the SECOND wave of TELEMEDICINE is here, let’s RIDE it

and why we invested in HEALEE

AUGUST 2022

by Sebastian Anastassiou (although full credit goes to the whole Nina Capital team who worked together getting to grips with the field)

I like analogies. Analogies are fun. They can take “serious” matters and convert them into a more enjoyable and digestible intellectual meal. In the spirit of fun analogies, I hope you find some educational amusement in my attempt to bridge the — *read in a smart, authoritative, and ever so slightly pompous voice* — “evolving market of telemedicine” with the far more enjoyable art of (and in all honesty what I would rather be doing right now) surfing.

hello, Healee! we are excited that you have joined our community of health tech founders

Firstly, I would like to apologize for the misleading title; you see, you are about to embark on a crash course in wave theory. In truth, you should not consider waves as individual and isolated phenomena — waves generally come in sets and lulls. A more accurate title would be “the second wave set of telemedicine is here”. Now, I promised “enjoyable” so I will not delve into the nerdy physics of wave dynamics and constructive/destructive interference (there are plenty of articles out there that you can follow down the rabbit hole). All you need to know is that when big waves reach the coast, they typically arrive in groups of between 3 and 15 waves — give or take a few — aka a set. The set is followed by a period of calmer undulating smaller waves that are not the big ones you would surf, aka a lull. This pattern repeats until the swell (the entire series of sets and lulls) dies down.

Now, three important insights will not only improve your surfing but also feed into the telemedicine analogy (I promise, we are getting to it — with a smidge of imagination, you may even be able to start connecting the dots yourself… I know, wild):

1. The best and most powerful waves in a set come in the middle, not the first and not the last — understanding how many waves there are in a set will help you choose the best one to surf.
2. Every individual wave has different phases — knowing how and where to position yourself (phase I) versus paddle hard and “pop up”, i.e. stand up (phase II) makes the difference between surfing it (phase III), missing the wave completely (missing phase II), and getting crushed in a spectacular wipeout (try to stand up in phase III)
3. There are other surfers in the water. Sometimes you can surf the same wave in different directions. Sometimes, if your friends are having fun and working together, you can share the wave going in the same direction, in blissful harmonious play. Sometimes, you need to know when to avoid a collision (you could fight for the wave but there is a certain surfer etiquette you should follow to save you from aggressive retaliation — surfers can be real assholes sometimes).

Ok, I think you are ready to ride the proverbial wave — let’s get serious.

The first wave set of telemedicine has come and gone; surfers such as Teladoc Health participated in this first set — quite successfully I might add — when new platforms along with their own clinician networks were created to provide services on top of the existing healthcare industry. These were the telemedicine pioneers, including our very own Marc Subirats (check out our team biographies), who co-founded Advance Medical and was one of the few who surfed all the way to an eventual merger with Teladoc Health (in fact, Teladoc Health as it operates today was born mainly out of the combination of three companies — Teladoc Health, Advance Medical, and Best Doctors). These pioneers laid the foundation for navigating and surfing the telemedicine wave set.

Although the COVID pandemic could be likened to a one-off 20+ meter monster of a wave propelling these telemedicine surfers to previously unimagined speeds and heights on the verge of losing control (the stock market shows that some have already had some nasty wipeouts)… We do not believe that the majority of healthcare will remain there: the massive wave has died down. We believe that every care provider is moving towards a hybrid model of interaction with patients, part virtual and part in-person. In fact, in our research, we show new data revealing that the use of telemedicine soared around the world early in the pandemic but has since declined considerably. We argue that telehealth should be seen neither as an add-on nor “the” preferred way of delivery of care. It should be treated as an integral piece of care delivery. Whether the right mix between the two modalities is 10–90 or 80–20 depends on the particular provider, which in turn depends on the patient population it serves. Whichever the mix, both modalities will coexist.

