COVID-19 Pandemic Accelerates Healthcare Industry Shifts and Innovations

The COVID-19 pandemic significantly impacted the healthcare industry, leading to significant changes and innovations in response to the crisis. As hospitals and healthcare providers battled to contain the outbreak, the pandemic accelerated the shift towards digital health technologies, including telehealth and cloud-based services. Retail pharmacies and healthcare giants continued to expand their reach in the market, while employers and insurers sought new commercial insurance models to mitigate healthcare costs. In response, PBMs were forced to reassess their business operations, and big tech companies like Microsoft, Google, and Amazon Web Services (AWS) made significant moves into the healthcare space.

Key Takeaways:

• Telehealth use grew significantly in 2020, with companies like Teladoc seeing a 163% increase in telehealth visits, reaching 7.6 million visits compared to 2.9 million in 2019.
• Retail pharmacies like CVS and Walgreens continued to expand their reach in the market, with CVS administering 6 million COVID-19 tests between March and the end of Q3.
• New commercial insurance models emerged, such as Aetna's Upfront Advantage and Flexible Five benefit designs, which offered access to free services for members before they pay their deductibles.
• PBMs were forced to reassess their business operations, with startups like RxAdvance beginning to plot out what the PBM model looks like without rebates.
• Big tech companies like Microsoft, Google, and Amazon Web Services (AWS) made significant moves into the healthcare space, including launching new tools and services to aid in fighting the pandemic, such as AI-based chatbots and digital contact tracing technology.

Statistics:

• 163% increase in telehealth visits at Teladoc between Q1 and Q3 2020 (Source: Fierce Healthcare)
• 7.6 million telehealth visits at Teladoc in 2020 (Source: Fierce Healthcare)
• 2.9 million telehealth visits at Teladoc in 2019 (Source: Fierce Healthcare)
• 6 million COVID-19 tests administered by CVS between March and the end of Q3 2020 (Source: Fierce Healthcare)
• 40 additional joint primary care clinics to be opened by Walgreens and VillageMD by summer 2021 (Source: Fierce Healthcare)

Sources:

• Fierce Healthcare
• Fierce Healthcare/Background on COVID-19 impact on telemedicine
• Fierce Healthcare/Pharmaceutical Benefit Managers (PBMs) will have to rethink their business models
• Fierce Healthcare/ Healthcare Startups Prepare for Major Healthcare Business
• Fierce Healthcare/Amazon launches Amazon Pharmacy to Compete in the Health Market
• Fierce Healthcare/Google Launches Google Health Studies App to Compete with Apple
• Fierce Healthcare/Google Cloud, Deloitte, and KPMG Team Up to Launch Healthcare Interoperability Program