Telehealth Sector Projected to Bring in up to $20 Billion in U.S. Revenue by 2027, Finds Bloomberg Intelligence

Big tech has additional opportunity to capture $25 billion in new revenue from related emerging technologies in health care sector as digital becomes the entry point to health care

New York, February 24, 2022 – The telehealth sector could reach $20 billion in U.S. revenue by 2027 boosted by adoption throughout the Covid-19 pandemic, according to new analysis by Bloomberg Intelligence (BI). The report Digital Reshaping the Health Care Ecosystem, projects that telemedicine will not falter as the pandemic subsides, but rather will become an increasingly established type of medical care for the health care industry over the next decade. Rising costs, value-based health care, more consumerization, and the pandemic are key catalysts that are creating demand for more digital solutions in the industry.

Additionally, BI’s scenario analysis suggests that increased spending on emerging technologies in health care could add at least $25 billion in additional revenues for technology companies over the next five years. The $4 trillion plus health care industry provides ample growth opportunities for any technology company, as it significantly lags other sectors such as financial services or retail, in embracing emerging technologies. Cloud, telemedicine, connected devices, and data analytics are some of the key focus areas for technology companies as they aim to modernize this industry.

The BI report also dives into the opportunity for continuous glucose monitors (CGMs) for diabetes patients projecting a potential market worth of more than $12 billion in the U.S., Canada, Germany, the U.K. and Japan. This represents a 71% increase from 2021 levels. India and China represent an additional $6-7 billion opportunity for CGMs further out.

According to BI, virtual health care visits could comprise 15% of all outpatient visits by 2027 in the U.S., as a result of pandemic-related behavior shifts and technology investments. At the height of the pandemic when overall visits were largely reduced virtual health care appointments accounted for up to 50% of total patient visits in parts of the U.S. Virtual care for longitudinal care as opposed to episodic ailments will increasingly become the norm.

This shift in telehealth adoption is driven largely by the necessity of virtual communication during the pandemic. Additionally, vaccination efforts caused a spike in medical app downloads from providers including Epic, Allscripts and eClinicalWorks. With 300 million unique cellphone users in the U.S. and 85% of estimated households with Internet access, increased accessibility to mobile devices will contribute to normalizing telehealth practices.

“Patients’ medical habits can be incredibly difficult to change,” said Duane Wright, Senior Research Analyst at Bloomberg Intelligence. “Necessitated by safety restrictions the Covid-19 pandemic has accelerated the adoption of telehealth by years, providing safe and convenient access to telehealth services. With more major health care providers embracing telehealth services, our analysis finds annual revenue growth for top telehealth providers at 30%.”

As health care costs escalate and Medicare’s financial future continues to appear unstable, providers will likely be pushed to adopt tools that enable monitoring and delivery of hospital-level care in lower cost settings, like the patients’ home. Hospital care for chronic conditions like asthma, congestive heart failure, and chronic obstructive pulmonary disease (COPD) will continue to shift towards digital care. In fact, evidence suggests hospitals can achieve equal or better outcomes and cost savings through shorter inpatient stays without sacrificing patient safety and privacy by using these digital monitoring and care delivery tools.

Digital health care services are not only an alternative to in-person care, but also have some wide-reaching benefits that serve to make it a more appealing option for patients, providers, and pharmaceutical researchers, the report shows. Health care digitization allows pharmaceutical companies to expand their existing treatment platforms, bringing new ways to test the safety and efficacy of new drugs. For researchers, telehealth platforms provide a decentralized clinical trial process, where new wearables and other connected devices collect passive data that reduce patient burden, reduce trial dropouts and improve the efficacy of reporting.

These services also reduce barriers like trail site location and transportation needs, that prevent underrepresented minorities from inclusion in medical trials. Telehealth is providing new and easier methods of care, better access to care, and ways to maximize research effectively, thereby making digital the first touchpoint in a patient’s health care journey increasingly the norm.

The full Digital Reshaping the Health Care Ecosystem report is available via the following link. Bloomberg Terminal subscribers can access the report via {BI<GO>}.

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Veronika Henze
Bloomberg Intelligence
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vhenze@bloomberg.net

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