Businesses and health services in the digital technology space have been on hyper-growth mode thanks largely to the growing acceptance and adoption of telehealth in the country during the global COVID-19 pandemic. Oscar Health, a tech-enabled health insurance company, was the latest of such companies to have benefited from this trend. It recently went public with a valuation of more than $7 billion,[1] making it the largest public debut by a health technology startup so far in 2021.

Oscar was the first health insurance company to offer free, 24/7 telemedicine to all of its members and to integrate direct scheduling with health providers through their technology, the company said in a statement.[2] Over 30% of all Oscar members have used telemedicine, compared to a mere 10% of all Americans.[3]

In 2020, seven health tech companies went public.[4] And that number could just about double this year.[5] Three other digital health companies falling into a similar realm as Oscar—Clover Health Investments, 23andMe, and Owlet—have already gone public in 2021.[6]

Today’s fast-paced growth of these tech-enabled health care players is yet another sign that the once discreet telehealth market has seen a boost from the COVID-19 pandemic, and more businesses are looking to get in the game and expand their scale and offerings as health care continues digitizing.

What’s Happened to Change Things

Until recently, telehealth’s expansion was severely limited by a combination of regulatory and economic hurdles, as well as an overall hesitation by both physicians and patients to use it. Also, Medicare long had restricted telehealth use only to patients who lacked access to medical care otherwise; for example, those living in rural or underserved communities. The Health Insurance Portability and Accountability Act (HIPAA) also posed a significant obstacle. Due to the digital nature of telehealth, HIPAA rules called for all telehealth practices to contain: (i) a minimum threshold of data aggregation and (ii) coverage under a Business Associate Agreement (BAA), which detailed that patient data collected through the platform is limited to the patient or a HIPAA-covered entity, such as a health care provider or insurer.

However, the COVID-19 pandemic opened a window of opportunity for telehealth as many regulatory hurdles were either temporarily waived or, in some limited instances, permanently changed.

As a direct response to the COVID-19 crisis, the Centers for Medicare & Medicaid Services (CMS) announced a number of changes to the country’s health care system that included the expansion of telehealth across additional services.[7] The number of Medicare patients that were treated through telehealth swelled during the pandemic as a result, surging from about 13,000 beneficiaries to nearly 1.7 million towards the end of April 2020, according to the CMS.[8]

Furthermore, the Department of Health and Human Services Office for Civil Rights (OCR) announced that it would “not impose penalties for noncompliance with the regulatory requirements” as stated under the HIPAA Rules “against covered health care providers in connection with the good faith provision of telehealth” during the pandemic.[9]

What’s Next

In the short term, expanding telehealth was seen as a way to help hospitals and health systems stretch beyond their limited reach and make room for COVID-19 patients requiring more acute care, all while containing a quickly spreading virus. It is uncertain whether these expansions will remain in place, but one thing is for sure: these changes have allowed doctors, patients, and businesses alike to see how powerful the integration of this technology can be in expanding health care to traditionally hard-to-reach populations while at the same time limiting service costs.

Both Democrats and Republicans in Congress have set into motion a number of bills to ensure Medicare’s currently expanded coverage of telehealth remains intact. Senate Finance Committee Ranking Member Ron Wyden (D-OR), introduced the Telehealth Expansion Act of 2020 that would significantly expand the availability of telehealth services in Medicare by permanently eliminating key statutory barriers.[10] Similarly, Senators Tim Scott (R-SC), Brian Schatz (D-HI), and Jeanne Shaheen (D-NH), reintroduced the bipartisan Telehealth Modernization Act that would make permanent certain telehealth flexibilities under the Medicare program related to the COVID–19 public health emergency.

Meanwhile, states themselves have modified requirements for telehealth practices.[11] New Hampshire, for example, signed into law NH HV 1623 that has since made permanent the requirement that Medicaid and private payers reimburse providers for telehealth services “on the same basis as for in-person care.” It also expanded the list of eligible health care providers allowed to use telehealth as part of their service, including dentists, psychologists, and mental health practitioners.

Conclusion

Telehealth has the ability to address and reduce disparities that a number of groups across the country face in accessing health care services. The consequences of transportation barriers, for example, are vast, leading to rescheduled or missed appointments, missed medication use, and, ultimately, delayed care. The increased availability of telehealth has the potential to help ease these barriers to health care access.[12]

Although its utility is becoming increasingly clear, telehealth still faces challenges, including in variation of access to internet connectivity and to quality health care services. Despite 80% of all households in the United States having access to internet, differences remain in access by age, sex, race, ethnicity, income, and education.[13] Additionally, though the pandemic forced many patients and physicians to adopt telehealth, some convincing still remains.[14] What some see as a shift to added convenience, others don’t view as a complete replacement to in-person care just yet.