Tag Archives: Telehealth

SPI Digital Health: The US Public Health Emergency Ends, but Telehealth’s Wait for Clarity Goes On

Healthcare providers and telehealth vendors could be forgiven for raising their collective hopes of a clear path forward as the US COVID Public Health Emergency (PHE) formally ended on 11 May. 

But any notion that the less restrictive measures that really launched telehealth in 2020 and 2021 would become permanent in law were dashed last month as another temporary set of extensions were approved.  

While any extension is better than none, they are no real cause for celebration. For a healthcare industry crying out for long-term legal and regulatory certainty around telehealth, virtual care and remote patient monitoring (RPM), the latest temporary extensions until this November (for drug prescriptions) and December 2024 (for a raft of other measures) smack of the US health authorities kicking the can down the road once again.  

The Signify View 

As the curtain finally came down on the PHE on 11 May, the US Drug Enforcement Administration (DEA) and Substance Abuse and Mental Health Services Administration (SAMHSA) were extending temporary legislation granting physicians powers to prescribe controlled medicines to patients virtually for another six months until 11 November. 

The move is one of several temporary extensions confirmed last month. Until December 2024 Medicare patients will still be allowed virtual consultations with physicians from anywhere (before the pandemic a patient had to sign in for a virtual consultation from a designated, CMS-authorised location, and this was almost exclusively in rural areas). Physicians, meanwhile, will still be able to provide a virtual consultation without first meeting the patient face-to-face. And audio-only communications for non-behavioural health consultations will also be permitted until the end of next year. 

The Backstory 

These emergency measures, along with the CMS relaxing compliance standards on IT used in virtual care platforms, the allocation of specific CPT and HCPCS reimbursement codes for virtual consultations and RPM, and the introduction of ‘payer parity’ (giving equal reimbursements for in-house or virtual ‘visits’) really launched telehealth. 

Yet almost three-and-a-half years on, the continued reluctance (or inability) of US lawmakers to pass legislation making emergency measures permanent is now keeping providers and telehealth vendors in limbo. 

But why the reluctance?  

Cost is one factor. Although in theory telehealth helps prevent adverse or acute events, virtual care also lowers barriers to accessing healthcare. As such it can, ironically, have the opposite effect of increasing overall healthcare costs. 

Any increase in the number of consultations (virtual or in-person) in a fee-for-service environment means greater amounts of reimbursement must be paid out. This money ultimately comes from the Medicare Trust Fund, and there are questions about the Fund’s solvency.  

It is therefore understandable why the CMS might have cost concerns. 

However, if cost containment is the CMS’s main motivation for extending the temporary measures by another 18 months in many cases, it is a short-sighted approach with potentially damaging consequences. Lacking visibility beyond December 2024, some providers will simply delay the implementation of new workflows and some vendors will defer investments in new platform innovations. The Acute Hospital Care at Home (AHCaH) initiative is a prime example of where uncertainty in relation to long-term reimbursement structures is hurting the industry.  

This at a time when the US healthcare industry, faced with rapidly escalating costs, a staffing crisis and myriad other challenges, needs better workflows, new investment and innovations more than ever. 

No Going Back 

Healthcare stakeholders are, however, starting to take matters into their own hands. For many ‘bricks and mortar’ providers, virtual care is already an integral part of the business model. Meanwhile, large organisations like retail pharmacies CVS and Walgreens are now making substantial plays in virtual care.  

There is a sense that providers and vendors have come too far down the track to turn back after December 2024.  

The mood music in Washington strikes a similar note. In the wake of its six-month extension to the medicine prescription rules last month, DEA Administrator Anne Milgram acknowledged that the agency was reviewing comments from the public and other stakeholders ‘in order to develop a permanent rule’. She added that the additional six months would enable the DEA to ‘find a way forward to give Americans that access (to telemedicine) with appropriate safeguards’. 

And the journey towards permanent legislation has, in fact, started. Reimbursements for virtual consultations in the fast-growing behavioural and mental health space in the US are now enshrined in law. As a result, behavioural and mental health patients will never again need to attend a CMS-designated ‘originating site’ to get a prescription.

