Telemedicine beyond COVID-19

Telemedicine stood out to be one of the few industries that benefited from the unprecedented worldwide lockdown due to coronavirus during the first half of 2020. 

July 27, 2020

Fang Liu

CFA, Senior Analyst, Credit Suisse Asset Management

As life gradually returns to normal, many people wonder if the global surge of telemedicine adoption and usage during the pandemic will last once the virus is contained. While it is always tricky to predict the velocity of consumer behavior change, we explore the idea of “telemedicine as virtual primary care” and consider whether the accelerated digitalization telemedicine brought to the healthcare triage system could turn out to be ubiquitous, efficient, and structural.

"Demand has shifted forever on virtual care and we are on the verge of a new era for virtual care in the healthcare system."
Jason Gorevic, CEO of Teladoc1

Convenience and positive user experience driving early adoption

We often do not appreciate the opportunity cost of visiting a doctor in a clinic. According to research in The American Journal of Managed Care in 2015, for a 20-minute consultation with a physician in the U.S., a patient has to spend on average 37 minutes on travel and 64 minutes on waiting at the physician’s office.2

The potential benefit of convenience sounds obvious, yet the adoption of telemedicine consultations only started to take off when smart phones became widely available as the usage of images and videos significantly increased the effectiveness of diagnostics and improved patients’ overall virtual consultation experience. Both academic research and industry leaders have published high satisfaction rates among telemedicine users, praising improved outcome, ease of use, low cost, increased communication and decreased travel time.3

According to a research by Harvard Medical School, the use of telemedicine among large commercially insured population climbed from 0.02 visits per 1,000 members in 2005 to 6.57 visits in 2017.4

Global spike in usage further driving awareness

Amid the outbreak of COVID in China early 2020, Ping An Good Doctor, Alibaba Health and We Doctor, the local leaders in telemedicine, witnessed a rapid rise in usage. Ping An Good Doctor received 1.11 billion visits in total and the number of newly registered users grew 10 times5, and the total active users of Alibaba’s healthcare channel reached 390 million in the first quarter of 20206. With 1,500 in-house doctors, Ping An Good Doctor was also able to offer free of charge telemedicine services to support the people most in need amid the crisis.

As the pandemic spread to the U.S., Teladoc saw total visits exceeding 2 million in the first quarter of 2020, representing nearly 90% growth year-on-year, of which 60% were first time users seeking to check potential COVID symptoms, followed by dermatology and mental health consultations.7

As usage rose, awareness of the benefits of telemedicine spread through word of mouth, media and social media channels, creating a circular effect.

The crisis might trigger a tipping point in deregulation

Policy makers have long held a skeptical view on granting telemedicine the same status as face-to-face consultations, on concerns around misdiagnosis or inappropriate drug prescription, to name a few. Even today, in many states in the U.S., telemedicine consultations are not reimbursed at the same rate as clinical visits. In Japan, online consultation is not permitted for first-time physician visits, and it was not until September 2019 that the Chinese government issued guidelines on including telemedicine reimbursements in the national insurance scheme.
These restrictions were swiftly lifted on either a permanent or temporary basis during the pandemic. Notably in the U.S., CMS expanded the coverage of Medicare to telemedicine from March 2020, and the Japanese government temporarily allowed first-time consultations to be carried out online.
We believe this experience will prompt policy makers to take a more serious and proactive approach to integrating telemedicine into the broader healthcare system and fully realize its potential of containing healthcare cost yet without compromising patient satisfaction. As a starting point, savings from lower fixed cost overheads and the reduced administrative burden for physicians’ offices is already a sizeable area to tackle. Ultimately it is likely that such savings may be passed onto patients in the form of lower co-pay and lower deductibles, hence more affordable healthcare.

From acute care to “virtual primary care”

In the last decade, the shortage of primary care physicians in the U.S. has driven up the time that a patient needs to wait to schedule an appointment. A 2017 survey found that on average there is a 24 day waiting time for patients in the U.S. to schedule a new physician appointment in a large city.8 In contrast, the average waiting time for an online consultation is typically fewer than 10 minutes. Therefore, the use of virtual care is an obvious substitute for a face-to-face visit particularly for patients with a more urgent condition. However, we now are seeing an exciting evolution from this initial purpose of use.

Virtual behavioral health has grown rapidly in recent years because the lengthy and recurring nature of the disease makes it particularly suitable for an online format. Major players now offer unlimited monthly mental health online consultation packages that include text, audio or video and have received very positive feedback. The opportunity seems considerable, since the healthcare market for mental health disorders is approximately $24 billion in the U.S. alone and online penetration is still low.
Alternate text

Figure 1. Total addressable market for current and potential telehealth conditions

Sources: Agency for Healthcare Research and Quality, 2012. Charles R, Zachary W, James A, Initiation: First in the water, catching the rising tide of telehealth, July 10, 2015, Page 19, Cowen and company.

