In the three years to 2017, demand for Telehealth Services has been surging as more healthcare providers and businesses have begun to use online consultations. “Propelling price growth has hampered buyer power over the three year period. In 2017 alone, prices are expected to grow 3.5%, as more employers offer telehealth services to their employees in order to help curb skyrocketing healthcare costs related to employee sickness and absenteeism,” says IBISWorld Procurement Research Analyst, Anna Son. Price growth is forecast to persist over the next three years through 2020 due to rising demand driven by expanding telehealth service coverage and advances in communication technologies.
Fortunately, market competition helps sustain buyer power by keeping price growth in check. Although there are a few prominent players, like Teladoc and Doctor On Demand, the telehealth market is highly fragmented and competitive. “IBISWorld estimates that there are about 640 firms currently operating in the US telehealth market. Moreover, most operators are small and midsize firms that are privately owned and operated. In the next three years, market share concentration is projected to remain low as new players enter the market, warranting strong price competition,” says Son.
While the telehealth market has experienced a number of regulatory changes during the past three years, there are more pending legislations that are expected to facilitate the adoption of telehealth services in the foreseeable future. Due to healthcare reform, an influx of newly insured individuals will spur demand for healthcare services, it is also expected to amplify looming shortages of physicians and nurses across the nation. As a result of surging demand for medical assistance, the use of remote patient consultations is projected to pick up in the coming years.
Currently, 30 states plus the District of Columbia require private health insurance carriers to provide the same coverage for telehealth services as they do for in-person visits. However, more states are expected to reimburse telehealth services the same as they do for in-person services over the next three years. According to Son, “A rising number of health insurance companies are planning on expanding their coverage for telehealth services. These regulatory changes will help accelerate the integration of telehealth services in healthcare settings, thus leading to anticipated double-digit sales growth and rising service rates in the coming years.”