January 20, 2010
At a meeting in Cleveland last week, I was struck by how the discussion of e-health’s coming market effects mirrored discussions twenty years ago surrounding the potential effect of managed care. The soon-to-be ubiquitous availability of health services via web-enabled platforms is going to have a similar striking effect on utilization and rates.
Unlike managed care, I think the market tipping point for e-health will happen faster. This is due to two factorsrapidly dropping tech costs and ever-present budget pressures. Estimates of the costs of telehealth equipment begin at less than $5,000 for a basic system for a small group of professionals and can run up to $350,000 for the most advanced (and fabulous) “telepresence” systems. The costs of entry in the market are far less than just a decade agoat the same time all payers (public and private) are interested in innovations that reduce benefit costs.
The most recent market analysis projects annual billings for telehealth services will reach $3.6 billion in five years. And, the big players in the field see the potential. In my recent article, “The Many Avenues to Remote Service Delivery: Private Sector Making Big Investment in e-Health” , I provide a market snapshot of the emerging players in e-health.
And, the new innovations keep coming. Just last week, Cisco Systems announced its collaboration with the state of California, Molina Healthcare, and two community health centers to launch a new telemedicine initiative geared towards expanding primary and specialty care services to underserved Californians. The pilot project will use Cisco’s HealthPresence technology and $10 million in Cisco funds to provide product, services, and supports for more than 15 sites statewide. While the private sector is digging deeply into this market space (with capital to spare), provider organizations in behavioral health and social services considering telehealth need to anticipate challenges that come with the territory, like cost.
I see e-health as either an opportunity for most provider organizationsor a strangling economic threat. It just depends on your organization’s strategy. The opportunity is in expanding the market, by both venue and geography, for your organization’s core competencies. Look to our coverage of both the strategic and marketing planning issues created by e-health in the months ahead.
Monica E. Oss
Chief Executive Officer, OPEN MINDS