Given the increasing focus by health providers on digital-first care, it may seem like everyone is seeing their doctor virtually in 2022 amid a global pandemic. But new research suggests that it remains the exception, not the rule.
Nearly two years into the pandemic, only about 1 in 4 Americans, or just less than 26%, have used telehealth, according to Trilliant Health’s 2022 Telehealth Trends Report released last week. That’s even using a broad definition of telehealth, which includes audio-only visits. The report analyzes the ways Americans have utilized telehealth from March 1, 2020 through November 30, 2021, based on payer and consumer data.
In comparison with telehealth use, nearly 80% of patients received only in-person care in 2021, up from about 70% who only received in-person care in 2020.
Lagging demand and declining adoption of telehealth by doctors and patients runs counter to an increase in supply — as options for virtual care are growing.
The report finds that given a choice, the vast majority of people still prefer in-person care. It puts the total addressable market for telehealth at less than 1% of the health economy.
“Considering Covid’s ‘forced adoption’ of telehealth, when we take away the segment of patients that had no choice but to use the technology (primarily for Covid-19 testing reasons), the most conservative estimates of the future telehealth market is less than 10 million consumers,” said Sanjula Jain, Trilliant Health’s chief research officer and senior vice president of market strategy, in an email provided by a representative.
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The report is a sharp departure from many others that underscore the promise of virtual care. Why?
Jain argues in the report that most conclusions from other reports “are grounded in small sample surveys, analyses of a limited population segment (e.g., Medicare beneficiaries, single health plan) and conflated calculation methodologies that do not account for the mid-pandemic changes in telehealth definitions and reimbursement criteria.”
The report built on Trilliant’s initial analysis of telehealth utilization featured in its 2021 Trends Shaping the Health Economy Report, and accounted for the ongoing changes attributed to the COVID-19 pandemic. It added an additional eight months of pandemic-era claims data from March 2021 to November 2021, rather than snapshotting trends from the initial months of the pandemic.
In 2020 and 2021. The report’s 20-month view includes data on 56 million telehealth patients sourced from Trilliant’s all-payer claims database.
The report’s findings ought to raise questions for most providers who are either offering telehealth solutions or racing to do so about what can be done to make it more attractive to patients and increase demand.
Understanding the telehealth customer base
There’s a misassumption that most everyone is interested in telehealth, according to Jain, and market analysis finds the industry hype misses the mark.
“Companies need to first consider which types of consumers are the target ‘customer’ for telehealth. This may seem obvious, but much of the industry conversations thus far have been grounded in the assumption that most of the population likes telehealth and/or wants to use it,” Jain explained. “Just like any other good that consumers purchase, there is a defined market and profile of the target ‘buyer.'”
With telehealth, there’s one group for whom use increased and has stayed up since the start of the pandemic: women ages 21 to 40. Drilling down even further, the most consistent “super utilizers” (25-plus visits) are women in this age group who are “digital natives” and primarily use virtual care for behavioral health, according to the report.
“Our data analysis reveals that not only do females constitute 60% of all telehealth patients, but they were consistently the highest utilizers,” Jain said. Additionally, the super users tended to be more affluent. Knowing the “target” population and most common applications — in this case mental health — can equip companies to better identify if and where there are people in the market that meet similar characteristics, she said.
Addressing lagging demand
While virtual care is still here as one option for care, the initial spike in telehealth use after Covid-19 locked down many aspects of society in 2020 has tapered. Nearly half of telehealth patients, or 46%, used it only once during the period studied, according to Trilliant’s report.
That hype around telehealth’s sharp rise is real and relative, according to Trilliant’s findings. The pandemic certainly accelerated adoption, but the number of telehealth users was small to start with. Excluding self-pay and traditional Medicare patients, about 38 million Americans accessed telehealth in 2020. That number fell to about 30 million in 2021 — about one-tenth of the current U.S. population of more than 330 million.
For providers trying to engage more patients virtually, Jain suggests shrugging off the notion that there’s universal demand for telehealth.
“Payment parity,” where insurance coverage for telehealth is now on par with reimbursement for in-person care, hasn’t proven enough to substantially change patients’ preference for in-person care, either, according to the report’s findings. To achieve sustained adoption of telehealth will require delivering telehealth services that are not only be reimbursed at the same level for providers but also preferred by the patient, Jain said.
The main example of where these converge is with behavioral health. Apart from more limited options for treatment, patients appear to like having some “distance” with their providers for these types of visits, she noted. “This reality compounded by the fact that we have a national behavioral health crisis presents an opportunity” for telehealth providers, she said. Namely, that involves catering to people who currently use telehealth for behavioral health and don’t access in-person mental health services.
Focusing on existing telehealth users
Certainly, even with the hype surrounding telehealth, providers have taken note of limits on demand. For those trying to enter the market or grow within it, that means considering their specific customer base and reach.
“For example, new retail entrants (e.g., Walmart, Amazon) have a greater scale advantage and an established membership (loyalty) base compared to other suppliers,” Jain said.
Established telehealth providers like Teladoc are more focused on increasing how much existing customers spend than growing the number of users, Jain pointed out. “Therefore, in the absence of meaningful growth at the consumer (or patient) level, employer benefit plans offer telehealth suppliers the most compelling growth opportunity,” she said.
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