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The UK Telehealth Market is forecast to grow by 11 per cent annually between 2020 and 2027, fuelled by smartphones and high demand for services — Chris Montgomery | Unsplash

Telehealth startups are faced with a sink or swim decision in the face of sudden demand jump

Healthcare startups have been conducting clinical trials and gathering their bodies of research for years. Telehealth services, whereby healthcare services are distributed via telecommunication methods, have been steadily growing in popularity and use. However, developments in healthcare and medicine take time and — coupled with regulatory obligations — companies must scale and grow incrementally for a chance to succeed.

With the COVID-19 pandemic forcing countries into lockdown and disrupting normal procedures, many patient startups have been faced with the potentially high-risk prospect of rapidly scaling to meet demand and help those in need around the globe. Telehealth startups have been particularly well-placed to step in and offer assistance via remote solutions while social distancing measures remain in place.

Startups “show what they can do”

Julia Hawkins, Partner at venture capital company LocalGlobe, explains that enhanced delivery of care in the industry has been long in the making.  She says: “Now we are getting the chance to use these for real on a mass scale. The crisis is giving health tech companies the chance to show what they can do.”

Klara was one such healthcare startup where, one day in March, co-founders Simon Bolz and Simon Lorenz were faced with the realisation that their company and team could potentially have a huge impact with immediate results. For many, the situation also presented the possibility for the long-term transformation of healthcare industries around the world: a prospect that numerous healthcare startups had been quietly aiming for over many years. The reward was high and the risk was arguably even higher. Historically, telehealth startups that fail to respect industry regulations have been hit hard.

The industry-specific challenge with moving quickly is being hit with regulatory constraints, most notably over patient data, privacy, tax and quality of care. Will Gibbs, Venture Capitalist and member of the Future of Health team at the venture capital firm Octopus Ventures highlights the need for telehealth startups to respect regulations and be patient to succeed. He comments that: “Companies that don’t take this data, privacy and efficacy seriously will be severely impacted. There is also a high risk that any flexibility in regulation may be reversed after this [COVID-19], so it is imperative for companies capitalising on this window to make sure the ROI they can offer is in the long term.”

Telehealth startup Klara steps up to phenomenal surge in video demand

Klara provides healthcare professionals with “easy communication, seamless telemedicine, and workflow efficiency” via their end-to-end virtual care platform that enables patients and professionals to communicate effectively. Founded in Germany and now based in the United States, the company has gradually tested and developed their platform for improving communication workflow management while focusing on institutions’ bottom line for the past almost seven years. Commenting on the situation, Bolz explains: “We had to make a decision: either we try to paddle and go with that wave, or not, and I think everybody understood that this is the time to step up.”

Knowing that the decision to go ahead would almost certainly mean working overtime and many sleepless nights, the team at Klara decided to seize the opportunity to go ahead and start scaling. Incredibly, the engineers and the company as a whole managed to upgrade their service and meet client requirements in less than a week. Three weeks after launching the video service, they are seeing 10,000 video visits every day with some clients having almost a hundred calls a day.

Long-term telehealth adoption

Many healthcare professionals and telehealth startup founders believe that we are currently in a watershed moment. Commonly held views and practices will be upended and these changes will endure long after lockdown and social distancing measures end and the pandemic has abated. However, others are more sceptical and will only believe the change when they see it. 

Mr Bolz believes that the current “adoption out of necessity” is convincing wary healthcare professionals that telehealth is indeed effective and that the process change now will lead to longer-term, industry-wide adoption. He explains that: “I just had a call with a primary care doctor and he said: ‘I’m completely surprised and overwhelmed by how few things I cannot do through telemedicine.’ It’s really a catalyst for technologies like ours. But the really cool thing is retention. It actually already started in the beginning of the year, but now it is overwhelming.”

Professionals and patients receptive to adoption of telehealth solutions

Mr Gibbs comments that telehealth companies will likely see sustained demand and continue to experience greater uptake when compared with other healthcare startups and services such as COVID-19 testing and personal protective equipment (PPE). He says: “The fundamentals that underpin [telehealth] becoming a core pillar of how healthcare is delivered in the long-term are sound: customer experience, efficiency, costs and making specialists more scalable. This window of opportunity could shave off months or years from general adoption.”

Furthermore, patients are now more active in their health and well-being than in previous years. Thanks to a general increase in health awareness as well as wearable health technology tracking apps, people have access to more data about their current state of health. Combined with this, patients express interest in more convenience and value from their care providers. Telehealth solutions such as Klara and others help to deliver this and, perhaps most importantly, patients and the public are openly embracing it as they attest to on their company blog. This is arguably the most promising feature for longer-term uptake and integration into how healthcare is delivered.


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