Could We See $250 Billion in Care Virtualized?

If you’re wondering how significant the long-term impact of the soaring use of telehealth services during the COVID-19 pandemic could be on health care, a new analysis from McKinsey & Co. pegs the number at $250 billion.

That’s a staggering figure for a variety of reasons, not the least of which is that pre-COVID 19 total revenues of telehealth players were estimated at $3 billion for this year. If the prediction were to come true, telehealth spending could comprise roughly 20% of Medicare, Medicaid and commercial spending across outpatient, office and home health based on 2018 data used in the analysis.

The report’s authors are quick to note that the numbers are preliminary and nonexhaustive, but the projection reflects the incredible growth and largely positive reaction of patients to using telehealth services during the pandemic.

Also, the adoption of telehealth surged from 11% to 46% of consumers during the pandemic. At the same time, providers have rapidly scaled offerings, with various sources reporting increases of 50 to 175 times at some organizations.

To achieve the kind of permanent shift to virtual care outlined in the report, the analysts advise payers to develop a road map to accelerate value-based contracts that incentivize telehealth, build new product designs with virtual health and better integrate virtual health into care delivery. Health systems, they note, will need to prioritize a comprehensive digital front door for consumers, build virtual care capabilities and incentives for physicians, and better measure outcomes.

For more on how hospitals and health systems can better leverage virtual care models to improve care delivery and efficiency, read this AHA Market Insights report.