Telemedicine Is Exploding, but Where Is the ROI for Health Systems?

As health systems raced to expand access, retain patients and deliver critical services virtually in response to the COVID-19 crisis, the growth of telemedicine was well documented. The combined effects of relaxed regulation, increased demand and ubiquitous accessibility of cloud-based technologies catalyzed what could be characterized as “digital health’s crowning moment.”

The pandemic created the need for remote healthcare, enabling nascent telemedicine initiatives and companies to take advantage of the untapped receptivity among many patients and physicians to engaging in virtual encounters. In March and April of this year alone, 22 telehealth companies raised venture capital.a

Nonetheless, sweeping questions remain around the economic viability of the telehealth model for health systems. As leaders of cash-constrained health systems prepare for the post-COVID-19 future, with its vision of virtual care woven into the fabric of the U.S. delivery system, they can achieve that vision only by pursuing a financially sustainable business model. To help inform such efforts, we spoke with executives of health systems that are among the nation’s leaders in delivery of telehealth services. These leaders shared with us the economic models their organizations are using to chart a course to a successful ongoing virtual enterprise.