Can telehealth disrupt traditional models of healthcare? It depends.

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Aug 12, 2021

With COVID opening the door to the recent rise in telehealth, we’ve spent some time talking about its pros and cons, what is needed to help sustain its growth, and our own predictions for its longevity

It goes without saying that this boom in telehealth will create a lasting impact on how healthcare operates. But even pre-COVID, we’ve posited that telehealth has the potential to be a disruptive force in healthcare. 

The Theory of Disruptive Innovation, defined by the late Professor Clayton Christensen, explains the process by which simple, convenient, and affordable solutions become the norm in industries historically characterized by expensive and complicated ones. And as healthcare is definitely an expensive and complicated industry, there is a lot of room to potentially disrupt much of how healthcare operates. 

It’s important to note that disruption is not just about the innovative solution, no matter how exciting the technology may be. It’s about using the solution to solve a problem for consumers that makers of incumbent solutions are ignoring—usually in a cheaper, simpler, and more accessible way. In other words, the way the solution is deployed often determines whether it will completely transform an industry by upending existing solutions, or merely offer moderate improvements.

So under what conditions might telehealth transform healthcare? Let’s look at the basics. Telehealth enables virtual consultations between healthcare professionals and consumers. But when used simply to enable physicians in traditional healthcare models to consult with more patients in a day than they could physically see at their offices, the technology merely improves the status quo. It won’t help to disrupt traditional models of care. 

Unfortunately, it’s largely been used throughout the pandemic in this way. Throughout COVID, providers have primarily offered telehealth as a way to circumvent closed or overcrowded clinics at the height of the pandemic. Because it’s been used to appeal to their existing patient pool—and at their typical, in-person prices—telehealth hasn’t contributed to creating a simpler, more affordable healthcare model.

However, ff harnessed to create a simpler healthcare option that also addresses the overarching problems of accessibility and affordability that are a hallmark of the current healthcare system, the technology could be disruptive. For a look at how this could be done, consider CVS’ Minute Clinics. 

CVS recognized that even for easily-diagnosable and treatable health conditions, accessing healthcare was a costly and burdensome process, barring people from quick and effective treatment. To solve this problem it created Minute Clinic, focusing exclusively on a set list of conditions whose treatments are predictable. Patients could walk in and out of the clinic within 15 minutes without need of an appointment, and while costs varied by condition, they were all set pricing and lower than the average physician’s office. The pharmaceutical giant now offers virtual visits for their Minute Clinic, giving consumers 24/7 access to a provider at a cost of $59 per consultation. By pairing telehealth technology with their innovative Minute Clinic model, CVS is utilizing the technology to expand healthcare access to those who previously struggled to seek out even the most basic medical care. 

There are other examples of telehealth similarly being used to gradually chip away at complex and expensive healthcare models. FirstDerm, a virtual dermatology service, leverages phone technology to provide care that is more convenient and affordable than in-person dermatology. The service—which is accessible 24/7—offers quick, virtual appointments starting at $30, compared to $150 for an in-person visit. 

If healthcare providers use telehealth to simply replicate traditional healthcare online, then the tech will do nothing to address the gaps in patient needs. It’s solving consumers’ unmet needs that will ultimately disrupt the industry, not beating competitors in a technological arms race.

Jessica is a research associate at the Clayton Christensen Institute for Disruptive Innovation, where she focuses on business model innovation in healthcare, including new approaches to population health management and person-centered care delivery.