Now, post-pandemic, a new and more disruptive second wave set of telemedicine is here. On one end, traditional healthcare providers (hospitals, physicians’ clinics) are moving towards hybrid models of care to remain competitive. Simultaneously, a new generation of startups operating at the nexus of technology innovation and health are offering specialized care by recruiting specialist physicians and care professionals from the industry, often part-time. Fueling the change are numerous factors, including:

• the rising prevalence of chronic diseases, failed by the episodic model of care tethered to a hospital. Chronic diseases, obesity, and mental and behavioral health are significant cost drivers for the healthcare industry and society. Virtual care is much more than a cheap digital knockoff of in-person visits. It improves patient health, reduces costs, and makes care accessible to anyone with a smartphone, mainly when focused on the needs of a well-defined, recognizable patient community. Health outcomes data from the National Committee for Quality Assurance shows that virtual care can reduce expensive and unnecessary trips to the ER (up to 60% reduction demonstrated by Kaiser Permanente); help reverse the chronic-disease epidemic in the US and Europe (e.g. higher frequency medication adjustments in high blood pressure populations via telemedicine has proven to lower death from heart disease by over 40%); not to mention, make specialty care more efficient and accessible;
• the shift towards value-based care, including governments’ structuring the financial incentives to drive the adoption of telemedicine (take a gander at a great article penned by my colleagues Federico and Himanshu to learn more about value-based care);
• and obviously, the above are two sides of the same coin; the change in payment models is a response to the changing needs (and costs) of patient populations;
• furthermore, brick and mortar generalist providers are feeling threatened by the emergence of specialized telemedicine offerings, which are cutting into their precious revenue-generating services;

For surfers to take advantage of this second set, traditional care providers and emerging virtual care companies need the same: technology and solutions to deliver care remotely. The need calls for solutions well beyond a simple video platform: from booking to payment, from home testing to online prescriptions, from continuous monitoring to dynamic and timely communication… and, of course, robust and reliable management of information shared remotely.

The problem is that the overwhelming majority of healthcare providers do not have the resources, time, or expertise to build and maintain proprietary technology internally, buy telehealth companies, or adapt basic solutions that are very hard or impossible to customize. Also, there’s an integration challenge: some organizations need all functionalities, whereas most may have some and struggle to integrate the rest.

Healee has addressed this problem by finding a way to embed the different functionalities of a virtual care process in its entirety for established healthcare providers and emerging care companies to offer seamless virtual care services to their patient population. We see an opportunity for a technology company to provide not a one-size-fits-all prescription for implementing virtual care but a modular set of functionalities that can seamlessly integrate with each other and with the existing component of delivering care.

Healee has developed a plug & play, fully white-label software infrastructure that gives healthcare providers the ability to own and quickly deploy a customized virtual care platform. Armed with a need-driven, customer-centric, and design-mindful approach, Healee stripped its product down to the bare yet powerful essentials. The product’s apparent simplicity is a strength in selling; yet, it is powered by sophisticated software technology. Simplicity in design and complexity in development is Healee’s strength.

Staying true to the analogy, this new telemedicine wave set has both new and old surfers in the water — the original pioneers such as Teladoc Health have already gotten off the first waves, paddled back out to the lineup, and are getting on these new waves. However, this new set is not the same; there are more directions available, more surfers in the water, bigger and longer waves, and probably even more waves in the set to navigate.

Our challenge as investors is knowing where in the set we are (are we in the middle where the best waves are?) and finding the right surfers. The surfer’s challenge is not only to know where we are in the set but also to know which wave to focus on; which is the best wave? Which direction should they go? where and who are the other surfers? And, most importantly, when should we pop up and surf? We believe we are right in the middle of this second telemedicine wave set, and we have found one of the surfers capable of spotting and riding the right wave all the way to the shore.

Enter Healee, a way to embed the different functionalities of a virtual care process in its entirety for established healthcare providers and emerging care companies to offer seamless virtual care services to their patient population.

P.S. All analogies have flaws and need stretching a bit, so if you have finished this post having found plot holes and inconsistencies, chill out… go surfing.