Health IT

6 niche markets for telemedicine

Pennsylvania’s move this week to expand its telemedicine program to include more specialties reflects a broader trend of states using this tactic to improve healthcare access in underserved communities.

Some specialized markets have emerged. For entrepreneurs and investors eyeing the telemedicine space, here are six niche spaces to watch.

Radiology. Teleradiology is the largest and most established of the niche markets and it’s also the oldest. It started as an after-hours service, spurred by Nighthawk’s move to locate U.S. radiologists in Europe to cater to practices that need images read during nonwork hours. Virtual Radiologic or vRad dominates the market since it acquired Nighthawk in 2010 with a lot of small and midsized players across the U.S. Most community hospitals simply don’t have the resources to have a radiologist on duty after hours. Pittsburgh-based Foundation Radiology Group, a startup that raised $1 million last month, is beginning to offer centralized batch reading of screening mammography.

Dermatology. Teledermatology is an established, but growing area because it uses the same “store and forward” system as teleradiology. Images are transmitted to dermatologists, who may be in another state. They send their diagnosis to the referring physician or the patient. But dermatologists can also interact with patients in video exchanges. Iagnosis’ Dermatologists on Call and are a couple of examples of companies in the space. It helps address the access issue faced by people living in rural and urban areas.


Behavioral Health.  Telemedicine lends itself to psychology in some ways because it focuses on a conversation between a therapist or physician and a patient. Patients don’t have to physically go to the psychologists office for an evaluation and it addresses the provider shortage.  The Veterans Administration, in particular, is leveraging the technology to help cope with soldiers returning home from Iraq and Afghanistan, according to a spokesman from the American Telemedicine Association. Among some of the startup companies in the space are 1DocWay and iCouch.

Correctional Healthcare. Privately managed prisons looking to cut costs are looking to telemedicine. The cost of transporting prisons can be high and few, if any, prisons maintain a specialty staff. Wexford Health Sources in Pittsburgh is one company that’s been active in the space since 1998.

Ocular Health. Screenings for diabetic retinopathy is one area where ophthalmology practices are utilizing telemedicine, including Wills Eye Hospital in Philadelphia. It works with patients to facilitate access to eye screenings at locations close to their homes such as pharmacies or family physicians’ offices.

Pediatric sub-specialties. A department-like pediatric cardiology and other sub-specialties are not common to many hospitals. For underserved patient populations, telemedicine can allow for a consult in which a nurse or referring physician can follow the instructions of a physician on video hookup who can interpret the information provided.

The effectiveness of telemedicine is still being measured. Of the niche markets mentioned, its use for psychology probably comes in for the most criticism by those who point out that it can be ineffective at best and at the worst, risk patient safety. In 2010, Pike & Fischer estimated the telemedicine market would grow to $3.6 billion by 2014.

Telemedicine provider Rapid Remedy managing partner David Schlager said that while he believes telemedicine is currently a niche market, once attitudes change, primary care will be a huge area for growth.