Despite being around for several decades, the telemedicine industry has recently gained momentum in response to the coronavirus outbreak. Global Market Insights, a research firm, assessed the value of the telemedicine market at $45 billion in 2019 and estimates this number will increase 19.3% year over year to reach over $175 billion in 2026. While social distancing requirements will likely ease in the coming months, the increased role of telemedicine in our society will be permanent.
Prior to the pandemic, one of the major barriers standing in the way of efficient telemedicine was government regulation. For example, prescriptions of certain controlled substances would be distributed only after a prior in-person medical evaluation. However, as of March 16, these restrictions were removed. Schedule II-V controlled substances and other previously restricted medical equipment may temporarily be distributed without a face to face appointment.
Another barrier was financial consideration. Before March, physicians were paid less for virtual meetings. Under these conditions, there was no incentive for doctors to replace face to face appointments with online consultations. Furthermore, insurance companies and Medicare rarely covered the costs for these appointments. However, after the CARES Act was passed, Medicare recipients are actually being encouraged to utilize telemedicine in lieu of face to face appointments and many health insurance companies are reducing coronavirus-related telemedicine consultation copays.
The final barrier was more practical: the technology required to build an efficient telemedicine infrastructure did not exist until recently. With the development of high-quality live streaming, cheap data storage, and cloud computing, the stage has been set for telemedicine to thrive. For example, StethoMe, a smart stethoscope, collects heartbeat and respiratory readings which are then analyzed by artificial intelligence. If any abnormalities are detected, the data is sent to a physician for a diagnosis. While this may seem like an innovative product, the truth is there are already dozens of smart stethoscopes and similar devices on the market. With an industry CAGR projection of nearly 20%, the number of telemedicine products will grow exponentially. As competition increases, it will be essential for firms to both protect and realize the full value of their software, patents, trade secrets, and other intellectual property.