In recent years, telemedicine has surged in popularity, with a staggering 76% of people expressing interest in using telehealth services. What began as tentative steps towards remote medical consultations has blossomed into a thriving industry, reshaping the landscape of healthcare delivery.
Telemedicine offers unparalleled convenience, accessibility, and efficiency, particularly evident in the current climate of social restrictions. As traditional barriers to healthcare access dissolve, patients and providers recognize the potential of telemedicine to enhance care delivery and streamline workflows.
This guide is a roadmap for entrepreneurs and healthcare professionals seeking to capitalize on the telemedicine boom. From understanding market dynamics to selecting the right technology partner, we explore the essential steps to launch a successful telemedicine practice. Join us as we explain how to start a telehealth business and unlock its boundless potential for innovation and impact on healthcare delivery.
Industry Overview: What Makes Starting a Telemedicine Business So Attractive
What emerged as feeble attempts to connect medical personnel in different locations has become a leading trend. According to the most recent U.S. Census Bureau Household Pulse Survey conducted between January 26 and February 7, 2022, approximately 22% of Americans have availed themselves of telehealth services within the last four weeks. Notably, a slightly larger proportion (11%) preferred video appointments, while 9% opted for phone consultations. As the social restrictions remain in place, the benefits of the telemedicine business model become even more evident. Especially given that many people won’t return to usual medical visits after the pandemic. Remote consulting is way too convenient to refuse from it.
The latest survey by Deloitte also confirms the rising use of telemedicine by physicians. In recent years, more doctors started using telemedicine technologies to communicate with patients, conduct physician-to-physician consultations, and perform various other actions.
The Changing Landscape in Telehealth System
According to Deloitte’s US consumer surveys, patient interest in virtual and digital health tools has risen over the past five years. However, the adoption of these tools among physicians has been inconsistent. Some doctors remain uncertain about the most effective ways to incorporate virtual health into clinical practice. In contrast, others are worried about the potential loss of the human connection that is a fundamental aspect of in-person healthcare.
The above statistics highlight the growing demand for telehealth services among patients and the potential resistance and adoption challenges from healthcare providers. This suggests a need for education and training to help providers effectively integrate virtual health tools into their practices while maintaining a solid patient-provider connection.
Global Telehealth Market Growth 2020-2027
These changes are evident from the increasing worth of the telemedicine market from 45.5 billion US dollars in 2019 to 175.5 billion in 2026 is a quantum leap. On top of that, Data Breach market research predicts that the telehealth industry will continue to grow within the next few years at a CAGR of 22.67%.
Apart from its market size, telemedicine boasts enviable stability. The 4X increase means that telemedicine solutions will continue to gain popularity in the upcoming years. According to McKinsey, approximately 250 billion of all Medicare, Medicaid, commercial OP, office, and home health spending can be virtualized.
Launching a telemedicine business, you can focus on any medical service or combine several options. This allows you to reach a broader target audience and maximize profit. Find out more info on how to create a telehealth business below.
If you want to learn more about the latest telemedicine trends, check out our recent article about the latest insights on telehealth industry solutions.
Main Types of Telehealth Services to Choose Between
Although each app has unique functionality and capabilities, most solutions fall under two broad categories. Telehealth applications are either synchronous or asynchronous. This subdivision reflects the approach to information exchange.
- Synchronous telehealth solutions are apps that support a two-way audiovisual connection between a patient and a healthcare provider. They substitute in-person appointments with the help of video conferencing.
- Asynchronous telehealth applications transmit recorded medical history to a health practitioner. They don’t connect patients and clinicians directly. Patients just upload their data to the platform enabling clinicians to follow the treatment progress.
If you are unsure how to start a telemedicine practice, choose the type of application first. This allows you to understand your target audience, what features they need, and how to implement them. Once you decide, you can move to more specific tech choices and market analysis. Find more information about types of telemedicine apps in our article Everything You Need To Know About Telemedicine: Statistics, Usage, Trends.
How to Start a Telemedicine Business: Top Tips You Need to Know
Whatever telehealth solution you want to launch, you must be careful with compliance. You must follow some price transparency regulations, HIPAA, and other state-specific standards. You should also decide on a pricing program, understand your marketing offer, and take some other essential steps listed below.
