Period of Renaissance for the High Acuity Telehealth Market
Published: June 14, 2023
Cranfield, UK, June 2023 – Changing requirements and shifting priorities of hospitals and health systems has had a profound impact on the structure and dynamics of the high acuity telehealth ecosystem. Signify Research has traditionally broken down the market into two key components: Tele-ICU/Clinical Surveillance and Clinical Examinations. However, movements towards hybrid models of care owing to labour shortage crises, inflationary pressures and resource constraints have catapulted tele-sitting and virtual nursing solutions at the forefront of telehealth service delivery.
The paradigm shift was on particular display at the ATA2023 Annual Conference & Expo conference in March, discussed in detail in this previous SPI: ‘A Broader, Interconnected High Acuity Ecosystem Emerges at ATA2023’. Health system demand for enterprise-wide telehealth solutions has driven an expansion in offerings from platform and service vendors, to address application settings and clinical domains beyond the traditional tele-ICU, clinical examination and medical support focus areas. In this insight, we explore the market drivers and opportunities in each of the high-acuity telehealth segments outlined in the diagram below.
Clinical Surveillance and Tele-ICU
Tele-ICU solutions, typically deployed within larger health systems, consist of command centres or hubs, designed to remotely monitor critical patients visually, alongside supporting analytics data, with the command centres deployed to monitor ICUs of a number of hospitals within a particular health system.
The TAM for at least the tele-ICU element of the clinical surveillance market is therefore determined by trends in the number of ICU beds, which aside from the US, remote clinical surveillance use has historically been very limited. An estimated 20% of ICU beds in the US were remotely monitored at the end of 2022, with an expectation to reach approximately 29% by 2027.
Shifting business models towards a SaaS/cloud-based solutions and an ever-increasing trend of vendors transitioning to OPEX/recurring revenue business models, easing initial platform implementation costs for health systems, will contribute to an increase in penetration rates compared to that seen over the last decade. Improved flexibility in terms of deployment and vendors increasingly developing configurable, modular platforms to cater to individual hospital requirements will be drivers for an increase in demand of remote clinical surveillance solutions.
This trend will also support the development of international markets, which have been particularly limited for centralised tele-ICU/clinical surveillance solutions, with a few pockets of success within regions such as India, the Middle East and smaller deployments in countries including the UK, Australia, and Japan. International adoption will also be driven by increasing hospital digitization, and as more sophisticated hospital IT (EHR, integrated care solutions, IoT) is increasingly deployed in parts of Europe, MEA, Asia and Latin America.
Philips has largely dominated this market over the past decade, holding around 20,000 ICU beds globally, with Hicuity Health historically being the largest service provider that has been able to scale through largely leveraging Philips’ eICU platform. Recent trends following on from the global pandemic have seen an increase in the number of competitors within this market, including both platform vendors and service providers such as Caregility, GE Healthcare, CLEW, Equum Medical, SOC Telemed (now Access TeleCare) and AMD Global Telemedicine. However, the question of whether Philips’ dominance is under threat or not remains to be answered.
Encounter-based Clinical Examinations/Medical Support
Encounter-based clinical examinations/medical support consist of provider-to-provider AV consultation, used to support emergent episodic requests, with solutions typically consisting of IT platforms and point of care devices. Prior to COVID the market grew steadily, though at a relatively slow pace with a limited number of vendors including Amwell, Teladoc (via its InTouch Health acquisition), AMD Global Telemedicine, GlobalMed, Access TeleCare and ViTel Net. The onset of the pandemic initially had a negative impact on the market resulting from reduced emergency department admissions for non-COVID related issues and lower volumes of elective surgery reducing levels of utilisation for some providers including Access TeleCare, which experienced a 13% decrease in revenues in 2020, directly attributed to the aforementioned factors.
Inflationary pressures and escalating cost concerns have also impacted the dynamic in which vendors engage with health systems. Third-party consultation service providers have increased in prominence as some hospitals look to outsource IT and monitoring services, resulting from high up-front costs, implementation limitations and staff capacity challenges. SOC Telemed’s 2021 acquisition of acute service provider Access Physicians for $194m, transition into the merged organisation Access TeleCare and overall recovery and revenue growth over the last 18 months highlights the growing presence of third-party providers, which have been particularly beneficial for smaller hospitals. Growth in non-US markets is dependent on whether this model can successfully be exported to other geographies, with only India having seen similar models applied successfully.
Financial performance of Amwell and Teladoc, the largest providers of clinical examination/medical support services, has been a hot-topic post-COVID, with FY2022 losses amounting to $272 million and $13.7 billion respectively, with the latter’s attributed to a write-off tied to the value of its 2020 acquisition of diabetes monitoring and remote monitoring firm Livongo. Though revenues for both companies grew (in areas largely not connected to high-acuity telehealth), a performance contrast remains between competitors such as AMD Telemedicine which have experienced revenue and footprint growth, particularly in international markets. As priorities move elsewhere (e.g. chronic care, behavioural health etc.) for Teladoc and Amwell, and vendors increasingly looking at the other application areas discussed in this insight, questions remain for the prospects of the episodic virtual clinical care market to be able to really scale. The market will certainly grow, but vendors are advised to also expand into the other domains explored in this insight.
