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Big Future for Telemedicine?

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According to a report just released by McKinsey & Company, we are on the verge of seeing a major shift to health care from home. The report says that as much as $265 billion in annual fees to Medicare and Medicare Advantage could shift to homes by 2025.

We’ve already seen the start of the trend towards telemedicine. The spending on telemedicine was 38 times higher in 2021 compared to 2020. Most of that shift is obviously due to the pandemic. The report suggests that 2025 in-home medical care will increase to three to four times the 2021 level.

The report cites several changes in the healthcare industry that are contributing to the trend for more in-home healthcare:

  • 40% of patients who have used telemedicine say they expect to keep using it in the future. It’s a big burden on working families to try to get to the doctor’s office during the workday, and telemedicine makes it easier for many families to seek health care.
  • There are new technologies that make it easier to deal with remote patients. As an example, 20% of all medical practices in April 2021 were using devices that allow for electronic patient monitoring.
  • There has been a huge investment made in the digital healthcare market. Venture capital to support new digital healthcare companies was $29.1 billion in 2021, up from $14.9 billion in 2020 and $8.2 billion in 2019.
  • There is a rapidly growing industry that brings health care to the home. I probably don’t pay as much attention to this industry as I should, but this is the first time I heard the term Care at Home providers. These are health care professionals that visit patients at home.

The report points out that there are still a lot of changes to be made for the industry to fully adopt the care at home health care model. For example, insurance companies must recognize and reimburse in-home care at the same payment level as doctors and hospital care.

The report suggests that the biggest change will come from the general public, who will insist on in-home care if that is an option. Very few people want to trudge to a health care facility for repetitive treatments like dialysis, infusions, or simple consultations.

The report predicts that more physician groups will adopt care at home after seeing case studies of the effectiveness of treating patients at home.

Even as long as twenty years ago, I remember seeing predictions that telemedicine would be one of the first ubiquitous outcomes of the spread of broadband. I can remember hearing a lot of predictions of how broadband-enabled technology would enable seniors to live unassisted until later in life. It’s been obvious for that whole time long that this is something that many people want, but it has never materialized in any major way. Physicians and insurance companies have been reluctant to try telemedicine until the pandemic forced the issue.

We’ve come a long way with broadband in twenty years. The latest estimates are that over 87% of homes have a wired broadband connection, and 95% of adults have cell phones. Maybe telemedicine has finally arrived—we aren’t going to have to wait long to test the McKinsey prediction.

By Doug Dawson, President at CCG Consulting

Dawson has worked in the telecom industry since 1978 and has both a consulting and operational background. He and CCG specialize in helping clients launch new broadband markets, develop new products, and finance new ventures.

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