October 17, 2022
Over the past 5 years, the virtual health landscape has evolved considerably, especially with the rapid proliferation of solutions. Employers have looked to these solutions for an array of services (including telehealth for primary and acute care, teletherapy, chronic condition management, navigation services and many others) to help support employees in their health and well-being journey. In fact, 80% of large employers believe that virtual care will significantly impact how care is delivered in the future.1
Funding from venture capital and private equity groups has driven much of the activity in this sector. Virtual health startups received almost $67 billion in investment over the 5-year period between 2017 and 2021.2 This has contributed to the environment in which virtual health offerings multiplied at an exponential rate—according to CB Insights, over 11,000 digital health solutions exist.3
Adding to this complex dynamic, overall population health continues to decline, despite the deluge of new platforms to manage health and facilitate the delivery of health care. This translates into higher costs for both employees and their employers. With employers insuring nearly 57% of the U.S. population,4 one must answer the question: What is the role of digital and virtual health in an evolving delivery landscape and are they delivering the outcomes promised?
The hope was that virtual health would remove some of the friction, inefficiency and patient frustration with the health care system, but at this point, it is unclear whether it can accomplish these goals. The biggest concern is that virtual health will simply increase utilization with little-to-no improvement in patients’ experience or health outcomes.
For employers, the current state of play is frustrating. They need practical, realistic solutions that can have a meaningful impact on the health of their workforces while also addressing affordability. In this report, we set out to gain a multidimensional view of the virtual health landscape with a focus on the needs of employers. To do so, Business Group on Health and Sage Growth Partners, with contributions from Yellow Brick Strategic Advisors, conducted in-depth, qualitative interviews with four distinct constituents: employers, benefit consultants, vendors and investors.
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- 1 | Business Group on Health. 2023 Large Employers’ Health Care Strategy and Plan Design Survey. Available at: https://www.business¬grouphealth.org/resources/2023-large-employers-health-care-strategy-survey-intro. August 23, 2022.
- 2 | Calculations based on: Rock Health. 2021 year-end digital health funding: Seismic shifts beneath the surface. Available at: https://rock¬health.com/insights/2021-year-end-digital-health-funding-seismic-shifts-beneath-the-surface/. January 10, 2022.
- 3 |CB Insights. The Digital Health 150: The Top Digital Health Companies of 2021. Available at: https://www.cbinsights.com/research/report/digital-health-startups-redefining-healthcare/. December 8, 2021.
- 4 | U.S. Department of Labor, Bureau of Labor Statistics. Employee Benefits in the United States – March 2022. Available at: https://www.bls.gov/news.release/pdf/ebs2.pdf. September 22, 2022.