Lawmakers will be watching closely at how this development pans out as they debate the four bills (Connect the Health Act, Telehealth Modernization Act, Protecting Access to COVID-19 Telehealth Act and the Telehealth Extension Act) currently doing the rounds in Congress. 

Concerns Contagion  

Concerns around the lack of visibility beyond 2024 extend beyond virtual consultations.  

The PHE was a driving force behind the so-called ‘hospital-at-home’ market. Here, the AHCaH initiative is still a temporary measure, and this is having a negative impact on the hospital-at-home RPM use case. 

Separately, for the second main pillar of RPM (chronic condition management), the reimbursement codes are already permanent. But the stipulation that RPM devices could only be prescribed for chronic conditions if the patient had already had in-person consultations with the provider was tied to the PHE, and was relaxed during the emergency. These more relaxed rules have again been extended on a temporary basis, but what happens after that is cause for concern. 

That said, in the ‘worst case scenario’ that the measures are rolled back and we effectively regress to pre-COVID days, the impact will be limited. Most patients with a chronic condition that needs to be monitored remotely maintain face-to-face relationships with their provider over time anyway. 

Kicking On 

While the latest extensions to temporary COVID-era measures are far from a disaster, they are not particularly helpful for a telehealth market looking to kick on having plateaued since 2022.

The US healthcare industry also needs that clarity of vision so it can address the big challenges of the day: the staffing crisis, making care more accessible to more of the country’s population, and driving the rollout of value-based care. 

The smart money, of course, is on the temporary measures finally becoming permanent when the latest extensions expire. 

In the meantime, the CMS would do well to look at how telehealth vendors and healthcare providers engage with commercial payers, where there is greater clarity in the longer-term structures of commercial relationships. Could government payers learn from this? 

The end of the PHE at least focuses minds and forces Congress to act. Come December 2024, providers, telehealth vendors and the American public will no longer tolerate any more uncertainty over the future direction of telehealth.  

In many respects, however, the point of no return has already been reached. 

SPI Digital Health: Telehealth Vendor Financials Q1 2023

Three months ago, Signify Research described the Q4 2022 and FY2022 financial results of Amwell and Teladoc as offering ‘grounds for guarded optimism in 2023 and beyond’. 

The macroeconomic picture has, if anything, become bleaker since then, and the two telehealth vendors’ Q1 2023 year-on-year (y-o-y) results are underwhelming at best. Both remain in a revenue rut, pummelled by soaring inflation, manpower shortages and the last vestiges of a COVID hangover. Amwell reported yet another quarter of near zero y-o-y growth, while Teledoc’s y-o-y revenue growth is modest. 

Despite this, the grounds for optimism referred to in early March remain, with a little more clarity on how Amwell and Teladoc might boost their revenues now emerging.  

The Signify View  

The latest quarterly results have a familiar ring. Amwell’s struggles continue, its Q1 2023 revenues 0.4% down on Q1 2022 at $64M. Net losses plunged, increasing 623% q-o-q to $398.50M, reflecting mainly a $330.3M one-off impairment charge. Discounted, the loss was $68.2M against revenues of $64M.

Teladoc’s revenues, while hardly cause for mass celebration, fared far better, up 11% on Q1 2022 at $629M. This was its lowest y-o-y quarterly growth rate since it went public in 2015 and the first quarter it has reported a q-o-q decline in revenues.  

Total visits for Amwell numbered 1.71M in Q1 2023 (1.775M in Q1 2022), although the number of ‘in-house visits’ (i e those Amwell provides with its own doctors rather than third-party health system doctors) rose. Teledoc’s visit numbers increased 4.9% in the quarter. However, again this was the lowest y-o-y quarterly growth rate for visits since it went public.  

Amwell Revenues

 Source: Amwell

Teladoc Revenues

Source: Teladoc

Flat Lining 

Amwell’s almost non-existent revenue growth is nothing new, of course. More noteworthy is how the company can reignite growth within its health system and health plan businesses, where it has consistently struggled to win new customers. Trying to sell more solutions to its existing customers is therefore the logical next step. 

