Telehealth use surged last year to new levels, leading to record investment in companies offering virtual services. But the momentum may be slowing, as a new report shows that demand for telehealth services started to decline at the beginning of the year, falling by more than a quarter in a handful of states.
After surging to new heights in April and May of last year, demand for telehealth services began to decline in early 2021, according to a report by Nashville-based analytics firm Trilliant Health. The results were based on claims data representing 309 million patients across all 50 states, including commercial and Medicare claims.
“A lot of people are going in-person. They still prefer that,” said Sanjula Jain, Trilliant’s chief research officer and the author of the report. “There’s a certain demographic that loves telehealth. But those trends are starting to taper off.”
In general, just a portion of people in the U.S. generated the majority of telehealth visits, Jain said.
“People are shocked that demand for telehealth is not as high as people think,” she said. “A small group of people generated the most volume.”
Location mattered when counting which states saw the biggest decreases from the peak of the pandemic through the first quarter of 2021. South Dakota, for example, saw telehealth utilization fall 37%, even though the state passed a bill that would allow virtual visits to continue without an in-person exam first. Louisiana also saw telehealth utilization decrease 30%, according to the report. Other states saw visits flatten in the first quarter of 2021.
The primary users for telehealth also remained similar before and during the pandemic, even as the temporary closing of offices drove up demand for virtual visits. More than a third of telehealth visits in 2020 were coded as mental or behavioral health visits. But mental health had already been the leading use case for telehealth since 2019, and continued to be in 2021.
In the meantime, more companies continue to roll out or buy up telehealth offerings, such as Amazon’s rollout of its own telehealth offering or Walmart’s acquisition of MeMD. Publicly-traded telehealth companies, such as Teladoc and Amwell, gave relatively conservative forecasts for the rest of the year.
For example, Teladoc expects to have 52 million to 54 million paid members by the end of 2021, only a slight increase from its 51.5 million paid members at the end of March. Amwell, meanwhile, expects to conduct between 1.5 million and 1.6 million visits through its medical group, compared to 1.6 million in 2020.
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