No, telehealth isn't dead—but it has some adjusting to do (2024)

Telehealth is sort of like the movies, Dr. Spencer Dorn tells me. Sometimes, it's better to hunker down at home and watch your show on Netflix. Sometimes, you "want to see the Barbie movie really badly in the theater with your friends."

Disclaimer: Your doctor delivering the results of your cholesterol panel in person is unlikely to evoke the same emotions as Margot Robbie delivering a monologue on the silver screen. But even as pandemic-era tech makes it easy to live and work from the comfort of your own dwelling, people are returning to physical clinics for many of the same reasons they buy a ticket for a sporting event or a film screening.

"It's a richer interaction," according to Dorn, a gastroenterologist and vice chair of the Department of Medicine at the University of North Carolina at Chapel Hill.

Or, at least, it feels that way to some patients, "whether that's true or not," he added.

Telehealth visits saw exponential growth during the early days of the COVID-19 pandemic, according to FAIR Health, the nation's largest repository of claims data. In January 2020, telehealth accounted for 0.24 percent of national medical claims; by March of the same year, telehealth visits had shot up 4,347 percent, accounting for 7.52 percent of claims. As of February 2024 (the most recent data reported by FAIR), overall telehealth utilization was hovering under 5 percent—a notable drop from its pandemic peak.

The conversation around virtual care has revved up in recent weeks following the high-profile closures of Optum's virtual care business (first reported by Endpoints News on April 24) and Walmart Health Virtual Care (announced in an April 30 company blog post, alongside the closure of all 51 Walmart Health centers). Throw in Teladoc Health's first-quarter financial report—which revealed an $82 million loss—and the storm thickens.

But despite the month of bad press, telehealth is not on its way out of the market. In fact, it was here long before COVID-19, according to Dr. Sree Chaguturu, executive vice president and chief medical officer of CVS Health and chair of the American Telemedicine Association's board of directors—and, like the virus, it just keeps mutating.

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Telehealth has been asynchronously connecting patients and providers for more than 100 years, Chaguturu told Newsweek. The practice began at sea, when physicians would use ship-to-shore radio for those who needed at-distance medical care.

Now, telehealth models are still being used to innovate care delivery and solve modern health care crises. Virtual nursing programs provide support to hospitals suffering from workforce shortages; remote patient monitoring systems help manage conditions beyond a traditional visit; eConsults allow clinicians to access their peers' knowledge and collaborate from afar.

But there are hangups to more traditional telemedicine models, Chaguturu said. Many companies that launched several decades ago focused on episodic care: you call, you talk to a provider, you get your diagnosis, you hang up. The connection—with patients, providers, health plans, pharmacies—just wasn't there. The result was a "fragmented and often frustrating experience," according to Chaguturu.

Dorn also brought up the classic telehealth integration issue. Some patients, especially those receiving behavioral health care, can connect with their provider virtually and seamlessly.

However, other conditions call for physical tests and examinations, and this is where virtually siloed companies can run into trouble. Their business models, sans brick-and-mortar, allow them to scale quickly with little overhead.

"But they're missing something," Dorn said. "We still have physical bodies, which still sometimes need to be touched or poked or prodded."

For some Americans, that physical care—however necessary—can be costly and hard to come by. When Walmart Health launched its first center in 2019, it aimed to tackle health care affordability and accessibility, "two of the greatest and most prevalent concerns in our country today," according to a company blog post by then-Health and Wellness President Sean Slovenski.

It wasn't an unfathomable goal, by the numbers. If you find yourself wandering a one-horse town, the horse is probably tied up at a Walmart: 90 percent of the U.S. population lives within 10 miles of a big blue store, according to research from Capital One Shopping. Meanwhile, 18 percent of Americans live more than 10 miles from their nearest hospital, Pew Research reported in 2018. The access issue is most glaring in rural areas, and wide-reaching companies with virtual care arms—like Walmart—could theoretically help close the gap.

Walmart declined Newsweek's request for comment and referred to its blog post, which stated that "the challenging reimbursem*nt environment and escalating operating costs create a lack of profitability that make the care business unsustainable for us at this time." The company continues to operate its vision centers and pharmacies, specialties well-positioned to stand alone.

Optum said in a statement: "As an enterprise, we are committed to providing patients with a robust network of providers for virtual urgent, primary and specialty care options. We continually review the capabilities and services we offer to meet the growing and evolving needs of our businesses and the people we serve. As always, we will support affected team members with job placement resources and seek to deploy them where possible to any open roles within the company."

Moving forward, successful telehealth models are likely to support an "omnichannel" approach, in Chaguturu's words, or a "multichannel approach," in Dorn's. Patients can see their provider in person, then follow up virtually; when they need more testing or support, they are woven into a network that can physically support them. Online platforms that do not have roots of their own can still provide that touchpoint through partnerships with local health systems and practices, Dorn said.

And despite the recent doomsday stories, some virtual care platforms are thriving on their own. Take Hims & Hers Health, a telehealth company that diagnoses and treats a wide range of conditions, including skin care, hair care, sexual wellness, mental health and primary care. The company offers prescription medications at between 50 and 80 percent off retail prices, but does not accept insurance (remember what Walmart Health said about the "challenging reimbursem*nt environment"?).

According to Hims & Hers' most recent earnings report, the 6-year-old company saw its first quarter of net income profitability in the final stretch of 2023, and expects to exceed $1 billion in revenue this year. Its user base has grown to 1.7 million, adding 172,000 net new subscribers in the first quarter of 2024 alone.

Newsweek asked the company's Chief Operating Officer Melissa Baird if she believes it is poised for longevity: "Yes," she replied, "we do."

"The growth we've seen on our platform is a testament to how people are looking to get the care they need," Baird said, pointing to its accessible, personalized care model.

I asked Baird and Dorn what is missing from the national conversation surrounding virtual care. They gave the same answer: nuance.

"Oftentimes, the discussion around telehealth is very black and white, and suggests that either the industry will go fully digital or stay fully brick and mortar," Baird said. "In actuality, the traditional health care system in the U.S. has always been slow to adapt to our changing society's needs. However, the health of our population is declining in a number of ways, and it is imperative that every stakeholder in the system, including providers, policymakers, hospitals, payers and even digital health companies, find ways to make high-quality care accessible."

Health care is not one-size-fits-all, Dorn added. Some of his busiest patients—the "poster child[ren]" for virtual check-ups—still insist on visiting his office in person.

"Things are nuanced," Dorn said. "It's not 'virtual care is the future,' and it's not 'in-person is the future.' It's some combination of the two."

"I would say that virtual care has not yet lived up to its expectations. But it doesn't mean the story is over," Dorn continued. "Ideally, over time, we embed it more as a channel that helps us take better care of people and helps people live healthier, happier lives."