Imagine attending a doctor’s appointment with the same ease that you use Uber (UBER) and Lyft (LYFT) to travel, DoorDash for food delivery and Amazon (AMZN) for shopping. Telemedicine companies are making that happen.
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And using your smartphone or computer to see your doctor is now several steps closer to being the norm.
The coronavirus pandemic is changing the way people consume health care as social distancing policies seek to curb the spread of Covid-19. The result could be the creation of a multibillion-dollar health care sector with almost limitless potential.
Telemedicine companies like Teladoc Health (TDOC) and medical technology companies like Dexcom (DXCM), iRhythm Technologies (IRTC) and Livongo Health (LVGO) have stepped in. Their premise is simple: In many cases, patients no longer need to physically visit a doctor’s office. A video chat can suffice.
“After this, everyone has done a videoconference call,” Teladoc Chief Operating Officer David Sides told Investor’s Business Daily. “If your grandparents or parents hadn’t been on Skype or a FaceTime call, they’ve been on one now.
“I think, with so many people quarantined, it’s made virtual care a necessity,” he said. “There’s not another option.”
Interest in telemedicine companies has skyrocketed amid the coronavirus pandemic. According to Atlas VPN, online searches for the keyword “telemedicine” hit a record in April. Its popularity soared 525% from January.
Telemedicine Companies See Their Stocks Soar
That interest has sparked Teladoc stock, which has doubled this year. Teladoc is the only publicly traded telemedicine company. The stock began trading in 2015.
Shares of other telehealth stocks have climbed too. Medical technology companies Dexcom, iRhythm and Livongo have charged up 65%, 82% and 131%, respectively.
Before, Teladoc saw revenue growing 20%-30% organically in the long term, Sides says. Now that telemedicine is “past the point of inevitability,” the coronavirus pandemic will stoke north of 40% growth in 2020, he predicts.
Telemedicine offers a one-two punch in health care. It allows patients to meet remotely with their doctor, limiting their potential exposure to Covid-19. And telehealth frees up doctors to physically meet with other patients with illnesses that require in-person diagnosis or treatment.
The value proposition is particularly obvious when it comes to juggling acute illnesses and chronic conditions, says Seth Denson, co-founder and chief strategist for GDP Advisors. GDP Advisors is a consulting firm that focuses on the health care supply chain.
“This isn’t to replace the interaction that I need to have on a regular basis with my doctor to do the poking and the prodding that is sometimes necessary,” he told IBD. “This is to weed out those (conditions) that we could probably diagnose (easily). ‘Yes, you have an upper respiratory infection, you probably need an antibiotic.’ “
Telehealth Companies Change Illness Management
The fast adoption of telehealth will also change how physicians manage chronic conditions, such as diabetes, cardiovascular issues or mental health disorders. In the U.S., 9% of all health care costs are generated by 6% of the population suffering from chronic illnesses, he estimated.
“It can allow doctors to engage, let’s say, with a diabetic who isn’t regularly taking their insulin or a potential heart-disease patient who’s not regularly taking their blood-pressure medication,” he said. “That is the way we will (keep) someone who could be treated though blood-pressure medication from becoming someone who ultimately has a heart attack.”
Telemedicine companies aren’t new. But their wares are seeing rampant adoption during the coronavirus pandemic.
In an April survey, Robo Global found the number of active users of telehealth companies tripled as Covid-19 spread across the globe. The research and advisory firm found 51% of U.S. consumers age 25 and older had used a telehealth company’s service.
Of those, 52% accessed telemedicine companies for the first time during the pandemic. More than nine in 10 respondents — 93% — said they would use telehealth services again.
Congress Spurs Telemedicine Acceptance
Much of this paradigm shift has come from on high.
Congress spurred telemedicine with its $2 trillion stimulus package in March. Under the CARES Act, medical groups could access $200 million to install technology needed for virtual doctor visits.
The Centers for Medicare and Medicaid Services also eased restrictions on telemedicine companies and doctors using those services. Starting March 1 and throughout the coronavirus pandemic, Medicare said it would pay physicians for telehealth services at the same rate as in-office visits.
Further, states began easing licensing restrictions. That let doctors from one state quickly obtain licensing to treat patients in another state. This tactic has helped ease overloaded health care systems in regions where Covid-19 is most prevalent.
Remote Health Monitoring Is Also Key
Telemedicine is just one small piece of a burgeoning industry, Robo Global senior analyst Nina Deka told IBD. Telemedicine involves virtual doctor visits. But the larger telehealth industry, also called virtual care, will include remote technologies and doctor-accessed devices.