Another promising field is the combination of remote monitoring and telemedicine to create better preventive care. Innovations such as remote diabetes and cardiac management have proven to be safe, time-saving and cost-effective solutions with high patient satisfaction.9 The democratization of these solutions could prove highly beneficial considering that a large cohort of the global population suffers from long-term chronic diseases. The situation in the U.S. is alarming, as nearly one in three adults do not have primary care physician, while 60% of the population had at least one chronic condition throughout their lives.10 11

Virtual Primary Care (VPC) is a comprehensive offering encompassing urgent care, behavioral health, mental health, chronic disease management or other specialty cares such as pediatric telehealth offering – a tailored solution for each consumer at different stages of their life.

Some innovative offerings are already available on the market. For example, MDLive launched a virtual primary care platform to improve patient access, in partnership with Cigna in January 2020. 

"The MDLIVE virtual primary care platform will help health plans and health systems shift from reactive care to proactive and predictive health management and care. Our collaboration with Cigna reflects our combined commitment to launch the next generation healthcare experience that starts online,"

said Rich Berner, Chief Executive Officer of MDLIVE.12

Doctor On Demand, another leading telemedicine provider in the U.S., partnered with Humana to create a new health plan that puts virtual primary care at the centre of care, with significantly lower monthly premiums. 

"If you’re trying to take care of the 300 million-plus people in the United States, you’ve got to use a virtual front door to get there,"

said Hill Ferguson, Chief Executive Officer of Doctor on Demand.13

At the other end of the spectrum, VPC platforms could provide the best smart referral system for patients in need by connecting with a specialty centers of excellence from around the country, not limited by the patient’s proximity. This would require the platform to integrate itself into the broader community healthcare system. Then by creating healthy loop in data exchange and analyses, the VPC provider would be able to offer better “population health” and ultimately lower primary care cost.

We think it is a plausible idea that VPC could establish longitudinal relationships between a patient and a virtual primary care doctor, with the patient’s electronic medial record, appointments and payment history all accessible from one place.

Who will be the winner?

In any consumer facing online businesses, traffic is the primordial condition for success, and online VPC would be no different. When and if virtual primary care indeed becomes the future access point of mass community care, we would assume the winner should possess a strong consumer brand name that inspires trust and reliability, built on a frictionless user experience.
The VPC platform should also ensure its interoperability with the rest of healthcare IT system and the fluid exchanges of data while respecting data privacy under different regulation requirements. Therefore, we believe companies that are “digital and cloud native” should have an advantage.
Last but not least, the winner should have strong distribution capability into the different stakeholders of the healthcare system, i.e. employers (in the case of U.S.), payers, providers, and consumers.

Digital Health

Applicability worldwide under different healthcare systems

The U.S. healthcare system is somehow unique as most of the countries in the world today are under “single payer + hybrid (private and/or public) provider” payment model. However, we believe that the VPC model is equally valid to countries that have single payer systems or limited face-to-face primary care services, such as China, where primary care physicians are in short supply. In the case of Japan, where the majority of the clinics are still operating on a paper and fax basis, telemedicine is empowering the clinics to leapfrog directly to the digital world with “SaaS Electronic Medical Records”, bypassing the on-premise EMR solutions.
On the provider side, we begin to see more and more public and private healthcare systems providers start to engage proactively in conversations with major telemedicine providers either in a quasi-outsourcing model, or in technology-licensing model.



  • No capital protection: investors may lose part or all of their investment in this product.
  • Political developments concerning the health care sector could have a significant adverse impact on the Digital Health sector.
  • Exposure to small and mid caps can result in higher short-term volatility and may carry liquidity risk.
  • As the fund focuses on highly innovative companies, volatility can be significantly elevated.
  • Equity markets can be volatile, especially in the short term.

Do you have any questions?

1, last accessed 18 June 2020
2 Kevin NR, Amalavoyal VC, John E, Marnie B, Ateev M. Opportunity Costs of Ambulatory Medical Care in the United States. AJMC, 2015
3 Clemens SK, Nicole K, Blanca R, Lan T, Jackeline V and Matthew B, Telehealth and patient satisfaction: A Systematic Review and Narrative Analysis. BMJ, 2017
4 Barnett ML, Ray KN, Souza J, Mehrotra A. Trends in Telemedicine Use in a Large Commercially Insured Population, 2005-2017. JAMA. 2018;320(20):2147–2149. doi:10.1001/jama.2018.12354
5, last accessed 18 June, 2020
6 Conversation with Alibaba Health management, June 2020
7 Teladoc 1Q20, earnings call, 29 April, 2020
8, last accessed 18 June, 2020
9 Xu T, Pujara S, Sutton S, Rhee M. Telemedicine in the Management of Type 1 Diabetes. Prev Chronic Dis. 2018;15:E13. Published 2018 Jan 25. doi:10.5888/pcd15.170168
10 Accenture Digital Health Consumer Survey, 2019
11, last accessed 18 June, 2020
12, last accessed 18 June, 2020
13, last accessed 18 June, 2020




Fee Disclosure
Where permitted by law, we may receive fees, commissions or other monetary benefits in connection with this product from third parties. For details please refer to your Fee Schedule or contact your Relationship Manager.