It can do this by offering a selection of additional modules to health system customers, what it refers to as its ‘land and expand – from telehealth to ‘digital first’ strategy. These modules encompass virtual care tools across the entire patient journey. Amwell is one of just a handful of vendors offering enterprise-scale telehealth solutions across diverse care settings, from primary care to pre-admission and hospital and post-acute care, so it well positioned to execute on this strategy.  

This strategy also plays into the fact that health systems increasingly look for a ‘catch-all’ solution from one vendor to service all their needs, rather than buying point telehealth solutions across different care settings. It promises to deliver incremental success over time and start to increase revenue per customer. 

Aligning with VBC  

Amwell is also betting big on automated care programmes. These are workflow tools that can help guide providers’ longer-term care management strategies for patients that have, for example, been discharged from hospital or who suffer from chronic conditions. 

This is a ripe opportunity, and aligns closely with the value-based care (VBC) movement in the US. But it also comes with risk for Amwell. This is unfamiliar, and highly competitive, territory for the vendor. Babylon Health, Signify Health, VillageMD, some retail players and primary care management organisations like Aledade all specialise in structured care management programmes, and are also developing their own virtual care services and platforms for health providers, which is Amwell’s traditional stronghold. Amwell will need to dislodge, and there is no guarantee that it will be successful. 

Positive Behaviour 

As with its health systems business, Amwell has also had problems growing its health plan customer base, and so here as well it can now intensify its focus on boosting revenue per existing customer, something it has already had success in doing (see figure below). It can do this by moving away from its legacy business and into new markets like behavioural health. 

Amwell acquired UK mental health platform developer SilverCloud Health in 2021, and focusing on behavioural health makes sense given the strong momentum in this market in the US in particular. This is also a competitive arena, however, in which Amwell has a relatively small footprint. Further acquisitions will be necessary if it wants to make meaningful inroads in the US and internationally (a route it has yet to fully exploit).   

The company is acquisitive by nature. In 2021 it spent $320M on SilverCloud as well as Conversa Health, for example, but this was at the giddy heights of the COVID boom. In 2023, against a more sombre backdrop of losses and shrinking funds, acquisition will be less palatable.  

Amwell Revenues Per Customer by Customer Type

Source: Amwell

Brighter Picture 

As in previous quarters, the Teladoc story also improved little in Q1 2023 q-o-q, although overall the picture is brighter than its rival. Revenues were up 11% y-o-y at $629M and, unlike Amwell (which effectively loses $2 for every $1 it makes), Teladoc reported just a narrow negative EBITDA of –$7.3M in Q1 2023. It is tantalisingly close to profitability. 

And, while its US revenues fell, its international business (which accounts for a smaller chunk of the business overall) experienced rapid q-o-q growth, highlighting the benefits of Tedaloc’s geographical diversity (which Amwell lacks). 

However, if anything highlights the visionary gulf that exists between Teladoc and Amwell, it is in mental and behavioural health. While Amwell is only now making moves into this buoyant market, Teladoc was acquiring BetterHelp, the digital mental health platform, back in 2015. BetterHelp now has 460,000 members, a far smaller number than Teladoc’s traditional integrated care and video consultation business, but, tellingly, it makes a lot more money from each BetterHelp member.  

Beyond behavioural health, Teladoc has a solid, well established customer base, and the experience with success and mistakes along the way. Where Amwell has been more conservative and circumspect, Teladoc deftly diversified into areas like behavioural health and chronic care management long before its rival. 

Grasping the Moment 

Amwell has, in a way, done the easy part by deciding its strategy on increasing revenue per customer rather than chasing new customers. The hard part will be executing this in highly competitive areas, amid very challenging macroeconomic times and with its hands tied to an extent by its own financial circumstances. It has also shed hundreds of jobs in the past year. 

The fact it is unable to grow its customer base leaves it vulnerable to churn. As nearly all health systems and health plans now have relationships with telehealth platform or service providers, this is not the greenfield opportunity it was three years ago. Back then, there were many potential customers who had no solution in place.   

Unfounded Optimism? 

