Telehealth Headed Into 2020

Telehealth Headed Into 2020

January 6, 2022 Comments Off on Telehealth Headed Into 2020 Blog Post Snowfish

With names such as BetterHelp, a sub company of Teladoc Health, interrupting your favorite podcasts, the post-pandemic era represents a critical tipping point for the adoption of telehealth.

Prior to the recent pandemic, telemedicine radiological services was one of the few areas that had significant adoption.  The key issue was how to staff a small or remote hospital with a radiologist in the middle of the night.  Snowfish worked with a leading radiology provider that used technology and time zone differences to offer 24 hour services to emergency room personnel.  In certain cases the hospitals could not exist without these services.  The focus of these services was on clinician to clinician advice.  Today, the focus is on clinician to patient. 

According to an article in Nature Medicine, “Whereas in January 2020, less than 1% of primary care visits in Medicare occurred virtually, by April, nearly half did. In the fall of 2020, nearly two thirds of Medicare beneficiaries reported that their provider offered telehealth appointments, up from 18% from before the pandemic.”  

Telemedicine allows doctors to evaluate, diagnose, and treat patients in remote locations through the use of telecommunications technology. Today we are seeing direct interaction with patients which is different than in the past.  We have previously written about whether the 2020 pandemic represented the tipping point for telemedicine. In today’s blog, we want to provide an update to that post by examining the first-mover in the telehealth industry, Teladoc.

Teladoc Health

By far the largest provider of comprehensive virtual healthcare, Teladoc Health generated over $1.09 billion in revenue in 2020 and provides a good case to explore the telehealth industry. Teladoc, like many in the industry, benefited enormously from the 2020 pandemic in the form of increased revenue and a rising stock price.

Teladoc primarily operates a Business to Business (B2B) model where its primary sales channel is to self-funded employers and other payers. The company generates revenue through subscription fees and licensing its technology platform.

Morningstar’s Equity Analyst Report notes that “Traditional hurdles for the [health information services industry] had been regulatory friction, reimbursement parity, and provider resistance, all of which were temporarily lifted in early 2020. Regulatory friction has historically been a key barrier to the adoption of telehealth.

According to, “Traditionally, beginning in the 1800s and growing substantially in the 1950s, states have had the authority to license healthcare professionals. States have a vested interest in maintaining that authority because it allows them to exert control over the quality of care given to their citizens by setting standards including the passing of a licensing exam.”

However, as Morningstar notes, the COVID-19 pandemic created a “vacuum for healthcare services.” Consequently, states were forced to loosen restrictions on healthcare providers being able to practice across state lines.

Similarly, public and private plans started to provide reimbursement parity for telehealth visits. Reimbursement parity is when a health insurance plan reimburses a provider equally for a telehealth and in-person visit.

Additionally, the CARES Act added reimbursement codes for telehealth visits and private plans followed suit.

Although immensely profitable for the industry, these changes to the law are temporary and are at risk of reverting to the past once the government declares an end to the health emergency.

Teladoc’s stock price, $91.47 at previous market close (priced less than 50% of fair value), reflects investor uncertainty in the long-term prospects of telehealth. Likewise, Teladoc, despite strong revenue gains in the last five years, has not been profitable.

Beyond the pandemic, the future of telemedicine relies on legislation, specifically targeting reimbursement, parity, and ability to deliver care across state lines. 

Telehealth Legislation

Congress is considering several bills on this issue, including the CONNECT for Health Act and the Telehealth Modernization Act. According to Senator Schatz’s office, “The CONNECT for Health Act would expand the use of telehealth and remote patient monitoring services in Medicare.” As of this writing, the bill was read twice and referred to the Committee on Finance.

The Telehealth Modernization Act specifically targets geographic restrictions on telehealth. The summary of the bill posits that the “bill allows (1) rural health clinics and federally qualified health centers to serve as the distant site (i.e., the location of the health care practitioner); (2) the home of a beneficiary to serve as the originating site (i.e., the location of the beneficiary) for all services (rather than for only certain services).”

A patient’s location at the time of a telemedicine visit impacts Medicare’s coverage of the visit. Under current law, while there are no restrictions on the distant site, the originating site must be one of these types of healthcare facilities. However, the new proposed law would allow the home of the patient to serve as the originating site, allowing patients to receive covered care in their homes.


Having been in business for over two decades, Snowfish maps the market landscape of disease states for clients. Snowfish mapped the market landscape for a leading radiology provider. Please visit our website to learn more.

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