Telehealth will have a more significant positive impact on cost trends in 2021 and beyond as its usage becomes more engrained with consumers and expands to a broader set of medical specialties.
The rising use of telehealth during the coronavirus public health emergency could help alleviate financial stressors associated with the pandemic, according to a new analysis.
CFRA, the New York-based independent investment research firm, says that telehealth will have a more significant positive impact on cost trends in 2021 and beyond, particularly for managed care insurers, as its usage becomes more engrained with consumers and expands to a broader set of medical specialties.
"We think increased use of telehealth in 2021 will help mitigate the negative impact of rising Covid-19-related costs during the first half of the year," CFRA said in a "Thematic Research" report offering predictions for the healthcare sector in 2021.
CFRA pointed to research from Arizton Advisory & Intelligence projecting that the U.S. telehealth market will hit $25 billion by 2025, growing at an annual rate of 29%.
Managed care companies, including United Healthcare, Anthem, Humana, Cigna, Centene, and Molina Healthcare, began to further embrace telemedicine space during pandemic to reduce unnecessary patient and emergency department visits, CFRA said.
"Since the onset of the Covid-19 pandemic, the use of telehealth has been growing rapidly due to stay-at-home orders and social distancing recommendations," CFRA said. "We think this trend is creating a change in the ways patients access healthcare and will continue due to its convenience and the added benefit of obtaining healthcare services at a lower cost."
CFRA is also projecting that in 2021:
- Demand for Covid-19-related products and services will continue until at least 3Q 2021, creating additional opportunities for life sciences tools and services companies.
- Increased use of personal protective equipment will continue, as higher standards for hygiene and infection control become the new normal.
- Healthcare distributors will benefit from large-scale distribution efforts for Covid-19 vaccines and treatments in 2021.
- As the Covid-19 vaccine rolls out, unless there are major issues with distribution, confidence in major vaccine makers will increase, which should positively affect valuations.
“We think increased use of telehealth in 2021 will help mitigate the negative impact of rising Covid-19-related costs during the first half of the year.”
CFRA
John Commins is the news editor for HealthLeaders.
KEY TAKEAWAYS
Demand for Covid-19-related products and services will continue until at least 3Q 2021, creating additional opportunities for life sciences tools and services companies.
Increased use of personal protective equipment will continue, as higher standards for hygiene and infection control become the new normal.
Healthcare distributors will benefit from large-scale distribution efforts for Covid-19 vaccines and treatments in 2021.
As the Covid-19 vaccine rolls out, unless there are major issues with distribution, confidence in major vaccine makers will increase, which should positively affect valuations.