Healthcare Pulse: The Boom and Bust of Telehealth

The COVID-19 pandemic shifted the world to a new era of social distancing and virtual environments. The healthcare industry saw a drastic change in how primary care was delivered from providers to patients with the rise of telehealth. Big tech companies like Amazon and Walmart moved into telehealth with their own service platforms like Amazon Care and MeMD, respectively.

Let’s take a deeper dive into how the telemedicine market has evolved through the impact of the global pandemic. Which changes are here to stay? What challenges will big tech companies face moving into this market? I found detailed insights on these questions in three excellent expert call transcripts from the Stream by AlphaSense library: request a free trial here.

The COVID-19 Telehealth Boom… and Bust

According to the former Director of Population Health at American Well, telemedicine became greatly overvalued during the pandemic:

“Everybody made the assumption that everything was going to go online and overbid it as far as what the value of these companies were. AmWell was worth, like $18 or $19 billion market cap at one point, now it’s two. Part of what investors missed was the fact that in order to ramp up and meet that demand, all these companies had to go on a hiring frenzy of getting doctors onboarded. AmWell had to go out and hire 30 people just to process, do the credentialing, get them onboarded, huge expenses that weren’t expected…

Teladoc talks about having like 7,000 doctors. When I look at Amwell’s quarterly reports, they talk about having 100,000 doctors. I don’t understand how those two companies measure their provider relationships. Ultimately that huge ramp that they did after COVID-19 came back to bite them in the butt. They ended up having too many doctors when things started to slow down.

– Director, Population Health, American Well (Prior)

Hiring all of those doctors made some sense, as telehealth utilization shot up 40x during the pandemic, per this former advisor at HealthiNation:

“Telehealth as a whole became germane really because COVID made it become germane. I think up until COVID, even though telehealth had been around for a long time, I think it was not uncommon to have utilization rates below 1%. If you were selling into an employer, for instance, less than 1% of its employees would use your service during a given year. During the height of COVID, that was closerto 40%.”

– Former Advisor, HealthiNation

However, most people have now stopped using telehealth services, per this primary care physician at Nuvance Health:

“Now, I think that when we were at the height of COVID, we were seeing 100% of our patients on telehealth. Now they’re probably, I would say, 30% I think. Though it’s not 100% anymore, there’s a lot of things that we’re starting to do on telehealth that we weren’t able to do before. The big thing is access to homebound patients and patients that had transportation issues, quality life issues.”

– Primary Care Physician, Nuvance Health

In summary:

  • Telehealth utilization shot up during the pandemic, from <1% pre-COVID to a peak of 40%
  • Everyone used telehealth services during the pandemic, but only about a third of patients use telehealth now
  • Some providers appear to have overestimated the amount of telehealth demand in a post-pandemic world

Looking Ahead for a Takeover

Telehealth is moving to the forefront of urgent care

“I do think it conditioned people away from a knee-jerk response to use urgent care and the ER. I think that may be one of the lasting ramifications of being introduced to telehealth is that people’s first reaction isn’t, ‘I’m going to run out to the urgent care and plop down $900.’ It may be to contact the telehealth provider first.

Advisor, HealthiNation (Prior)

Amazon continues to expand their capabilities in telehealth

“It’s the whole provider management recruiting that’s not in their wheelhouse. That’s a new skill that they’re learning obviously, they’ve expanded. Amazon has gone from just doing Seattle and their own employees to offering it in 20 states now.”

Director, Population Health at American Well (Prior)

A potential AmWell acquirer would be interested in their providers, not their platform

Somebody is going to ultimately buy AmWell because of the providers that they control. That’s the most valuable thing in all of this and is why you’re going to see the Amazons, the Walmarts, the other one, the other giant companies that are getting into this space are going to ultimately not buy into the platform, but buying them for the providers, that’s everything.”

Director, Population Health at American Well (Prior)

Google’s hesitancy in the market is “troubling”

Google invested $100,000,000 in Amwell at the IPO price. I guess it’s a little troubling to me that they haven’t shown any interest in wanting to buy it. Which just makes me wonder if the technology is not good enough or if they just have no appetite for getting into that space.”

Director, Population Health at American Well (Prior)


We will keep our finger on the pulse of the telehealth trend here at Stream, stay tuned!

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Alyees Qureshi
Alyees Qureshi
Content Marketing Specialist - AlphaSense

Content marketer at Stream by AlphaSense and experienced copywriter in a range of industries including: healthcare, financial, technology and energy. Published author of “Masala Chai,” a poetry book capturing his experience as a South Asian minority in America.

Read all posts written by Alyees Qureshi