Video thumbnail of telehealth and how it impacts Advent International healthcare investments

Advent Insights

Why telehealth is a revolution whose time has come

Justin Mundt and Julian Woollard

March 30, 2021

  • Covid-19 has proved that patient care can be delivered effectively using digital tools
  • Rapid growth of technology-enabled delivery of care shows existing barriers to adoption can be overcome
  • Advent will continue to back innovation with the potential to transform healthcare businesses

Telehealth is a simple concept, and one uniquely attuned to the digital age: the World Health Organization defines it as “the delivery of healthcare services where patients and providers are separated by distance.” Yet despite all its promise to improve patient care, it has taken a global pandemic to trigger its mainstream adoption.

The change has been swift and far-reaching. Research published by the Centers for Disease Control and Prevention (CDC) cited a 154% year-on-year rise in telehealth use in the US as early as the final week of March 2020. The same story emerges across primary-care practices in England. The Royal College of General Practitioners found that 71% of routine consultations were being delivered remotely as the Covid-19 crisis reached its first peak in April 2020. This is almost an exact reversal of the figures a year before (70% face to face).

While this take-up was driven by the necessity for physical distancing, the future expansion of telehealth will be down to convenience, cost savings and its ability to solve accessibility challenges – such as extending vital services to users in remote areas.

What’s more, the pandemic has started to sweep aside some of the legacy obstacles to telehealth adoption. These include the historically slow penetration of digital technology into the healthcare delivery sector, reimbursement paradigms focused on in-person care models, and the patchwork of differing regulatory regimes, some of which are still bound by rules drafted for a pre-digital age.

Encouragingly, the speed at which some governments have passed emergency measures to extend telehealth – including legislation such as the Coronavirus Supplemental Appropriations Act in the US – shows that given the political will, the obstacles can be overcome.

Limitless potential for disruption
While recognizing the value of video consultations and similar channels in delivering primary care services, we’ve always taken a far broader view of the sector. We see technology-enabled delivery of care both as a distinct investment sub-sector and a value-creation lever for companies across almost every part of the healthcare sector. In both regards, we expect to see the rapid growth trajectory triggered by Covid-19 to continue.

As long-term healthcare investors with a strong technology franchise, we track the most innovative applications wherever they appear – such as smart joint implants that alert physicians when they need replacement; virtual assistants that can oversee medication use for seniors in care settings; physician-to-lab transactions, like the transmission of dental scans in place of physical molds; or even remote monitoring programs to facilitate large-cohort trials for pharmaceutical firms.

Telehealth has the potential to create transformative change in healthcare businesses. When looking at investment opportunities, we assess where these technologies are likely to gain the most traction and provide the greatest benefit.

The Institute of Healthcare Improvement’s ‘Triple Aim’ provides a useful framework: will it provide a better care experience for the patient, improve health in the population, and reduce the per-capita cost of healthcare?

An expert eye on the sector
As an early telehealth adopter with more than a decade’s worth of insights, contacts and diligence, we have a privileged perspective on the sector dynamics and the many and diverse ways in which it continues to grow.

Our first direct investment was in 2015, when we backed Genoa Healthcare’s acquisition of 1DocWay – now Genoa Telepsychiatry. This enabled our portfolio company to roll out remote psychiatric appointments, offering mental-health center partners a valuable service to complement in-facility. One year on from the acquisition, around 50 of these community locations were offering the service.

More recently, ATI Physical Therapy managed to design a national telehealth platform, ATI Connect, in just 20 days during the early part of the pandemic. Within four weeks of launching, it had attracted almost 11,000 patient visits. As in-person consultations resume, ATI Connect will continue providing high-quality physical therapy to patients who are not within easy reach of ATI clinics.

Mediq, a leading European medical equipment and service provider, supports more than 600,000 people in managing their chronic diseases at home. The company’s DiaCare program enables people with diabetes to share their glucose levels with healthcare professionals remotely, driving down the frequency of in-person hospital visits. It also provides access to e-learning materials, facilitates personalized consultations, and automates delivery of products and medication.

Also in Europe, DFG – Germany’s largest outpatient care provider – is installing remote monitoring of patients’ vital signs, and trialing two new telemedicine applications to improve remote access to physicians.

Vitaldent, which operates a chain of dental care clinics, is exploring several telehealth applications including a remote diagnostic tool using artificial intelligence, virtual appointments, new 3D scanners and AI assistants for frequently asked questions. The remote diagnostic tool offers patients an initial oral health assessment without needing to step foot in the clinic. With the virtual appointment solution, Vitaldent is able to offer online consultations for urgent cases. The company has also invested in intraoral scanners that generate precise orthodontic models and detailed digital patient records versus conventional methods, helping to reduce the time consumers need to spend in clinics and facilitating more online consultations.

The range of applications we are currently seeing represents the tip of a very large iceberg. With an ageing population, looming shortages in medical provision and the long-term effects of Covid-19, plus the possibility of similar global health emergencies, robust and efficient solutions must be found to satisfy ever-increasing demands on healthcare services.

Telehealth will not replace the need for human contact between doctor and patient, but it is clear that growing numbers of patients like the convenience it offers. This has the potential to transform the experience of the patients and clinicians and also, over time, lead to the emergence of completely new healthcare business models. Many healthcare interactions are episodic in nature, with patients citing inconvenience and access as the key reasons, but the level of virtual interactions enabled by technological innovation could lead to scheduled, regular check-ups and the development of subscription-based business models. That would help prevent some of the unnecessary interactions with emergency rooms, friction in transitions between primary care and specialists and confusion in medication management and after-care.

Research suggests that around one in eight patients currently prefer a digitally mediated experience to an in-person consultation. As recent events have proved, telehealth can and will continue to fulfil a vital role – ultimately enhancing patient care.

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