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As of April 2021, 66% of US broadband households are familiar with telehealth services compared to 50% in May of 2020. The use of telehealth services has more than quadrupled, increasing from 15% in 2019 to 64% in 2021.

A confluence of factors is driving the expansion of healthcare into the home.
1. Reimbursement changes: Over the past two years, CMS has made substantial changes to support virtual care reimbursement, including expanded reimbursement of telephonic evaluation and management visits as well as behavioral health services. Physicians now receive reimbursement for remote patient monitoring services provided via a third-party vendor under a physician’s general supervision. CMS also instituted payment parity to pay practitioners at the same rate as similar in-person services.

2. Regulatory changes: CMS waived limitations on the types of clinical practitioners able to offer telehealth services to Medicare patients and suspended requirements around originating sites (i.e., the location from which a telehealth patient can receive care), so that Medicare beneficiaries can now receive telehealth services inside their own homes. It added 135 additional allowable services that could be delivered via telehealth, which more than doubled its service list.

3. New funding: The CARES Act of 2020 allocated $200M of funding for telehealth to support the expanded use of these tools. Funding in the private sector is also at an all-time high. Digital health incubator Rock Health reports that the first half of 2021 surpassed all of 2020’s funding, which was itself a blockbuster year for digital health funding.1 In addition, the bipartisan Choose Home Care Act of 2021 would allow for Medicare beneficiaries to recover at home following a hospitalization with extended at-home care, rather than a skilled nursing facility.

4. Staffing shortages: Despite vaccinations being widely available in the United States, vaccination rates have slowed. As a result of COVID-19 variants, a new surge of infections have occurred, further exacerbating staff shortages and hospital capacity issues. A desire to reduce infection spread continues to fuel the demand for virtual care.

5. Device innovation: Health devices — both medical-grade and consumer-oriented — are becoming more capable and accessible, expanding the possibility of virtual care models and empowering consumers with more insight into their own health status. While these technologies help advance applications and insights as a result of the ability to capture vital signs, it is still critical for devices to demonstrate alignment with accepted vital sign standards, like Polysomnography (PSG), the current gold standard for measuring sleep. In the future, it’s expected that more and more manufacturers will look to clinically test health devices against these set standards.

6. Consumer demand: Consumer familiarity with telehealth services is increasing across all demographics. While the average telehealth user is 44 years old and likely to have children in the home, telehealth use has increased substantially across all demographic groups.

  • 4% of households with an annual income of less than $30,000 used a telehealth service in the past 12 months, compared with 12% in Q2 2019.
  • 42% of those who self-identify as technology laggards (i.e., buying new technology only once traditional alternatives are no longer available) used a telehealth service, up from 6% in Q2 2019.
  • 42% of consumers ages 65 and older reported using a telehealth service in Q2 2021, up from just 6% in Q2 2019.

Additionally, consumers are now gravitating towards telehealth as a preferred method of receiving care in the future. These are strong indications that consumers want and likely will expect telehealth to be available to them going forward.

This is an excerpt from Parks Associates white paper, "Health at Home: New Era of Healthcare, written in partnership with EarlySense. This new whitepaper examines the state of the virtual care market, with particular emphasis on the factors driving the shift from facility-centric care to healthcare at home. The analysis delves into the technology solutions needed to facilitate longer-term remote care, particularly with respect to provider ability to continually assess patient deterioration or significant changes in overall health. Read the full paper.

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