Digital health is currently one of the fastest-growing segments in the VC-funded universe. Between Q1-Q3, 2021’s total funding amounted to $21B, with an average deal size of $39M.
Corona has opened the door for us to rethink what parts of healthcare should be in-person and what parts should be digital. And let’s be honest: no one wants to sit in a waiting room for 45 minutes - reading a magazine from three years ago - to discuss their hypertension.
This is exactly what virtual care providers are challenging: in-person care that could be treated online. “This meeting could’ve been an email” but for healthcare.
What are virtual care providers?
Virtual care providers enable patients to connect with an extensive network of medical professionals via their smartphone or computer. Virtual care provides deliver quick, safe access to essential medical care.
Virtual care providers are not the same as telemedicine companies. Telemedicine is nothing more than digitizing the consultation or appointment. Telemedicine doesn’t take the whole care process into account.
And that is the big difference. Virtual care providers do take the whole care process into account. It covers the patient throughout their whole care journey. It’s a much broader term. Besides telemedicine it could include remote patient monitoring, using wearables, defining a personal treatment plan, at home lab-tests, shipping medication… Some virtual care providers also make it possible to have an in-person visit if necessary.
A good example to make this clear is Maven Clinic — a virtual care provider focused on women’s health. Maven Clinic combines a specialized telehealth network with individual care navigation to support all parents and all paths to parenthood, from fertility through pregnancy, parenting and pediatric. Besides video chat, they have a care advocate for every member, personalised content and virtual classes. Maven Clinic is digital-first, but they also do clinic referrals if needed (f.e for IVF, Egg freezing..).
Another example is SWORD Health — a virtual provider for musculoskeletal care. SWORD Health uses sensors, a tablet and a physical therapist the patients see via telemedicine. Patients can do 100+ exercises at home and their Digital Therapists uses data from the sensors to give them live feedback. The information from the sessions goes to a physical therapist who adjusts sessions from your data and coaches you 1:1 over text + interspersed face-to-face telemedicine visits.
Differences between virtual care providers
I recently conducted a list with all virtual care providers I could find and I can tell you: there are dozens. So I was wondering: what are the differences between those virtual care providers? Honestly, it is not always clear. Here are the differences I see:
Differentiate by a medical condition
In traditional healthcare, we always want to be as comprehensive as possible. We want to serve every type of client. Virtual care providers do it differently. They often start by focusing on specific medical conditions. As they grow larger, they also expand their offerings.
We also see virtual care providers who focus on specific communities. For example, you have FOLX Health and Plume Health which are virtual care providers dedicated to the LGBTQ+ community.
Differentiate by business models
a16z recently defined five new go-to-market motions in digital health. For virtual care providers specific, I noticed the following business models:
Virtual vs. Hybrid vs. Virtual-Enabled
This is probably the easiest segmentation — some providers are purely virtual, i.e., they only deliver telehealth services, then some providers adopted a hybrid model using virtual visits as their primary way of communicating with patients, but also maintain brick-and-mortar infrastructure to see the patients for in-person visits. In the virtual-enabled category fall businesses who are essentially not virtual but who are using virtual care as a tool to extend their services.
The way virtual care providers can really differentiate themselves from the competition is by having a care model that delivers better outcomes and reduces costs for their patients. For each medical condition, you can approach care differently. Do you want to only focus on virtual consultations and coaching? Fine. Do you want to focus on virtual consultations, coaching, monitoring and at-home delivery of medication? Also fine.
The competition for virtual care providers will drastically increase. And at the end of the day, virtual care providers will only survive if they truly generate value for patients or providers. However, achieving this is incredibly hard in healthcare. Providing evidence that you achieved it is even harder. That’s why virtual care providers should not invest all their Series A money in marketing and ad campaigns. They should prioritize scientific evidence instead. It will be crucial to validate if virtual care is more efficient than traditional healthcare while improving the outcomes.
If we look at mental health alone I identified +30 virtual care providers, but which is delivering the best outcomes? Is it Rey, which is using Virtual Reality to reduce Anxiety? Or is it Cerebral that is using video appointments in combination with medication? Or is it one of the other 28 startups I identified? I honestly don’t know. And that’s the billion-dollar question.
What’s next for virtual care providers?
If we want to make our healthcare system sustainable and efficient, we need new ways to deliver better care. We need ways to reduce costs and improve outcomes. We now not only have the opportunity to improve outcomes, but we also have the opportunity to rebuild our healthcare system. The next wave in healthcare will be a hybrid model where we combine in-person visits with virtual care.
The pandemic made it clear that we don’t need an in-person visit for everything. The challenge we now face is finding the right balance between traditional and virtual care. The patient perspective for this challenge is crucial. Patients should always get the final decision to decide between in-person or virtual care. There is no point in forcing patients to do something they are not comfortable with.
Virtual care providers have the potential to reduce costs, save time, reduce waiting times, increase access to care and improve outcomes. But it is up to them to demonstrate that value. Virtual care providers will only build trust with patients and payers when they have scientific evidence proving that their solution works.
We should not allow the best marketeer to win; we should make patients aware — in an understandable, patient-friendly way — which provider delivers the best outcomes. Patients should not be convinced with ads, a well-crafted emotional story or a TV commercial. Virtual care providers have the social obligation to demonstrate how they improve outcomes.
The good news is that some virtual care providers are already reducing costs and improving outcomes. And aha cliffhanger, this will be the subject of my next blog post :-)
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This is a personal blog. Any views or opinions expressed are my own and do not necessarily represent those of my employer (Awell Health).
Feel free to connect with me on Twitter or LinkedIn. If you have a comment or feedback you can also send a note to rik.renard@hotmail.com