If you are not a client of Credit Suisse UK Ltd
If you are not a client of Credit Suisse, please note that this document has been provided to you for information purposes only as an example of the type of products we are able to offer to you should you become a client of Credit Suisse. The provision to you of this document does not constitute an invitation or inducement to buy or sell any security or other financial investment, nor does it constitute an advice or personal recommendation. Should you wish to invest in any products, you will have to go through our account opening process which involves providing us with details of your personal and financial circumstances, risk appetite and investment objectives as well as selecting the most appropriate portfolio mandate for you. We can thereafter work with you to determine which investments are suitable or appropriate for you.

Marketing Disclaimer
This document is provided to you for your information and discussion only. It is not a solicitation or an offer to buy or sell any security or other financial instrument. Any information including facts, opinions or quotations, may be condensed or summarised and is expressed as of the date of writing. The information may change without notice and Credit Suisse (UK) Limited (“Credit Suisse”) is under no obligation to ensure that such updates are brought to your attention. The price and value of investments mentioned and any income that might accrue could fall or rise or fluctuate. Past performance is not a guide to future performance. If an investment is denominated in a currency other than your base currency consult with such advisor(s) as you consider necessary to assist you in making these determinations. Nothing in this document constitutes legal, accounting or tax advice. Credit Suisse does not advise on the tax consequences of investments and you are advised to contact a tax advisor should you have any questions in this regard. The levels and basis of taxation are dependent on individual circumstances and are subject to change. This document has been prepared from sources Credit Suisse believes to be reliable but we do not guarantee its accuracy or completeness and do not accept liability for any loss arising from its use. Credit Suisse reserves the right to remedy any errors that may be present in this document. Credit Suisse its affiliates and/or their employees may have a position or holding, or other material interest or effect transactions in any securities mentioned or options thereon, or other investments related thereto and from time to time may add to or dispose of such investments. Credit Suisse may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment to any company or issuer mentioned. Some investments referred to in this document will be offered by a single entity or an associate of Credit Suisse or Credit Suisse may be the only market maker in such investments. This document is intended only for the person to whom it is issued by Credit Suisse. It may not be reproduced either in whole, or in part, without our written permission. The distribution of this document and the offer and sale of the investment in certain jurisdictions may be forbidden or restricted by law or regulation. Investments may have no public market or only a restricted secondary market. Where a secondary market exists, it is not possible to predict the price at which investments will trade in the market or whether such market will be liquid or illiquid. Where such investments will not be listed or traded on any exchange, pricing information may be more difficult to obtain and the liquidity of the investments may be adversely affected. A holder may be able to realise value prior to an investment’s maturity date only at a price in an available secondary market. The Issuer of the investment may have entered into contracts with third parties to create the indicated returns and/or any applicable capital protection (in part or in full). The investment instrument's retention of value is dependent not only on the development of the value of the underlying asset, but also on the creditworthiness of the Issuer and/or Guarantor (as applicable), which may change over the term of the investment instrument. In the event of default by the Issuer and/or Guarantor of the investment and/or any third party, the investment or any income derived from such contracts is not guaranteed and you may get back none of, or less than, what was originally invested. Parties other than the Issuer or Guarantor (as appropriate) mentioned in this document (for instance the Lead Manager, Co-structurer, Calculation Agent or Paying Agent) do neither guarantee repayment of the invested capital nor financial return on the investment product, if nothing is indicated to the contrary. You may have to accept smaller returns on an investment relative to a direct investment in the underlying index, basket, etc. because of the costs involved in providing the capital protection. Such capital protection normally only applies if the investment is held until maturity. The amount of initial capital to be repaid may be geared, which means that a fall in the underlying index or securities may result in a larger reduction in the amount repaid to investors. Where this document relates to packaged products (such as regulated collective investment schemes), any advice offered to retail clients is based on a selection of products from the whole of the market. Where this document relates to emerging markets you should refer to the Risk Disclosures section of the Credit Suisse Terms of Business. Additional information is, subject to duties of confidentiality, available from Credit Suisse upon request. Hedge Fund strategies may include the use of leverage (borrowing) and derivative instruments resulting in certain risks, some of which are as follows: leveraged investments, by their nature, increase the potential loss to investors resulting from any depreciation in the value of such investments. Consequently, a relatively small price movement in a leveraged instrument may result in a substantially greater loss to the Hedge Fund. The market in some of the investments made as part of a Fund’s strategy may be relatively illiquid, giving rise to potential difficulties in valuing and disposing of such investments. Information for determining the value of investments held by a Fund may not be readily available which has corresponding implications for the overall valuation of a Fund. Accurate risk profiling of the Fund holdings may also not be readily available. Always refer to the Fund’s Prospectus and/or the Key Investor Information Document before making an investment. Your personal data will be processed in accordance with the Credit Suisse Privacy Policy published at Credit Suisse (UK) Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority for the conduct of investment business in the United Kingdom. The registered address of Credit Suisse (UK) Limited is Five Cabot Square, London, E14 4QR. If you have any questions regarding the document, please contact your Relationship Manager.