The virtual healthcare market is growing fast, as more and more consumers demand a healthcare system that embraces the conveniences of modern technology.
The virtual healthcare market is booming. How much so depends on whom you ask. But the upward trend is undeniable.
A recent report by Verify Markets on the 2016 US virtual healthcare market forecasts revenues to reach more than $3.5 billion by 2022, with a compound annual growth rate of 49.8%.
Ray Costantini, MD, founder and CEO of Bright.md, believes those numbers are underestimated.
“With the response that we’ve already seen from both providers and patients, I think this is going to rapidly become an expectation for a large chunk of healthcare delivery,” Costantini says.
Juan Molina, vice president of strategy and business development for CareCloud, agrees.
“From the chair that I sit in, it will definitely be something huge for practices and patients alike,” she said.
Assessing the Growth
Molina believes there are two main factors fueling the growth of the virtual healthcare market. The first is the cost curve.
“[The virtual healthcare market] has the markings of a growth industry and the opportunity to reduce costs, which is a great thing,” Molina says. “If you can improve patient outcomes, patients get healthier, and you drive down your costs.”
The second factor, Molina says, is the modern tool set that virtual healthcare puts in physicians’ hands. He refers to point solutions—those existing or emerging solutions that “sit at the periphery of healthcare” and are now being used to tackle specific issues, like telehealth, access to care, and care coordination.
“This has happened in other industries where companies have set out to fix the electronic document signing problem,” Molina explains. “It gave rise to things like docu-sign and echo-sign. We’re now seeing this play out in healthcare.”
Costantini says consumer, or patient expectations, are also driving the growth of the virtual healthcare market. Convenience is king, he says, in almost any consumer-facing service.
“I can shop online, I can do my taxes online, I can even order a pizza and watch it being made online,” he says. “Why is it I can’t get care for my urinary tract infection online? I think there is an increasing market readiness.”
Molina echoes those thoughts. He explains that consumers expect the physician community, whether it’s the local doctor or hospital, to embrace the types of technology that consumers themselves use in their daily lives.
“They’re expecting to schedule a medical appointment and have the doctor leverage these same modern tool sets,” he says.
More importantly, Molina says that from a clinical perspective, the virtual healthcare market supports coordinated care activities, which ultimately lead to better outcomes.
“If I have the right tool set, that allows me to support those initiatives,” he says. “The patient wins, and the provider wins. And on the provider side, it opens up revenue opportunities.”
Costantini says the healthcare market is experiencing a 30% shortfall in of primary care provider supply, relative to a demand that is exploding. And that demand is what encouraged him to launch Bright.md, an online telemedicine solution for non-acute symptoms.
“I’m regularly inspired by the fact that we spend 20% of our GDP on healthcare, and we don’t see the results to match,” he says. “If we’re going to spend two to three times what other developed nations spend, we should have really good outcomes to show for that. And we don’t.”
What’s most frustrating, Costantini says, is that physicians have put their patients in a frustrating and painful position of forcing them to choose between convenience and predictable, reasonable pricing on the one hand, and a trusted relationship with their primary care provider on the other.
“We have folks like Walmart who’s stated goal is to be the largest primary care provider in the country,” he says. “As a provider, that frightens me. And as a patient, that’s not what I want.”
Looking at the projected growth of the virtual healthcare market, it would be easy to say that, above and beyond the clinical benefits of the technology, investing in this market makes perfect sense. But hold on. There are definite challenges to successful investing.
“There are a lot of options out there, and only a few of them are truly creating value,” Costantini says. “You have to have a pretty good sense of what’s going to differentiate them, particularly with an early stage company.”
He points out that, while there are certainly opportunities to be had by investing in high quality companies, the majority of startups fail.
Molina agrees. He says it remains to be seen if the proliferation of companies in the virtual healthcare market can fully execute on the vision of reducing costs.
“But there is a huge growth opportunity, and that becomes very attractive to an investor.”