Learn Telemedicine Laws in Your State
Healthcare laws vary from state to state. Therefore, you must clarify what rules govern telemedicine services in your state and other territories you plan to target. For example, most states still require informed consent before providing telehealth services. The reimbursement policies also vary: whereas 50 states reimburse live video consultation, only 19 reimburse home visits. Understanding the applicable restrictions will allow you to stay compliant and inform users about reimbursement options.
Understand Your Market Position and Offer
You must decide on pricing to create a realistic business plan and factor in all expenses. We recommend analyzing your key competitors and their offer. Let’s say you want to design something similar to MDLive. A medical consultation costs from $0 to 82, depending on patient’s insurance. In Amwell, the cost of a visit is $79. In other comparable apps, the pricing ranges from $0 (for a fully reimbursed visit) to $200 for physiatry.
Understanding the market situation allows you to set balanced prices to attract users and business partners. Calculating the ROI of different features is also important to understand what functionality is worth its money and what isn’t. In your quest to set up a telemedicine practice, this will allow you to design a solution that starts to generate revenue shortly after being launched.
If you don’t know how to estimate software profitability, you can engage experts. Find a software development company with skilled business analysts who will conduct research for you.
Plan the Features Beforehand
Did you know that you need a physical address to bill insurance? Such an application won’t function properly without address collection and verification.
This is also the case with a variety of telemedicine software capabilities. If you build a synchronous telehealth solution, you won’t do without video streaming. Asynchronous communications require secure data storage. Solutions used for diagnostics must support high-resolution images. These are only a few examples of the things to consider.
That’s why you must figure out what features you need before investing in a tech solution. This allows you to offer compliant and quality telemedicine services.Need more insights? Check out our article about how to start your own telemedicine practice.
Key Components of Successful Telemedicine Business Model
Startups and healthcare business owners are the main categories of entrepreneurs interested in telemedicine solutions. In both cases, to start your own telemedicine business, you will need to have a reliable telemedicine program and a business model. Find out its key components and check what they mean below.
1. Customer Segment
Define your audience and the telehealth program. Who is your perfect customer? Then, divide your audience into smaller segments and define their specific needs. For example, you might target seniors aged 65+ in urban areas for chronic disease management or working professionals aged 25-40 for convenient primary care consultations. Identifying specific customer segments will help tailor your services and marketing efforts.
2. Value
Continue with the uniqueness of your services and the socioeconomic problems they can solve. For instance, your telemedicine service could provide affordable access to care for underserved rural populations or offer specialized virtual consultations for complex medical conditions.
3. Channels
Define the ways, like social media and traditional or online advertising, by which you’ll make the target audience aware of your product or services. For example, if you’re targeting a local customer segment aged 40-70, you might consider an advertising campaign in the local newspaper and find relevant community groups on Meta.
4. Customer Relationships
Think about how you can develop a positive emotional bond with your customers. For example, you could send birthday greetings and discounts, create a personal brand on Instagram with live conversations, and invite healthcare professionals to share interesting and relevant information.
5. Revenue Streams
Identify multiple revenue streams that align with your business model and customer needs. This could include subscription-based services, one-time consultations, premium features or add-ons, partnerships with insurance providers, or revenue-sharing agreements with healthcare facilities.
6. Key Activities
Define the core activities necessary to launch and operate your telemedicine business. This may include market research, software development, regulatory compliance, staffing, marketing and advertising, customer support, and ongoing service delivery.
7. Key Resources
Ensure you have access to the necessary resources to support your business operations. This includes technology infrastructure, skilled personnel (healthcare professionals, software developers, and customer support staff), strategic partnerships, and financial resources.
8. Key Partners
Define your stakeholders and outsource a team of tech professionals to help you launch your product. Depending on your business, you may also need marketing partners, medical billing services, and other strategic partners.
9. Cost Structure
Develop a comprehensive understanding of your expenses and potential costs for launching and scaling your telemedicine business. This includes upfront costs such as software development, hardware, licensing fees, regulatory compliance, marketing, staffing, and ongoing operational expenses. Consider conducting a thorough cost-benefit analysis to ensure financial viability and sustainability.
