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The global telemedicine market size was USD 41.63 billion in 2019. The global impact of COVID-19 has been unprecedented and staggering, with telemedicine witnessing a positive demand shock across all regions amid the pandemic. Based on our analysis, the global market will exhibit a stellar growth of 91.7% in 2020. The market is projected to grow from USD 79.79 billion in 2020 to USD 396.76 billion in 2027 at a CAGR of 25.8% in the 2020-2027 period. The sudden fall in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Telemedicine has showcased tremendous growth in recent years. It not only helps patients to connect with physicians remotely but can also aid in reducing the cost burden of healthcare. Owing to these advantages, physicians and hospitals are looking forward to adopting digital health technologies in their practice. This has also triggered the government to develop regulations and reimbursement policies revolving around telehealth.
Developments in the telemedicine industry have made healthcare affordable and accessible to all. The increasing number of e-visits, expansion in radiology, cardiology, behavioral health, and others has resulted in the development of new business and healthcare models surrounding telehealth. The market is gradually becoming highly competitive with the launch of various platforms and the entry of new players with huge funding. For example, in May 2019, CirrusMD Inc., a start-up company, raised USD 15 million to expand and strengthen its position in the global market.
COVID-19 Impact: Virtual Consultations is Becoming the New Normal
The sudden outbreak of the COVID-19 pandemic has brought the whole world to a standstill. As hospitals are getting filled with COVID-19 positive patients, the burden on healthcare staff is increasing. Furthermore, the postponement and cancellation of elective surgeries and appointments have decreased patient volume in hospitals and clinics. This poses an urgent need for physicians to adopt telehealth to connect to their patients.
With social distancing being the new normal, the demand for teleconsultations and digital health services is at its peak. Telehealth has emerged as a powerful weapon in the war against the COVID-19 pandemic. The majority of virtual visit service providers are showcasing a tremendous increase in the number of users and subscribers. For example, Teladoc Health Inc. reported a 60% increase in the number of virtual consultations and reached 2 million in just three months from January to March 2020 compared to the fourth quarter of 2019.
Apart from this, many government organizations are embracing telehealth through new policies and reimbursement guidelines. In March 2020, the Federal Communications Commission in the U.S. established programs to help healthcare institutions deploy telemedicine technology. Similarly, in March 2020, the Ministry of Health and Family Welfare (MoHFW) issued telemedicine practice guidelines in India. The strong government support is anticipated to narrow the barriers to the adoption of this type of medicine, thereby opening new growth opportunities for the market.
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Introduction of AI-based Clinics to Create Multiple Opportunities
Artificial intelligence-powered booths in local malls have emerged in the past few years. The system includes a smart medicine cabinet that could dispense more than 100 medications. In November 2018, Ping An Good Doctor announced the launch of a tiny unstaffed clinic that incorporates artificial intelligence. Patients who require immediate consultations can sit in the three-square meter booth and consult with a doctor, which functions through artificial intelligence.
The AI machine collects medical history and provides a diagnosis strategy, which will then be transferred to a clinical expert. These miniature clinics are called “One-Minute Clinics.” These clinics can then connect patients with a clinician on ‘Ping An Good Doctor’s’ in-house medical team. Such AI-based clinics can be set up anywhere from schools to shopping malls and pharmacies to highway service stations. Hence, such innovations in digital health hold tremendous opportunity for the market to exhibit a positive growth trajectory across the forecast period.
Significant Reduction in Healthcare Cost Burden to Boost Growth
The increasing prevalence of chronic diseases and out-of-pocket expenditure has led to a significant rise in healthcare cost. According to CMS, the U.S. health care spending increased by 4.6% in 2018, reaching USD 3.6 trillion or USD 11,172 per person. Furthermore, according to Eurostat, healthcare cost was a financial burden for 34% of the population in 2017, while 11% perceived such costs as a heavy financial burden on the household budget.
