Australia | May 12 2021
This story features GLOBAL HEALTH LIMITED, and other companies. For more info SHARE ANALYSIS: GLH
Last year's pandemic put the focus firmly on telehealth services providers, but share prices have deflated since as investors started asking questions, and on the general realisation telehealth has its limits too.
-Covid-19 triggered a rush into telehealth services and service providers in 2020
-Share market enthusiasm triggered a number of fresh telehealth IPOs
-Large cap companies ResMed and Cochlear among key beneficiaries
By Nikhil Gangaram
Nearly three decades ago, it took approximately 13 years to sequence the human genome. Today, the latest technology can have it done in just under an hour. The mind boggles to think how far and fast modern medicine has progressed and what it will look like in the future.
The covid-19 pandemic has provided the global and local healthcare sector with a shot of adrenaline. In order to adapt to the changing environment, the sector accelerated the development and implementation of technologies old and new almost overnight.
In particular, the once disregarded arm of telehealth was brought back to life in spectacular fashion. As a result, the telehealth boom has sparked a potential digitisation across the entire healthcare sector.
Diagnosis from a distance
The telehealth (telemedicine) segment is a broad term that encompasses services from telephone consultations to remote monitoring of intensive care units. Prior to the pandemic, Australia’s telehealth services were limited to rural and indigenous communities in addition to some aged care services.
The pandemic has seen a significant uptake in telehealth and remote consultations. According to Medicare data, 54m telehealth services have been delivered to 13.5m people in the last 12 months.
The most common types of services delivered were standard consultations, follow-up consultations, prescriptions, referrals, and mental health consultations.
The million-dollar question is whether telehealth is a band-aid solution or a permanent fixture in Australian healthcare. In addition to organic growth and patient retention, telehealth has the potential to deliver more cost-efficient, scalable, personalised, accessible and affordable healthcare.
The Federal government made its view clear recently, extending its telehealth service package for general practitioners, allied health providers and specialists to December 31, 2021.
According to Royal Australian College of General Practitioners President Dr Karen Price, the healthcare sector’s response to the pandemic has dragged general practice into the 21st century. As a result of surging patient demand for telehealth services, health practitioners are calling for a long-term telehealth plan with Medicare subsidies.
Telehealth heros of 2020
The surge in demand for telehealth services has not escaped investors in the Australian share market over the last twelve months.
Other beneficiaries have included the likes of online health directory 1st Group ((1ST)), though its share price also pulled back in 2021.
Cloud-based patient management company Oneview Healthcare ((ONE)) has only recently seen its share price come to life, but at circa 29c the level is nowhere near the $1.50 the shares were trading at back in 2018.
Many companies have taken advantage of the shift in momentum and pursued a listing on the ASX.
Harnessing the investor demand, Intelicare managed to raise $5.5m through its IPO whilst Doctor Care Anywhere raised $102m.
Another telehealth platform Doctors on Demand, backed by Sigma Pharmaceuticals ((SIG)), expects to go public in the near future.
Big players on speed-dial
ResMed ((RMD)) has been a long-standing market darling, with the company taking the spotlight during the height of the pandemic.
Along with six other companies, ResMed was summoned under the Defence Protection Act last year to help facilitate the production and supply of ventilators in the US.
However, the company’s much larger sleep apnoea arm suffered double digit declines in new patient diagnoses as patients kept their distance from hospitals and clinics.
Thanks to the Australian government's MBS telehealth initiative, ResMed was handed a temporary extra safety-net.
Level 2 sleep tests are a key part of the ResMed sleep apnoea business, where patients undergo tests monitoring their heart rate, air flow, respiratory effort and oxygen saturation.
Traditionally these tests are done in a clinic. However, under the new Medicare Benefits Scedule telehealth program, patients are able to have a Level 2 test conducted at home.
ResMed was not the only big-name player to utilise the benefits of telehealth. Following increased demand for remote care, the US Food and Drug Administration (FDA) accelerated its approval for Cochlear’s ((COH)) Remote Check solution.
The application is an alternative to in-person appointments by allowing Cochlear implant users to complete a series of hearing tests from home. Results are then sent remotely to the recipient’s clinic for review by their clinician.
Telehealth on hold
The benefits of telehealth and the digital delivery of healthcare is by no means a new phenomenon. Despite the many benefits and potential to transform healthcare, many clinicians and investors alike are cautious on its outlook.
Firstly, for many healthcare providers the virtual delivery of healthcare presents a steep learning curve. Although telehealth may be more efficient for simple visits, it does not offer the quality and assuredness of a proper physical examination or treatment of chronic health conditions.
The equity of telehealth also comes into consideration. It is a fact that patients who stand to benefit the most from these services are in remote locations or from lower socio-economic standings. When it comes to internet connectivity and reliability, these groups are the most disadvantaged.
There are also questions around the regulatory and privacy challenges of digital healthcare. The motive of the new types of telemedicine promoted by start-ups are also questionable, with investors being the most important beneficiaries rather than patients.
Now, although telehealth may be imperfect, it is part of the coming healthcare revolution.
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