What is the Best Business Model for Digital Health in 2024?

In a rapidly advancing digital world, healthcare is undergoing transformative changes due to relaxed regulatory barriers. These advancements have accelerated innovation in technology-related products, services and partnerships — all of which will contribute towards decentralized and personalized care delivery models.

As these virtual care methods promise better access, quality and affordability of health resources for consumers; the industry is strategically preparing itself for what lies ahead.

Digital health companies are on the cutting edge of healthcare, and crafting a successful business model is key to their success. In this article, you’ll find an array of telehealth models that enable these businesses to bring innovative solutions into the marketplace — from understanding legal requirements to leveraging different structures for maximum efficiency.

Platform-Only Telehealth and Virtual Care Management Models

These innovative companies specialize in connecting consumers with specialized products. Leveraging technology, they enable customers to access providers for any prescriptions needed and provide a platform through which users can easily interact with these professionals. To fuel their growth, many have adopted this model as an interim step while building out their network of affiliate clinicians.

For early-stage digital health companies, building an affiliate clinician network can be both costly and time-consuming. Fortunately, new business models such as Outsourced Virtual Provider Networks offer a more affordable alternative to creating your own network of clinicians from scratch.

By leveraging existing networks, businesses enjoy greater assurance that they have the resources needed to meet customer demands while maintaining quality control over care delivered by their affiliates.

Platform-Provider Hybrid Models

Consumers have the advantages of a single virtual provider company, but behind the scenes is an affiliate network made up of multiple distinct virtual clinics managed by a Management Services Organization. This innovative model offers convenient access and cost savings for all involved.

Teladoc, a pioneering brand in the healthcare delivery services industry is utilized by Medical Service Organizations (MSOs) which provide the necessary operational and administrative backing to run individual clinics.

Depending on their business model these companies may offer direct-to-consumer or B2B solutions with various payment models such as subscription fees, cash pay etc. The challenging times during this Public Health Emergency have encouraged many of those firms to experiment more extensively with traditional reimbursement plans from health insurers and other large businesses.

As Platform + Provider companies grow, prescription fulfillment has become a fundamental part of their operating model. This is typically handled through virtual pharmacies connected to the platform via API technology for an effortless customer experience. However, some startups have done it in reverse and begun as virtual pharmacies before specializing in this combined space.

Outsourced Virtual Provider Network Models

With the time and resources needed to build a clinician network being out of reach for many companies, particularly those whose business models don’t revolve around provider services, an industry arose. It offers physician networks available to lease that are staffed by virtual care doctors and nurses who can meet the demands of their customers.

This gave these businesses another option — rather than “building” or hiring clinicians directly (which was expensive), they could now “buy” already-existing staff on demand instead.

Outsourced Virtual Care Management Models

As the healthcare industry moves towards value-based care, telemedicine companies are increasingly integrating remote monitoring and other virtual care management services into their offerings. This is leading to a growth in momentum surrounding such platforms and outsourced clinical staff for improved patient outcomes at lower costs.

Additionally, we anticipate that there will likely be acquisitions of virtual care management firms by telemedicine providers going forward as they create comprehensive solutions geared toward preventative medicine practices.

“Digital Front Door”

Consumers are leveraging an online platform to carefully select the care option best suited for their needs, and a variety of payors have taken advantage by utilizing expansive physician networks.

As both virtual care companies and in-person clinic network organizations take action, they continue to expand upon each other’s services — creating service packages that involve telemedicine visits followed up or referred out with brick & mortar appointments.

Mobile Telehealth Models

Mobile care models revolutionize the way telemedicine companies offer in-home services, bringing traditional clinic capabilities to the comfort of one’s own home. Now patients can enjoy the convenience of a virtual visit with access to all diagnostic tools their doctor might prescribe; if necessary, a phlebotomist or radiologist will be dispatched directly for further assessments.

Telemedicine Provider-Payment Models

A few virtual care companies have built large and robust provider networks (Platform+ Provider Model), integrated pharmacy and lab services, and are equipped to manage complex patient needs. We’re starting to see these companies transition from telemedicine providers to “Payvider”.

These companies (and their affiliated providers) contract with payors and large self-insured employers to manage the total care of a population of patients. Instead of earning fees for every service they provide, these companies achieve profitability if they produce quality outcomes and reduce the overall cost of care.

Payviders take on the care of patients and the financial risk of that care. This, the theory goes, aligns the incentives of the payor and provider, which results in better care at a lower cost.

Conclusion

Traditional healthcare institutions are transforming with the increasing trend of delivering acute care in-home, rather than patients visiting hospitals. Medicare’s Hospital at Home program is a significant example that highlights consumers’ demand for on-demand services and home care solutions.

Hospital systems must stay competitive in the current landscape of mobile, hybrid, and virtual care models. With some large employers opting to fly their employees out-of-state for better outcomes on procedures like joint replacement, regional hospitals need a plan that will ensure they remain an attractive option.

If you’d like to explore your own home care solution beyond traditional services offered by your local hospital system you can contact us at connect@viosapp.com for more information.