Digital health investment was unfazed by the epidemic
In the early stages of Covid-19, we knew that technology was going to play a role in enabling access, communication, diagnosis, and treatment—we just didn't didn't anticipate how much the digital health market would thrive during the epidemic.
But coming out of Q2, both technology startups and larger public firms in the telehealth, remote patient monitoring, behavioral health, and drug discovery sectors saw massive jumps in business demand as global economies adjusted to lockdowns, social distancing measures, and the search for a vaccine. In fact, organizations such as Rock Health and StartUp Health released their mid-year reports showing that digital health investment was on track to have its largest funding year ever. And Amwell even filed for an IPO to capitalize on the surge for remote telehealth services, showing again just how resilient digital health has been during an unstable economic period.
Covid-19 was a catalyst for change, pushing health care stakeholders to rapidly adopt and deploy technology platforms that could help support integrated virtual care delivery to not only treat ongoing patient needs, but also to make up for lost revenue from delayed elective procedures and medical visits.
To be fair, though, was a lot of this technological adoption driven by the actions of federal and state governments and insurance companies removing regulatory barriers? Of course. In the call to make virtual care delivery easier during the crisis, clinicians could remotely connect to patients (new and established) anywhere in the country, they didn't have to worry about penalties for noncompliance with HIPAA rules, and—most importantly--we saw payment parity between virtual and in-person visits.
So although these huge spikes in telehealth adoption were never going to maintain at their peak levels as sites of care reopened and lockdowns were lifted, the baseline adoption for virtual care technologies has certainly risen compared to pre-Covid levels—and it should (hopefully) sustain long after this epidemic passes.
Fortune favors the bold?
During periods of uncertainty, risk-averse organizations will often avoid making large-scale strategic shifts to avoid further volatility, but digital disruption requires a constant state of adaptation to stay ahead of the competition. The ability to continuously plan for the next stages of care delivery is what separates innovators from laggards. And while technology had already been on an exponential growth path the past decade, Covid-19 overnight changed business models, clinical practices, and the basis of competition in a way that makes IT-powered transformation a necessity.
So it was no surprise that companies such as Teladoc and Livongo had strong business performance in Q2, showing impressive growth in revenue and enrollment numbers. And given the complementary nature of telehealth and digital chronic disease management, the merger between the two firms makes sense—and given the context of Covid-19, it makes perfect sense. These two firms were going to come together either as competitors through ongoing acquisitions (Teladoc acquired InTouch Health for $600 million back in January) or partners, and they chose the latter.
From a business perspective, these organizations could have been content with their soaring stock prices across the first half of the year, but they are looking further down the line to anticipate how health care as an industry needs a coordinated ecosystem model. It is those organizations that develop the right strategic partnerships and embed the core fundamentals of a digital platform that can link together health care stakeholders into a care model that enables fluid data exchange, proactive interventions, and improved patient engagement. Those digital health firms that experience success but continue to keep an agile mindset to make quick and bold moves with their business are the ones that achieve first-mover advantages and scalability ahead of their competitors.
The fast track to connected care
As Covid-19 has sparked greater interest in the health-at-home model, there are clear benefits to linking up an online self-management program for patients to leverage mobile tools and connected devices for ongoing chronic disease management, digital coaching, and virtual check ins with their care providers.
And this is what digital health enthusiasts have envisioned for some time now: to embed technology seamlessly into patients' daily lives to continuously gather health metrics (e.g., diet, exercise, mental health), to remotely drive personalized care decisions, and to activate patients for sustained positive behavior change.
Some industry stakeholders may continue to think that virtual care can never replace the "gold standard" of in-person care, but to regress now, given what we've seen during this epidemic, would be lunacy.