In 2020, the use of telehealth exploded. The American Journal of Managed Care estimated between September 2019 and September 2020, telehealth visits increased by a staggering 2980%. This growth was driven by the uncontrolled spread of Coronavirus, the convenience of virtual care compared to traditional in-person visits, lower costs for patients, the temporary waiving of regulatory requirements that increased the supply of providers eligible to deliver virtual healthcare, and lowered technology requirements.
To support the expansion of telehealth, the U.S. Congress appropriated $200 million to the FCC under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, to fund telehealth programs and initiatives. The FCC stated it was particularly interested in funding programs that would expand telehealth to underserved areas, such as rural, low-income, and tribal communities. Congress appropriated a further $250 million to the FCC through the Consolidated Appropriation Act 2021 in the hope of further driving telehealth expansion. The FCC announced on April 29, 2021, that it was accepting applications for these funds.
Despite significant public investments, the issue with telehealth has never been a shortage of capital investment, but an overly burdensome state and federal regulations that deny patients access to a mode of care proven to improve health outcomes. If Congress and state governments want to expand access to telehealth, they should focus efforts on removing regulatory burdens denying patients’ access to care, rather than simply providing taxpayer-funded financial handouts to providers.
While healthcare providers will undoubtedly welcome public investment in telehealth, there was never really a shortage of investment that would necessitate state intervention. Rock Health’s Market Insights Report shows in 2020, venture capital firms invested a staggering $14 billion in digital health companies, dwarfing the FCC’s taxpayer-funded offerings. Projections suggest these investments will only increase in the future as telehealth becomes a more significant part of U.S. healthcare.
Private investment in telehealth has spawned new and innovative methods of delivering healthcare to patients. Within the last year, new technologies have come online and expanded telehealth’s capabilities including advanced remote patient monitoring technology, the ability to virtually triage patients, and digital biomarkers that can predict and catch “serious illnesses early while they’re more treatable.” The FCC’s minuscule offerings compared to private investments simply wouldn’t have allowed these technologies to become mainstream.
Before the temporary COVID-19 telehealth reforms, patients faced barriers that, at best, made accessing virtual care difficult and, at worst, made obtaining care impossible for certain people.
Prior to COVID-19, the federal government and states had rules preventing providers from practicing across state lines and required visits to take place via synchronous, interactive platforms. For patients, these regulations limited the number of providers they could seek care from, particularly for those seeking specialized care. These requirements also prevented the elderly, less tech-savvy patients as well as rural patients from accessing virtual care.
By allowing providers to temporarily practice across state lines and permitting visits to take place via audio-only platforms, states and the federal government greatly expanded access to virtual healthcare and allowed thousands more Americans to access care previously denied to them. In fact, these deregulatory moves were so successful that by the end of 2020, 20% of all medical visits in the United States occurred virtually.
The increase in telehealth usage following the relaxation of telehealth regulations shows when it comes to expanding access, the government should focus its attention on legislating in a way that expands access rather than simply throwing money at a problem already addressed by the private sector.
Removing barriers will not only improve patient access but will supercharge private investment in telehealth. In 2019, when telehealth providers faced a rigid regulatory environment, they only received approximately $1.8 billion in private funding. As the regulatory environment became friendlier and as the importance of telehealth to patient care had been proven, this investment increased to $14 billion. Recognizing how the temporary reforms to telehealth spurred investment, it should be clear to policymakers that low barriers to healthcare for patients will only incentivize private investment in telehealth at levels governments cannot match.
While healthcare providers will undoubtedly welcome additional funds to support their telehealth programs, the fact remains that private investments are better placed than public handouts to expand patient access to virtual healthcare. The government’s role in increasing access to telehealth lies not in its ability to provide taxpayer largesse, but in its ability to permanently create an open regulatory environment incentivizing investment that allows providers to practice across states lines and patients to access care.