Curiously, Amwell has also recently indicated that it needs to generate $500M in revenues just to break even. Given its performance over the last four years (when annual revenues inched from $245M to $280M), with a zero-growth forecast for 2023 and with limited cash to fund its strategy, $500M seems far off. It will need to hit the metaphorical jackpot with its growth strategy, which is unlikely. 

And so, while Teladoc has been slowly slotting the various parts of its jigsaw into place, the pieces of Amwell’s jigsaw remain scattered across the drawing board. Both vendors are navigating incredibly challenging operating conditions, and both must find ways to cut costs substantially in the current environment. But with solid foundations and foresight, Teladoc says it can achieve 11% revenue growth this financial year, where its rival predicts none. It will be many more quarters of disappointing revenues before Amwell turns the corner. 

SPI Digital Health: The Hanging Questions of Babylon

Last week, Babylon Health announced that it had secured a $34.5M interim loan to support ongoing operations as it embarks on a wide-ranging restructuring and re-capitalisation programme. At the same time, the company said it would come back into private ownership next month.  

The news comes as the UK-based provider juggles widening net losses, mounting debts and rock-bottom shares, despite burgeoning revenues from its US value-based care (VBC) activities. 

The bridging loan and delisting plan are the latest in a stream of efforts by Babylon Health to slash losses and restructure debts with the goal of becoming profitable. Last year the company, which offers virtual, in-person and post-care services in 15 countries, said it aimed to cut annual costs by $100M. 

Babylon Health says the interim loan, which is part of a framework agreement with VC firm AlbaCore Capital, will buy it time to implement the restructuring and re-capitalisation programme. The company says the loan will strengthen its balance sheet and provide additional liquidity to support the privatisation plan. Under this plan, Babylon Health’s core operating subsidiaries will be sold to a new entity capitalised by AlbaCore and other investors.  

The Signify View 

With losses widening, Babylon Health has little option but to take these latest steps in its battle for survival. The company has, over the last two years, tried several different approaches to stem the tide of losses and, in its words, ‘provide sufficient capital for Babylon’s funding requirements through profitability.’  

It sold consumer health engagement firm Higi at the end of the last quarter, having acquired it just months previously. The company has also signalled its intention to sell Meritage Medical Network, which has around 700 specialist and primary care physicians and which generates $400M in annual revenues. Babylon also received an $80M private placement 12 months ago (as part of its 2021 IPO) to support the business. It has also made substantial job cuts. 

But Babylon’s main problem remains: the soaring costs it faces to provide care services to customers (it provided 5.1M consultations in 2021). Between Q1 2022 and Q1 2023 losses widened to $63.2M from $29.1M. For every dollar Babylon earns, it loses money, a situation also faced by telehealth giant Amwell (which we detail in this Insight).  

Babylon’s total Q1 2023 revenues were a healthy $311.1M ($266.4M in Q1 2022), but the faster its revenues grow, the faster its losses are mounting. Achieving scale is coming at a big cost. 

State-Side Shift 

This double-edged sword has its roots in a 2021 decision by Babylon Health to shift its strategic focus. 

Formed in 2013 in London, the firm cut its teeth with the NHS in the UK. But its presence in that market was unpopular with the predominantly small primary care GPs practices in the country. They were wary of what they saw as a large, VC-backed provider coming in and poaching their young and healthy (ie cheaper to care for) customers, and leaving them with more complex, older and costlier patients. 

Realising their UK business was never going to properly scale in that environment, Babylon Health pivoted to the US value-based care (VBC) market in 2021. The decision was quickly vindicated, and this market now accounts more than 90% of the firm’s total quarterly revenues. For example, of its total $289M Q4 2022 revenues, it earned $268M from providing services directly to patients, or by outsourcing services to third-party providers, under Medicaid, Medicare and commercial insurance VBC contracts.  

While the rapid uptick in revenues in impressive in and of itself, growth is easy if you’re willing to make a loss to achieve it. Babylon Health’s success in the US VBC market is therefore both a blessing and a curse, especially when it was assumed that by scaling, profits would materialise. 