The adoption of digital technologies and teleconsultations can be a useful tool for addressing this issue. Teleconsultations offer cheaper services and also reduce the work burden on healthcare professionals. This is the primary reason for the increasing emphasis by government organizations on deploying digital health technologies, favoring the market’s growth rate.
Technological Advancements to Foster Growth of Market
With the advent of advanced technologies such as machine learning, artificial intelligence, the Internet of Things (IoT), virtual hospitals, and telehealth apps, the adoption of telemedicine is increasing rapidly. Apps developed based on machine learning algorithms can help in the diagnosis of diseases such as cancer, COVID-19, rare diseases, and others.
In March 2020, the UAE’s Ministry of Health started working with telecom operators to build its first virtual hospitals. Thus, the increasing investment in virtual hospitals is set to augment the telemedicine market growth.
Poor Infrastructure and Technological Barrier to Hinder Growth
Technological and infrastructure barriers in middle and low-income countries might hinder the adoption of the service. The deployment of digital health technologies requires the latest telecommunication devices, high-speed internet with high bandwidth, and storage capacity for the integration and transmission of medical data, which is still a challenge in many developing countries.
Moreover, the high cost of installation and the lack of skilled healthcare professionals are some of the other major factors restricting the growth of the market.
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Increasing Deployment of Teleconsultation by Hospitals to Favor the Services Segment
Based on type, the market is segmented into products and services. The services segment is expected to account for the maximum portion of the key market. Telemedicine substantially reduces the waiting time for consultations and referrals. This is one of the prominent reasons for the increasing number of hospitals providing or deploying e-consultation services, which, in turn, is favoring the services segment.
According to the Merritt Hawkins Survey, in the U.S., the average waiting time for a dermatological consultation has increased from 28.8 days in 2014 to 32.2 days in 2017. The shortage of dermatologists is surging the adoption of virtual visits and remote diagnostics services, thereby propelling the services segment.
The introduction of digitally advanced medical devices that can be connected wirelessly and integrated with mobile phones would also aid the product segment's growth. Besides, the rapid adoption of wearable patient monitoring devices is expected to drive growth.
Real-time Segment to Exhibit the Maximum Growth Stoked by Rising Number of E-visits
On the basis of modality, the market is segmented into real-time, store-and-forward (S&F), and others. The real-time segment is expected to witness lucrative growth owing to the drastic rise in the number of e-visits. According to the On-demand Virtual Care Benchmark Survey, 32.1% of doctors in the United States had an on-demand virtual care service in 2018. This is likely to propel the significant growth of the real-time segment.
The increasing application of telehealth in the diagnosis of diseases, especially in dermatology and radiology, is expected to favor the expansion of the store-and-forward segment. The rising internet penetration, even in rural areas, coupled with a significant increase in the number of smartphone users, is projected to augment the growth of the others segment.
High Demand for Mental Health Consultations in Lockdown to Spur the Telepsychiatry Segment
Based on application, the market is fragmented into teleradiology, telepathology, telecardiology, telepsychiatry, teledermatology, and others. The teleradiology segment is expected to dominate the market throughout the forecast period. Factors attributable to the expansion of the segment are advancements in the S&F technologies and the scarcity of radiologists in rural areas. According to the Canada Association of Radiologists (CAR), there will be a need for 1,700 new radiologists between 2019-2040. This, combined with the unequal distribution of radiologists, is expected to drive the teleradiology segment.
The increasing demand for telemedicine for behavioral health, especially during the COVID-19 pandemic, is the key factor for expanding the telepsychiatry segment. Moreover, as per the Excellus BlueCross BlueShield survey, 22% of the e-visits made by the Excellus BlueCross BlueShield members in 2018 in the U.S. were for behavioral health, which included conditions such as bipolar disorders, attention disorders, depression, and anxiety.
The rapid adoption of remote cardiac monitoring devices and m-health apps for tracking the heart and pulse rate is the prominent factor augmenting the growth of the telecardiology segment. The increasing number of dermatology visits and the rising demand for dermatoscopes are likely to propel the teledermatology segment growth. On the other hand, surging telemedicine applications in urology, neurology, chronic diseases, and others are also expected to propel the growth of the segment.