Virtual Nursing and Tele-Sitters
Arguably the most notable shift within the high-acuity telehealth system is the expansion into 24/7 continuous monitoring platforms, outside of tele-ICU. Increasingly the development of hybrid models of care has resulted in the emergence of tele-nursing and tele-observation solutions, which often use similar technology as used in other high-acuity telehealth applications. Health system requirements have largely been exacerbated by severe staff-shortages, particularly in relation to registered nurses with high turnover rates and a declining workforce, attributed to high levels of burnout. Virtual nursing platforms have provided experienced nurses with increased flexibility and has enabled prolonged careers, with remote nurses operating via centralised hubs to free up bedside staff for hands-on patient care, reduce admission and discharge times and improve workflow efficiencies.
Similar trends have been seen with tele-observation platforms with health systems opting to transition to hybrid-care models, with the replacement of physical sitters through the use of AV continuous monitoring solutions and remote sitters who are able to monitor a number of patients simultaneously. The technology is designed to track patient activity and notify staff of any emergency situations via portable or mounted camera units. Hardware and platform providers such as AvaSure with capabilities for a single virtual attendant to monitor up to 16 patients through its TeleSitter solution, have been particularly bullish on the outlook for the adoption of continuous monitoring platforms.
AI capabilities through algorithmic and machine learning models often supported via an ecosystem of partnerships between established enterprise-telehealth providers and emerging AI focused companies offer a route to market. Caregility’s partnership with PeraHealth, developer of the Rothman Index (now acquired by Spacelabs) has the potential to propel the market further as predictive analytics tools are being used to monitor and learn patient behaviour to alert sitters and monitoring staff of high-risk or concerning activity and patient deterioration. Amwell’s partnership with Solaborate which leverages the latter’s hellocare platform is another example of a partnership approach to address this market. As the move to value-based care models continues, we can expect the adoption of AI-based solutions to increase in importance as health systems look to improve patient outcomes, clinical workflows and the efficiency of care delivery.
Summary of Medium-Term Outlook
The high-acuity telehealth market as a whole has largely failed to live up to expectations over the past decade. Growth in the tele-ICU market has been slow and confined to the US, with similar growth trends in the encounter-based clinical examinations market. However, the continuous monitoring segments of tele-nursing and tele-observation have injected new optimism. The rapid change in attitudes to virtual care that was ushered in during COVID is also now starting to have a significant, if delayed, impact on this market. With the wider issue of the staffing-crisis within healthcare institutions driving many IT decisions, high-acuity telehealth is now primed for a period of renewed growth and scale.
Reduction of initial deployment costs driven by cloud/SaaS based solutions, increased use of OPEX models and an expansion in the number of vendors and service providers supplying the industry have helped to change market dynamics and accelerate growth. Whilst the high-acuity telehealth market will remain much smaller than some of the other adjacent high-volume segments such as the primary care virtual care market, vendors and service providers addressing this market can look forward with optimism.
Signify Research’s Telehealth Market Intelligence Service provides subscribers with a rolling set of publications over a twelve month period that provide deep-dive analysis on the use of telehealth in a range of care settings and geographies.
The deliverables included in the 2023/2024 subscription are:
- Telehealth – High Acuity market (e.g. Clinical Surveillance, surgical/medical support) – Publication Date May 2023
- The Remote Patient Monitoring (RPM) market – Publication Date October 2023
- The Primary Care telehealth market – Publication Date February 2024
Signify Research’s 2023 report on the telehealth high acuity market is due to be published in June 2023.
Key Issues addressed:
- How large is the global telehealth high acuity market in terms of revenue and how will this change over the next five years?
- How is the telehealth high acuity market split between Tele-ICU/Clinical Surveillance and Clinical Examinations/Medical Support?
- What is the penetration of Tele-ICU/Clinical Surveillance into the overall base of ICU beds?
- Beyond the main ICU, which hospital departments are increasing their use of clinical surveillance solutions (e.g. ED, step-down, general ward, paediatrics, labour & delivery)?
- To what extent are trends towards enterprise-scale telehealth solutions driving market developments and M&A within the supplier base?
- How is the services market split between IT and Physician Support?
- How has COVID impacted the hospital telehealth market in different geographies?
About Hamir Harbham
Hamir joined Signify Research in 2022 as a Market Analyst within the Digital Health team. He holds a BSc in Economics having graduated from Loughborough University in 2022.
About the Digital Health Team
Signify Research’s Digital Health team provides market intelligence and detailed insights on numerous digital health markets. Our areas of coverage include electronic medical records, telehealth & virtual care, remote patient monitoring, high-acuity clinical information systems, patient engagement IT, health information exchanges and integrated care & value-based care IT. Our reports provide a data-centric and global outlook of each market with granular country-level insights. Our research process blends primary data collected from in-depth interviews with healthcare professionals and technology vendors, to provide a balanced and objective view of the market.
About Signify Research
Signify Research provides healthtech market intelligence powered by data that you can trust. We blend insights collected from in-depth interviews with technology vendors and healthcare professionals with sales data reported to us by leading vendors to provide a complete and balanced view of the market trends. Our coverage areas are Medical Imaging, Clinical Care, Digital Health, Diagnostic and Lifesciences and Healthcare IT.
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