This is where Dexcom, iRhythm and Livongo become more important. Dexcom sells body-worn devices that continuously track glucose for diabetics. IRhythm sells cardiac monitoring devices. Livongo connects chronic care patients with doctors via its remote-monitoring platform.
“What we’re seeing through this pandemic is an acceleration of people adopting these remote-monitoring capabilities and telemedicine,” Deka said. “Eventually, virtual care is going to underlie every facet of health care. Over the next 10 years we should see that, and we are in very early days.”
Livongo partners with telemedicine companies to provide remote-monitoring technology. It offers doctors real-time access to pertinent information for patients with chronic conditions like diabetes, hypertension, obesity and behavioral health issues.
Telemedicine Companies Benefit From Coronavirus
The telemedicine market is benefiting from the push to stay home during the coronavirus pandemic, Canaccord Genuity analyst Richard Close said in a recent note to clients. He sees remote solutions as enabling the early detection of health issues for at-risk patients.
A growing number of physicians have been drafted into the war on Covid-19. But that leaves a gap for patients managing chronic conditions. These patients are often at a heightened risk of serious complications of Covid-19, so it’s even more crucial that they stay home.
This is where remote monitoring becomes key, Livongo Health Chief Financial Officer Lee Shapiro told IBD.
“I believe the market will view this as being a watershed event for remote monitoring,” he said.
Robo Global’s Deka sees telemedicine companies providing the most benefits to behavioral health, chronic care and elderly patients. She estimates the opportunity for the mental health market to be at least $20 billion.
That’s in part due to the stresses of the coronavirus pandemic. In a May report, Teladoc found that 47% of respondents in a U.S. survey reported their mental health declined due to the Covid-19 pandemic.
Mental Health Visits More Than Double
Since March 1, Teladoc’s mental health visits for patients age 18-30 more than doubled over the prior two months, the telemedicine company said. Patients diagnosed with adjustment anxiety disorder increased 60%.
The pandemic has highlighted the need for mental health intervention, Gustavo Kinrys, Teladoc’s medical director and vice president of mental health services, said in a written statement. The need for help has been especially great among young people, he said.
“Seeking support to address mental health concerns is the new normal as more people choose not to bottle up their issues and keep them to themselves,” he said. “The call for support is trending upward and employers are working to help improve mental health education and awareness.”
Carlos Tirado, president of the Texas Society of Addiction Medicine, has seen increased interest in telemedicine services. Tirado works at CARMAhealth and treats people with substance abuse and concurrent disorders.
CARMAhealth shifted toward telemedicine before the pandemic. Now, roughly 90% of its offerings are available virtually. Mental-health care carries a stigma. Tirado hopes telehealth can surmount that.
“It takes a certain amount of will and courage for someone to show up or self report,” he told IBD. “But if you can do this from your home, through a secure and anonymous portal, it does enhance the likelihood someone is going to self report.”
How Big Could Telemedicine Be?
It’s a challenge pegging just how big telehealth companies could grow in the pandemic. Much depends on how regulators tackle security and reimbursement issues as quarantines lift.
In May, research firm Frost & Sullivan said the telemedicine market in the U.S. will grow sevenfold by 2025. In 2020 alone, the industry is expected to see 64.3% growth. Another firm, Stratistics MRC, calls for the global market to be worth $82.03 billion by 2027.
The possibilities sound like something out of a science-fiction movie. Robo Global’s Deka recounted the story of a surgeon in India who performed several surgeries remotely using a robotic system from Corindus Vascular Robotics, owned by German-based Siemens Healthineers.
Teladoc’s Sides notes it’s possible to have a robot deliver medicine in a hospital. Some hospitals are deploying Dexcom’s devices to keep tabs on diabetic patients.
Help From Afar
GDP Advisors’ Denson recalls the story of a physician friend in Texas getting a New York license to help ease the burden on local doctors. It was “all hands on deck” in New York at the height of the coronavirus pandemic. That meant chronically ill patients weren’t accessing care.
“What this has done is allowed doctors from Dallas or any other part of the country to be able to support the ongoing care management of those that weren’t suffering from coronavirus, but certainly could have a health care fallout condition as a result of not being able to engage with their doctor,” he said.
(Editor’s Note: An earlier version of this story incorrectly stated that a surgeon used a robotic system supplied by Intuitive Surgical. The surgeon instead used a system from Corindus Vascular Robotics.)
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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