Healthcare Facilities Segment to Hold Maximum Portion of the Market
In terms of the end-user, the market is segmented into healthcare facilities and homecare. The increasing number of government-funded pilot programs for telemedicine, the use of telecommunications tools to train doctors in medical colleges, and the rising number of service providers for virtual consultations are the primary factors poised to surge the healthcare facilities segment during 2020-2027.
The homecare segment is projected to show substantial growth during the forecast period. Primary factors responsible for the growth of this segment are significant cost-saving in the healthcare services expenditure and the rising geriatric population. Furthermore, the adoption of telemonitoring to eliminate the need to visit hospitals is projected to fuel the segment’s growth.
North America Telemedicine Market Size, 2019 (USD Billion)
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The market size in North America stood at USD 17.90 billion in 2019. The presence of major players such as Teladoc, MDLive, and others, as well as the strong government support and increasing teleconsultations, are driving the market in this region. According to the Amwell Physician Survey, the willingness among doctors to use telehealth increased from 57% in 2015 to 69% in 2019 in the U.S. Furthermore, the telehealth adoption among physicians increased by 340% during 2015-2019. This is likely to boost the market in North America.
Europe is anticipated to be the second-most leading region in terms of share, which can be attributed to the improving government guidelines for the use of digital health and the rising prevalence of chronic diseases. According to the British Skin Foundation, at least 100,000 new skin cancer cases are diagnosed every year in the U.K. This poses a cost burden on the country. Thus, the U.K. government deployed Telederm, which provides over 50,000 skin cancer diagnosis to NHS and private patients annually, resulting in effective cost savings. This is anticipated to surge the market in the region.
As smartphones and cameras have opened new opportunities for the market, a plethora of start-up companies such as InstaDoc, FirstCheck, and others, are sprouting up in Asia Pacific, which is anticipated to foster the market in the region. The growing number of pilot projects and increasing uses of telemedicine to overcome the shortage of physicians are expected to augment the growth in Latin America and the Middle East & Africa.
Teladoc Health Inc. to Hold Leading Position in the Market by Collaborating with Others
In terms of the market revenue, Teladoc Health Inc. stood in the dominant position in 2019. A large customer base and users, an established network of GPs and specialists, and strategic collaborations are the major factors for the dominating position of the company. American Well, Ping An Good Doctor, and GlobalMed held significant shares of the market. Delivery of novel services for the treatment of various chronic diseases and a strong focus to expand their geographical presence is expected to favor the expansion of these companies.
However, the increasing investment and unique business models of start-up companies are anticipated to change the competitive landscape of the market in the upcoming years. These companies are receiving high funding from equity firms for expanding their businesses. For instance, in June 2019, Zava received funding of USD 32 million. The company is planning to use this funding to expand its telemedicine services in and across Europe.
An Infographic Representation of Telemedicine Market
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The market research report offers an elaborative analysis of numerous factors affecting the global market. Information on telemedicine market trends, drivers, opportunities, threats, and restraints of the market can further help stakeholders gain valuable insights into the market. The report offers a detailed competitive landscape by presenting information on key players, along with their strategies, in the market.
Value (USD Billion)
Type; Modality; Application; End User, and Region
By End User
The value of the global market was USD 41.63 in 2019.
Fortune Business Insights says that the market is projected to reach USD 396.76 billion by 2027.
The value of the market in North America was USD 17.90 billion in 2019.
The market is projected to rise at a CAGR of 25.8% during the forecast period (2020-2027).
The services segment is set to lead the global market.
A significant reduction in healthcare costs and technological advancements are the key factors driving the global market.
Teladoc Health Inc., American Well, and Ping An Good Doctor are the top players in the global market.
North America is expected to hold the highest market share.
The introduction of AI-powered apps for the diagnosis of COVID-19 and advancements in telecommunication technologies are expected to drive the adoption of this service.
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