The SPAC Curse 

This is not the only strategic curse to have struck Babylon. At around the same time as it was pivoting to VBC in the US, the company decided to list on the US market to cash in on surging demand for its virtual care offerings at the height of COVID. It wasn’t the only vendor to jump on the IPO bandwagon at the time – SOC Telemed (via a so-called Special Purpose Acquisition Company (SPAC) listing) and Amwell (via a traditional IPO) did likewise – believing the hype generated by massively elevated interest in telehealth. History now shows that telehealth companies were overvalued and short-sighted. They listed, the pandemic receded, and virtual care demand growth decelerated. Share prices collapsed, and never recovered. 

In Babylon’s case, its listing via a SPAC merger was, in its CEO’s words, a ‘disaster’. A SPAC listing effectively means the target company (e g Babylon) merges with a ‘blank cheque’ company (the SPAC) set up solely to raise capital through an IPO. SPAC listings were trendy in 2020 and 2021. VC firms and investment houses, in particular, found them an attractive vehicle to raise money from the public and then deliver much-needed liquidity to their merger target companies. 

And so, during the SPAC boom Babylon Health’s merger with SPAC Alkuri Capital was approved. The deal promised $575M from the listing for Babylon, but things quickly went downhill. Uniquely with this type of listing, even if a merger has been approved by a SPAC’s shareholders, they are able to cash in their shareholdings at any time, including pre-merger.  

Unfortunately for Babylon, 90% of Alkuri Capital’s shareholders opted to do just that shortly before the deal went through. Babylon was left with just $275M, a significant shortfall on the original, and its shares fell off a cliff. This then set in motion the chain of events we described earlier in this Insight as Babylon scrambled to recover from the blow. 

The SPAC boom was short-lived, and Babylon Health was one of several ‘victims’ of it. The 10% of Alkuri’s investors who chose to keep their money in the business could also be excused for feeling like victims in this too. As Babylon goes private again next month, much of their money will vanish with the deal.   

The Long, Lonely Road to Profitability 

While its SPAC experience has been serious for Babylon, the company has since fought hard to restructure its debts, raise funds and cut costs to keep heads above water. It has succeeded in the sense that it is still a going concern, and it has an admirable VBC model in the US. 

But the path to profitability remains a painful one, and Babylon Health will need deeper costs cuts. But how?  

The company’s losses indicate that it is unable to deliver care within the budget of the VBC contracts under which it operates. To do so, it needs to be more proactive and predictive in managing population health; for example, better managing those with chronic conditions, reducing hospital admissions/readmissions, knowing who to screen and ensuring all patients undergo an annual wellness visit.  

It also requires investment in better resource care management teams to manage more expensive patients, in better IT to fully understand its populations and facilitate risk stratification, and in population analytics so Babylon knows where to prioritise resource. A long-term investment approach, where losses can be absorbed until financial savings are realised, is needed.  

The company has already shed assets that would have helped it offer that more proactive care. Higi was a VBC-geared provider offering BMI and other health screening services in US retail outlets.  

Double-Edged Sword 

There is no doubt that Babylon Health can be a serious disruptor in the US VBC vendor market. But its biggest enemy right now is its own success in quickly growing its customer base, which has led to growing losses.  

The bridging loan and the re-privatisation plan buys time, and in a business bleeding money and accumulating debt, time is arguably its most precious commodity right now. 

SPI Digital Health: Philips Virtual Care Management: More Than a Remote Chance of Success

As the patient care pathway moves steadily away from the hospital, Philips launched its new Virtual Care Management platform in March. The company says the platform will offer a ‘comprehensive’ approach to telehealth for patients, providers and payers, improve patient engagement and health outcomes, lower the cost of care, and make workflows more efficient. 

The Signify View 

Philips Virtual Care Management brings onto a single platform the company’s legacy remote patient monitoring (RPM) business as well as the chronic disease management capabilities of BioTel Care, the RPM arm of BioTelemetry (BioTel). Philips acquired BioTel, a powerhouse in the cardiac monitoring market, in 2021. 

The launch of Virtual Care Management in the US market is the latest move by Philips to deepen its roots in the burgeoning home care market in the country. The BioTel acquisition provided Philips with the technology to advance its own RPM and chronic care management business, where it had been a tier-2 vendor. 

