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Where next for telehealth?

Two weeks ago we wrote about how the opportunities for large companies and investors to turn a profit in primary care are limited, and that this explains why there aren’t many large for-profit primary care groups. But there is one part of the primary care sector where this is not true at all: the telehealth sector.

Telehealth has been growing very rapidly in recent years, especially since the pandemic. In large part this is unsurprising, since it was starting from such a low base. Penetration rates are still low. The proportion of primary care consultations done via video call is currently still below 5% in most countries (the majority of telehealth is focused on primary care).

And despite the optimism and fanfare that often surrounds the sector, it is still unclear how high these figures can go. Whilst GPs can be resistant to change, many working in primary care will tell you that the majority of the things GPs see patients for cannot be done via video call.

This has led to an interesting development. Telehealth companies are now buying up physical clinics.  All the major telehealth players now either own their own physical clinics or partner in some way with physical healthcare infrastructure. 

This pattern has been particularly strong in Sweden, home to some of Europe’s largest players. Kry, Europe’s fifth largest player by revenue, has bought a chain of physical primary care clinics, a dermatology clinic, and a mental health clinic in Sweden. Doktor.se, Europe’s sixth largest player by revenue, now owns ten clinics there.

This digi-physical model hasn’t worked everywhere though. In the Netherlands, Quin found that running multiple GP clinics was a very different ball game to running a digital health startup, and ended up selling all its clinics to focus on its digital platform.

Telehealth players are also moving into other areas of care. Whilst telehealth companies typically start with primary care consultations, they will then often expand into offering consultations for more specialist areas too.

But the most promising path for expansion appears to be to move into providing a more comprehensive range of services, such as digital diagnostics, therapeutics and monitoring, through fully-integrated ‘digital health ecosystems’. Several companies are now doing this, most notably Zur Rose, HealthHero, Vitality, Mehilainen’s BeeHealthy, Axa/Microsoft, and the ICA Group.

Why choose just one path, when you can choose them all?

We would welcome your thoughts on this story. Email your views to Martin De Benito Gellner or call 0207 183 3779.