Although telemedicine was gaining ground before the 2020 lockdowns, the global pandemic set virtual physician visits off and running, according to speakers on the ACG Winter Summit panel “Emerging Opportunities in Virtual Care,” sponsored by Sapling Financial Consultants. The panel was moderated by Nevin Raj, COO of Grata, a vertical B2B search engine for identifying middle-market companies and a partner of ACG. The panelists discussed what deal-makers should know as they plan their virtual care strategies for the coming year.
Grata research found that telehealth and virtual care is growing. More than 100 U.S hospitals have pivoted to focus on delivering virtual care services. Right now, there are 54 telemedicine networks that connect health care providers to patients and 94% are independently and founder owned.
Yet telehealth businesses are not all created equal, according to Raj. And with many players in the telemedicine space, this sector is ripe for consolidation in the coming years.
Although telehealth is convenient and there is “some pent-up demand from people in rural areas,” looser regulations and lower costs could spur mergers, said Rob Hong, co-founder and CEO of Sapling Financial Consultants.
That said, telemedicine is still maturing and expanding beyond general medicine and into medical specialties and after care. “The question that the middle-market PE groups need to ask themselves is how can we apply virtual care?” said Bret Larsen, Virtual Care Strategist, CEO and co-founder of eVisit.
COVID-19 has prompted every medical specialty to find ways to add value outside of the hospital and clinic, such as communicating with patients via video, email or text, said Larsen. “Every medical specialty is realizing this now and finding ways to make their economic model work and to add value for patients,” he said.
“In some other disciplines, like endocrinology, you can do some of the monitoring remotely using different types of products. Even just moving to e-health records [could help because] a lot of doctors’ practices still have physical records,” Hong added.
Health care is challenging and investors must temper their expectations, said Blake McKinney, co-founder and chief medical officer of CirrusMD.
“If you’re not familiar with health care and the frustrations of the landscape, you’ve got to buckle your chin strap,” he warned. He pointed to the recent demise of Haven, the partnership formed by Amazon, JPMorgan Chase and Berkshire Hathaway three years ago to address the American health care crisis.
“I hope it showed everybody that it’s hard to eat an elephant. You can do it but it’s slow, chewy, frustrating and hard to digest,” McKinney said.
Phil Albinus is Middle Market Growth’s managing editor.