BioTel Care accounted for less than 10% of BioTel’s total revenues when Philips made the acquisition, but it brings a number of strategic and competitive advantages to the table. Two years on from the acquisition, Virtual Care Management is, therefore, a powerful prospect. 

On Point 

Philips claims that the Virtual Care Management platform will reduce pressure on hospital staff and reduce the cost of care by managing chronic disease more efficiently. The platform will leverage BioTel Care technology targeting condition-specific protocols including diabetes, hypertension, heart disease, chronic kidney disease and chronic obstructive pulmonary disease (COPD), as well as gestational programmes for diabetes and hypertension.  

Generating data and actionable insights, Virtual Care Management goes beyond the ‘traditional’ capabilities of RPM solutions, says Philips. 

Many Rivers to Cross 

While that may be true, the success of RPM solutions and their vendors is typically determined by the reimbursement models that support them. In most geographies RPM does not have as clear a reimbursement structure as the US, and to date Philips’ Virtual Care Management platform has been launched exclusively in that market. 

The Virtual Care Management platform targets the clinical chronic care management programmes that have been eligible for RPM reimbursement for a number of years now. However, Philips’ ability to really disrupt the US chronic care management market is far from certain: actual reimbursement volumes remain stubbornly low, covering just a few hundred thousand lives being managed to date. No vendor has yet been able to scale successfully in this environment, and is also an extremely competitive space. Philips will have its work cut out here too with the Virtual Care Management platform. 

Home Truths 

Where the platform could fare better is in the emerging ‘hospital-to-home’ market (as opposed to the ‘hospital-at-home’ market). Hospital-to-home relates to supporting the transition of patients from acute to post-acute settings using virtual care. Specifically, Philips is not targeting the ‘hospital-at–home’ market, the segment that relates to supporting patients at home via the use of technology, that otherwise would still require support in an inpatient setting. This is currently reimbursed in the US by the Acute Hospital Care at Home (AHCaH) waiver programme.  

Philips does not refer to this in relation to the press material accompanying Virtual Care Management, but it ties in closely with the goals of reducing the costs of care (i e Value Based Care (VBC) and alleviating pressure on hospital staff. 

This, understandably, is an interesting area for Philips and the Virtual Care Management platform aligns nicely with hospital VBC contracts and other fee-for-service reimbursement codes.  

Unlike in RPM where reimbursement is a one-off payment for a service provided (for example, every time a vendor ships a device, or monitors a patient, it gets paid), hospital-to-home VBC reimbursement takes into account a range of criteria, for example rewarding a hospital for preventing patient readmission. It is a lump-sum payment for which the vendor takes a cut, and which covers the hospital’s cost of providing care and then (hopefully) leaving some profit. It is a win-win situation for both parties. 

Contrast that to hospital-at-home, which Philips is not specifically targeting. This strategy is sound: currently around 200 US hospitals are licensed to provide hospital-at-home services under the Acute Hospital Care at Home (AHCaH) waiver programme, but the actual number of people whose managed care has been billed for this is very low – just a few thousand at most. We wrote in this recent Insight that the hospital-at-home market had yet to take off, but that has not deterred provider Atrium Health and Best Buy Health, a unit of the world’s largest speciality consumer electronics retailer, taking the plunge as partners. 

But, given the need to educate patients and enable technology in their homes, hospital-at-home is more complex than hospital-to-home. Uncertainty around longer-term reimbursement has also deterred many providers from going down this route. The current AHCaH waiver programme was extended by the CMS until May 2025, but the scheme is a hangover from COVID emergency measures. Uncertainty over what happens after May 2025 continues to act as a brake on this market, and yet like RPM, it is a very competitive area dominated by start-ups. Philips will do well to steer clear from it, at least in the short-term. 

