.

This telemedicine company provides consultations for a flat rate of $19 per visit, or a monthly subscription of $9 for unlimited access, frequently representing a cost savings compared to standard co-pays for traditional appointments. This pricing structure effectively eliminates the complexities associated with insurance claims and approvals. Since its inception in 2016, K Health has attracted over 4 million users and achieved a valuation of $1.63 billion based on $278 million in funding.

1Doc3, a Latin American company that recently secured $3 million in pre-Series A funding, is gaining prominence with a similar operational model to K Health. Recognizing the challenges of inconsistent internet access in the region, the platform utilizes text-based and chat-based communication. It leverages AI for symptom evaluation, initial triage, and preliminary diagnosis before connecting patients with a physician.

Following consultations, 1Doc3 also facilitates prescription delivery directly to patients. Furthermore, the company partners with employers to provide healthcare benefits to their workforce. Established in Colombia, 1Doc3 has expanded into Mexico, the second-largest market in the region after Brazil.

While initially founded in 2013, the company experienced substantial growth in 2020, with consultations increasing from 2,500 to 35,000 per month between February and December.

In Africa, Vezeeta, based in Egypt, is making significant progress in broadening access to healthcare. The company specializes in providing consultations for medical fields that may be difficult to access in developing countries, including oncology, dermatological care, gynecology, infertility treatment, diabetes management, and psychiatric services.

Vezeeta operates on a direct payment basis and extends its services to Saudi Arabia, Egypt, Jordan, Lebanon, Nigeria, Kenya, and other nations. Founded in 2016, the company has raised a total of $62 million in funding.

The innovative approaches demonstrated by these startups clearly indicate the enduring relevance of telemedicine. However, a key question remains: will patients who have adopted telehealth continue to utilize these services even when their traditional healthcare providers encourage in-person visits?

While in-person care will always be necessary, the potential exists for patients to address minor health concerns through online consultations, reserving more complex issues for their primary care physicians. A future challenge involves the seamless integration of medical records across all care settings, a task that will likely be addressed by a new generation of companies.