Key considerations for global setup and expansion
In addition to selecting the right business model, there are a number of other influential factors that impact a provider’s ability to develop a strong market position.
Regulation
Regulation is key and can differ significantly from country to country. Successful global groups usually launch from countries where regulations favour treatment at a distance, often using their experience to adapt to local restrictions in other markets or adding a local partner.
For example, restrictions in Brazil mean that, to date, Teladoc only gives advice, and does not provide the full diagnosis, treatment and prescription services offered by its doctors in the U.S. Medgate used a local partner — Telstra, the incumbent telecoms company — to launch their ReadyCare JV in Australia.
The COVID-19 crisis is leading regulators across the globe to facilitate adoption of telehealth. In the U.S., the Medicare health insurance programme will temporarily reimburse video consultations at the same rate as face to face visits. The FDA and CDC have also taken steps to ease the adoption of telehealth by providers and patients. In France, the government has introduced measures to ease reimbursement rules for patients using video consultations and something similar was done in Australia, where public Medicare funding is now available and effectively makes the consultations free in many cases (they were previously funded from private out of pocket payments). In Germany, a provider limit on the share of video consultations vs. in person visits has been lifted, and in China policies were strengthened to encourage online consultations, drug delivery, and medical reimbursement for online services.
Payment/funding of services
Best-practice telehealth providers have successfully obtained services payment from payers, employers or providers due to a compelling business case of lower costs and added patient convenience. For instance, U.K. based Doctor Care Anywhere has partnered with a leading private insurer to share the benefits of enhanced clinician and technology-supported triage that optimises clinically appropriate specialist outpatient appointments and hospital admissions for the insurer’s members. However, these approaches are mostly local and must be evaluated again for every new country due to the differences in healthcare systems and stakeholders. Sometimes it even makes sense to start at a more local level if nationwide contracts are difficult.
Historically, countries where providers operate under capitated payment models, such as GPs in the U.K., or under value based care frameworks, such as the U.S., have proved easier for telehealth adoption. More widespread public funding arrangements across the globe are now a reality since the COVID-19 outbreak. It remains unclear whether public funding sources will continue to be available when the crisis finishes, but it is considered likely on the basis of greater evidence that treatment at a distance is safe and effective. It is worth pointing out that private sector funding has also increased significantly, especially in those areas where providers are driven to online work because of the COVID-19 infection risk and are willing to pay for these solutions themselves.
Market entry strategy
Telehealth players must understand local market dynamics to decide which channels are most viable for entry into a new market, and whether success requires partnership with traditional local providers, payers or technology vendors. These considerations influence the best approach for gaining access to patients.
In several countries, GPs and other healthcare providers were vocal in their criticisms of telehealth — in Brazil, this disapproval resulted in the Federal Medical Council backtracking on its promise to open regulations earlier in 2019. Best-practice providers therefore engage physician associations and other important stakeholders in new countries or when launching new services. It can also be helpful to engage the offline community. Physitrack has done this by providing as much value to physiotherapists as to patients, and the face-to-face channel effectively markets the digital channel.
Concerns about data protection and compliance with privacy laws can have a significant impact on reputation. Funding or technical issues may force telehealth providers to share certain data with third parties, and this can cause a backlash if exposed. These factors need careful consideration and navigation when setting up a new telehealth service or expanding into other countries.
What next?
In an environment of increasing demand for healthcare services and tightening public spending, telehealth offers new options for treatment, as well as tangible benefits to providers, payers and patients. These drivers and the experience gained during the COVID-19 crisis strongly support the case for continued growth in adoption of telehealth by patients and physicians.
The patient base is large and growing rapidly, with leading provider Teladoc’s membership now exceeding 56 million individuals in the U.S. alone. Changes in regulation and reimbursement, driven by the COVID-19 outbreak and all the benefits described above, will further support the expansion of telehealth services in many more developed and developing markets.
As with any burgeoning market, the global telehealth sector has its challenges. Some players are scaling up rapidly and those tempted to follow have an opportunity to address growing demand and unmet needs. To do so they will need to navigate country-specific circumstances, access necessary levels of funding, and design a business model that will win in this increasingly competitive environment.