Feeling the Love 

As it rolls out Virtual Care Management, Philips might draw inspiration from the success of BioTel Heart, a leader in the mobile cardiac telemetry market and whose wearable ECG devices have been very successful. But it is a more rounded service – Philips provides not only the device but also the data monitoring services and report generation capabilities that takes pressure off hospitals and ambulatory care providers. It follows, then, that in terms of its Virtual Care Management platform, Philips will not be a pure chronic care device supplier per se. Elements of the legacy Biotel Heart service can be used in conjunction with the Virtual Care Management platform and services to provide patient pathways that allow for technology to be used to support patients remotely. This can be from diagnosis to on-going monitoring (particularly in relation to heart rhythm disorders). It will take readings remotely, physicians (and algorithms) will pore over and analyse the data, and prepare a report that is then sent to the hospital with a diagnosis. This is a tried and trusted formula in ambulatory cardiology in the US, and would translate well in chronic care management. In essence, Virtual Care Management therefore makes money from the service, not the device. 

Fighting Chance 

It is against this backdrop that vendors are now playing in the chronic care management market. It is an intensely competitive space where success is defined as much by the quality of solution as the reimbursement structures in place for each solution. These factors pose significant challenges for vendors and limit their ability to scale. 

And yet, if any vendor can make a success of this, it is Philips. The company already has an impressive, well-rounded installed base in the US hospital monitoring and remote diagnosis markets, which provides a good link into the process to then move patients out of the hospital and to the home.  

As such, Virtual Care Management gives Philips a fighting chance to drive success in the hospital-to-home market, and really push back against the crowd of start-ups vying for a piece of the action.

Signify Premium Insight: A Broader, Interconnected High Acuity Services Ecosystem Emerges at ATA2023

Telehealth is undergoing a metamorphosis. From a market of relatively unsophisticated ‘one-size-fits-all’ low acuity solutions, a shift towards high acuity is under way.  

This shift was discernible at the American Telemed Annual Conference and Expo (ATA2023), held earlier this week in San Antonio, as vendors – both well established and new market entrants – showcased an array of specialist solutions reflecting that move up the value chain.  

The Signify View 

ATA2023 is a reliable barometer as any of telehealth’s current direction. First impressions were of a quieter than expected show floor. This is perhaps no surprise for vendors, who in the current business environment must be more selective than ever about where they spend their marketing budgets. The competing charms of HIMSS in Chicago (a favourite of the large US providers) loom next month, while ‘trendier’ exhibitions such as ViVe (in Nashville later this month) and HLTH in Las Vegas later in the year are also vying for marketing dollars. Teladoc was conspicuous by its absence from the ATA show floor, and Philips (along with many other vendors) opted for smaller booths than usual. 

But while the more sedate atmosphere in San Antonio confirms the end of telehealth’s frenzied, Covid-fuelled days, it also indicates a change in vendor focus. Mass market, low margin, low acuity solutions still have their place, but high acuity telehealth is forecasted to grow steadily to 2025 (see chart below). As a result, specialist solutions for a wider cross-section of healthcare needs are emerging, with several on show at ATA. 

Broader, Interconnected Ecosystem 

The main takeaway from ATA is that high acuity telehealth is now moving beyond its teleICU and Clinical Examinations and Medical Support roots. A broader, more interconnected ecosystem of different high acuity telehealth services is emerging (see graphic below) in which tele-sitting (observation), tele-nursing and solutions for non-ICU settings are gaining traction. Established players such as Philips, Amwell, Teladoc, AMD Global Telemedicine and GlobalMed are being joined by new vendors here, and ATA was an opportunity to engage with some of them and understand how (and where) their solutions fit. 

Telehealth’s Interconnected Ecosystem

Necessity the Mother of Invention 

Until relatively recently, high acuity telehealth vendors kept a narrow focus on solutions for teleICU, clinical examinations and medical support, in high demand during Covid. However, the post-Covid period has introduced fresh challenges for healthcare providers, not least significant cost pressures and chronic staffing shortages, and this is influencing the development of new patient monitoring methods and technologies. 

While ‘tele-sitting’ is not a new concept per se, the traditional, simple AV monitoring platforms it relied on were basic and error prone. Those monitoring patients were often unable to decipher between ‘normal’ behaviour and behaviour that could be cause for concern. This led to problems with ‘false positives’.  