In summary, to develop a successful telemedicine business model you require a thorough understanding of customer segments, value propositions, engagement channels, revenue streams, cost structures, and others earlier mentioned points. Entrepreneurs can tailor their services to meet the specific needs of diverse patient populations, articulate a compelling value proposition that addresses socioeconomic challenges, and establish effective customer acquisition and retention channels. Additionally, strategic partnerships and efficient resource allocation are vital for driving operational efficiency and maximizing revenue potential. Ultimately, a well-designed telemedicine business model acts as a blueprint for navigating the complexities of the healthcare industry, guides decision-making, and delivers accessible, high-quality care to patients in the digital age.
Choosing the Right Telemedicine Platform
When launching a telehealth company, you will need to find a technology partner. It’s better to cooperate with a proven video communication company that has already created solutions for telehealth. There is a range of criteria that should be considered while opting for telehealth software and a good telehealth platform needs to meet the following requirements.
Data Security
The average cost of a healthcare data breach reaches $10.93 million. It’s the highest mark among all the industries. Therefore, by adopting a secure platform, especially in terms of secure messaging, you ensure the safe processing of confidential data and protect yourself from severe penalties.
Compatibility with Existing Software and Hardware
Telehealth software is often used simultaneously with other applications. When connected, they create a powerful multifunctional system that automates physician-patient communications and the treatment process. That’s why you must ensure the EHR interoperability with other tools and hardware you use. In particular, telemedicine software should allow you to record important communications in an EHR system automatically.
Healthcare Compliance
HIPAA compliance is the first thing you should keep in mind. In addition to HIPAA, some security and data exchange standards, including FHIR, ICD-10, and XDS/XDS-I, might be applicable. If you plan to use features that fall under these regulations, your telemedicine platform must meet their requirements.
The Combination of Rich Functionality and Simple UI
The first impression depends on a design by 94%. Applications with poor UI/UX won’t make users comfortable. As a result, you will have trouble selling such software on the market and attracting customers.
To avoid such problems, consider usability when selecting a telemedicine platform. Take time to test it and clarify whether it has the expected functionality. It’s essential to integrate a platform that fully covers your software needs but doesn’t include any unnecessary features. These will only confuse customers and make the product overpriced.
Tech Support
Tech support is a crucial step and aspect when you choose a platform for your telemedicine business, whether it will be a custom software development or off-the-shelf solution. In case you opt-in for a subscription solution, it’s essential to ensure the tech provider offers reliable technical support to troubleshoot any issues that may arise. To find a provider with excellent support you may research user reviews to get an idea of satisfaction levels and ask your network for referrals. In case you opt for a custom development approach, it is essential that your future outsource software development partner has sufficient resources to provide ongoing support for your team and customers. This may include dedicated support personnel for timely response times, and proactive troubleshooting measures to address any technical challenges effectively.
Ability to Scale
In case your ambitions and means are high, the ability to scale is critical in selecting a telemedicine platform. Why? It simply ensures proper operations even under high user loads. You certainly don’t want to rebuild your platform in a year, or switch to the new infrastructure because your old provider wasn’t ready for your success.
These are broad recommendations on what matters in telehealth vendors. The technical characteristics of the solution you are going to launch will depend on its functionality.If you cannot find a ready-made telemedicine platform that meets your requirements, consider custom telemedicine software development services. Custom platforms will have unique features that perfectly fit your market needs. No existing platforms can give you the same flexibility and security as customized solutions.
TOP 5 Out-of-the-box Telemedicine Apps
Out-of-the-box telemedicine solutions can provide a ready-to-use platform with core capabilities for providers looking to launch virtual care services quickly. Many providers opt for these solutions as a starting point before potentially transitioning to a more customized platform as their needs evolve. Here are five popular out-of-the-box options, along with some key features and use cases.
