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The global telemedicine market is set to climb 19% annually from $38 billion in 2018 to over $130 billion by 2025, creating a massive opportunity for providers to tap into a new revenue stream, broaden their addressable market, and fill staffing shortages.
This growth will be fueled in large part by the US, which will account for nearly half ($64 billion) of the global telemedicine market in 2025.
Here’s what it means:US healthcare providers can tap into several telemedicine use cases poised for rapid growth.
- Telemedicine in neurology is expected to grow at the fastest clip. Global neurotelemedicine is projected to grow 40% annually; and it makes sense for much of this growth to manifest in the US, where a shortage of neurologists will coincide with an increase in neurodegenerative disorders as the population ages, per an April 2018 study published in The Lancet.
- And the home telemedicine market is set to take off. We expect that the US will account for a large chunk of the 20% annual growth rate projected for the global “telehome” market. The US home healthcare market is swelling, driven by the need to manage the healthcare costs and readmission rates of a ballooning senior population. And providers are already reaping the rewards of using telehealth to tap into this opportunity: Pennsylvania-based health system Geisinger, for example, used telehealth to reduce its monthly costs by an average of $500 per patient in a subset of its most expensive and acutely ill patients.
The bigger picture: Several roadblocks still stand in the way before the projected telemedicine boom can be realized in the US.
- Restrictive and ambiguous telemedicine laws are currently impeding widespread adoption. Laws pertaining to telemedicine providers differ among states, and the regulatory framework for providers is often murky. For example, some state laws require doctors and patients to be in qualifying locations during telemedicine care in order for providers to receive reimbursement. But recent plans laid out by Congress should address existing frictions around telemedicine reimbursement, meaning regulation could fade as a market barrier in the near future.
- Providers need to ramp up infrastructure investments to support telemedicine integration. Only 16% of physicians worked at a practice that utilized telemedicine in 2016, so most providers are likely still ill-prepared to incorporate the tech. For US telemedicine to realize the projected market boom, more providers will have to start implementing IT to support telehealth services.
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