AI has the potential to mitigate this problem, and care.ai, VitalChat and Andor Health were at ATA to promote their technologies in this respect. Established telehealth vendors like Amwell, AMD and GlobalMed are also moving into this space and building AI into their portfolios, often in partnership with AI vendors. For example, Amwell is integrating [AI developer] Solaborate’s Hello Care solution into its Converge platform, part of its shift from encounter- and cart-based monitoring to continuous ‘tele-sitting’. 

Leading platform vendors and monitoring service providers such as Caregility, Equum and HiCuity are now promoting tele-sitting as a key part of their portfolios, and Philips says it is also moving into this area via partnerships with several of these companies. 

Nursing the Industry Back to Health  

Chronic nursing shortages are also driving developments in ‘tele-nursing’, and this was high on the agenda in San Antonio in keynote presentations, panel discussions and vendor marketing. 

Although in its embryonic stages, vendors and service providers have high expectations for tele-nursing, and Philips, Caregility, Andor Health, AvaSure, GlobalMed, AMD and Amwell all see significant potential in it. Most already have clinical examinations and medical support platforms in place, and view tele-nursing as an attractive (and relatively easily achieved) new revenue stream. 

Increased demand for tele-nursing services will also play into the hands of companies like HiCuity, who offer only monitoring services. Discussions with HiCuity during ATA emphasised the point that, while core services such as teleICU are growing, greater growth is being seen in newer applications such as tele-nursing. 

Moving Beyond the ICU 

Another trend observed at ATA are moves to apply teleICU technology in non-ICU settings such as med-surg units, step down wards, general wards and neonatal ICUs. Vendors have been pushing the message for several years that this route offers significant upside, although progress in developing and realising the opportunity has been slow. Philips remains the master of the teleICU universe (and continued to push the predictive elements of its established eICU solution at ATA), but other vendors present in San Antonio have ambitions to dislodge its crown.  

Israeli start-up CLEW’s FDA-approved algorithms (which we explore in depth in this recent Insight), Turkish vendor Cieba’s eClinics Platform and AMD’s new AGNES Connect teleICU solution all generated lively discussion on the show floor. CLEW was very vocal about how it would erode Philips’ market share, the multinational countering this by insisting that it continues to win new customers and retain existing ones. If they are to seriously challenge Philips, it is clear that these ‘new’ market entrants will have to build trust among customers that they have a great solution and that they can scale.  

ATA also saw a focus on predictive tools for use in high acuity settings. PeraHealth (now owned by Spacelabs) and Ambient Clinical Analytics are two AI vendors active in this space. During the show PeraHealth demonstrated how its predictive AI embedded into Caregility’s solutions is helping hospitals predict deterioration in patients, thereby improving ward management efficiencies. 

New Expenditure Models in Focus 

Another talking point at ATA was how to make teleICU more accessible to smaller hospitals. teleICU implementation is notoriously expensive, with high upfront hardware costs and the possibility of workflow disruptions during implementation. This has often been a barrier for smaller hospitals, who would outsource their teleICU technology implementation and monitoring operations to service providers like HiCuity.  

However, teleICU vendors are now offering lower cost of entry to providers wanting to procure their own technology, moving from CAPEX to OPEX models where the cost of hardware implementation is absorbed in rolling monthly SaaS-based solutions. The increased general use of virtual workflows is also supporting this trend. To some extent this will present a challenge to these service providers as healthcare providers take advantage of this lower cost of entry to bring teleICU in house.  

Window into the Future 

In our ATA pre-show predictions (see them here) we said that vendors’ solutions would double down on supporting individual specialities, and in San Antonio this played out. 

One obvious by-product of the shift to high acuity is increased competition within the new, interconnected ecosystem we refer to as the different players position themselves. Whether GE will be part of this new ecosystem remains to be seen – it launched Mural, its teleICU/remote clinical surveillance solution, several years ago, but was notably absent from the floor at ATA this year.  

Moving from encounter-based, episodic models of care/platform to continuous monitoring platforms, and vice versa, will not be easy for some players in this new ecosystem. A shift in mindsets, and a reliance on ever more sophisticated technologies, will be required. But it is a path that must be taken, or risk being left behind.