AmWell | A comprehensive, enterprise-grade telemedicine platform that offers video visits, remote patient monitoring, and integrated EHR/PM solutions. AmWell serves large health systems, health plans, and employers with capabilities for web-based and mobile virtual visits, e-prescribing, clinical documentation, and care coordination tools. |
Doxy.me | A simple, web-based video conferencing solution designed for the healthcare industry, it features virtual waiting rooms to manage patient flow, screen sharing for sharing clinical images/results, and provider-to-provider consultations. Doxy.me is popular among smaller practices for its ease of use and affordable pricing. |
Updox | Updox is an all-in-one platform that combines video visits with secure messaging, appointment reminders, and patient engagement tools tailored for practices of all sizes. It supports virtual visits and messaging directly within the patient’s EHR for seamless documentation. |
Thera-LINK | A HIPAA-compliant telemedicine solution purpose-built for mental and behavioral health providers. Thera-LINK offers HD video sessions, secure document sharing, e-prescribing, and tools for group therapy sessions. It is well optimized for telepsychiatry and telepsychology use cases. |
SimplePractice | While focused on virtual visits for mental health professionals, SimplePractice also includes full practice management capabilities like scheduling, clinical documentation, billing, and telehealth-specific features like client intake forms and progress tracking. |
Cost of Starting a Telemedicine Business
Whether you are a startup or a healthcare business owner who wants to know how to start a telehealth practice, the cost of starting a telemedicine business will be dictated by software. As it is the key component to ensuring your business’s success.
If you need custom software development, expect to spend at least $50,000. Such a telehealth app will be tailored to the clinical workflows and the needs of end-users. Custom software is a preferable option for the majority of telemedicine business models. Besides, outsourcing is an effective way to make custom telemedicine cheaper. You can delegate the telehealth software development to a remote company with lower rates in the market but equally skilled engineers.
An MVP will cost you up to $20,000 and take less time to develop. Testing your product before investing in a full-fledged version is a good time and cost-efficient option. Still, the functionality of MVPs is too limited to use them instead of custom applications in a long-term perspective.
There are also white-label telemedicine apps that cost around $15,000. They have the core features, but you won’t be able to offer anything unique or innovative. Attracting users to such applications can be challenging.
Note that the cost will be much higher if you need to invest in hardware (tablets, headphones, etc.) and software development. This is a usual extra expense for healthcare providers who adopt telemedicine solutions.
It is also crucial to consider the ROI telemedicine solutions may bring. The study found that telehealth was associated with substantial cost savings for patients with cancer. The estimated mean cost savings ranged from $147.4 to $186.1 per visit, with higher savings for new or established visits ($176.6 to $222.8) compared to follow-up visits ($141.1 to $178.1). These savings were driven by reduced travel costs ($79.7 to $146.0 per visit) and lost productivity costs ($61.4 to $77.2 per visit) using virtual visits instead of in-person appointments.
Telehealth can significantly reduce the indirect costs and financial toxicity associated with cancer care by eliminating travel time, lost productivity from missed work, and other non-medical expenses incurred by patients. While there are upfront costs to implement telemedicine, the potential return on investment in terms of cost savings for both providers and patients makes a strong case for expanding virtual care offerings, especially in oncology.
Final Thoughts
Starting a telemedicine business has many benefits and requires careful planning. You must follow state and federal regulations like HIPAA and data security standards. By understanding the market dynamics, crafting a targeted business model, and selecting the right technology partner, you can reap the benefits of the modern telemedicine approach.
While initial costs for custom software and infrastructure exist, the long-term benefits of providing convenient virtual care make it a worthwhile investment. Telemedicine enables providers to reach underserved areas, reduce costs compared to in-person visits, and deliver quality care efficiently. With a solid plan and the right technology, entrepreneurs can succeed in this rapidly growing industry, which improves healthcare delivery now and in the future.
If you’re ready to build a standout telemedicine solution tailored to your unique needs, Empeek offers expert custom software development services. Our experienced team has deep knowledge in healthcare regulations, telemedicine best practices, and the latest technologies. We work closely with clients to understand their requirements and design user-friendly, secure, and scalable telemedicine platforms. From ideation to launch and ongoing support, we provide end-to-end development to ensure your telemedicine business succeeds.
Check out our projects to understand how we work, or contact us to discuss your business idea.