Optum will end its virtual care business after three years. Industry experts aren’t too surprised by the news.
Healthcare industry leaders agree that the closures reflect broader trends in the telehealth market, with some providers struggling due to saturation and differentiation challenges. Experts believe that the most successful virtual care companies of the future will be those that provide personalized patient experiences, focus on the needs of niche communities, and pursue hybrid models of care rather than relying solely on virtual. We believe that we will be a company that adapts.
what happened?
Optum’s Virtual Care Unit offers virtual emergency and primary care visits and prescription refills in all 50 states. His Optum, a UnitedHealth Group company, launched its virtual care business in April 2021. At the time, pandemic restrictions were still prevalent and enthusiasm levels for telemedicine were high.
Christy Henderson, a former Amazon executive, served as CEO of Virtual Care until June of last year when she left to become CEO of musculoskeletal care provider Confluent Health.
News of the division’s closure first surfaced last week when Optum employees began posting on social media about the company’s layoffs.Optum confirmed the news in an email Tuesday. Med City News.
An Optum spokesperson wrote that virtual care “has been and continues to be core” to the company’s integrated care delivery model.
“As a company, we are committed to providing patients with a robust network of providers that offer virtual urgent care, primary care, and specialty care options. We are committed to the growth of our business and the people we serve. As always, we are supporting affected team members with job placement resources and filling in-house vacancies where possible. We will work to place them in the positions where they are available,” the spokesperson said.
At United Health Group investor conference Last November, Optum Health CEO Amar Desai declared that Optum has approximately 90,000 employed or affiliated physicians and an additional 40,000 advanced clinicians. did. Optum did not disclose the number of healthcare workers affected by the closure.
Has the telemedicine hype died down?
Health system data shows that the number of virtual visits has declined since 2021, and market research reports published over the past few years predict challenges in the telemedicine space.
For example, an August report from Trilliant Health showed that the telehealth market is becoming oversaturated, making it difficult for companies to stand out. Essentially, the boom in telemedicine providers that occurred in 2020 and 2021 was a result of the forced introduction of telemedicine during the pandemic, and now the market has to pick up the pieces, the report says. Says.
Sanjula Jain, the report’s author and chief research officer at Trilliant, said Optum’s decision to close its virtual care business was not surprising.
“The data suggests that virtual care is used by a niche segment of the population, and within that small population, almost half of users used it only once,” she said. Ta. “Furthermore, more than 60% of her telehealth visits were for behavioral health-related reasons, with only a small percentage of utilization by primary care services.”
Jain also said it is important to note that 30% of virtual visits for non-behavioral health exams require the patient to schedule a follow-up in-person visit for the same reason, and this This suggests that there is some degree of overlap and friction.
When you consider these data points in conjunction with the fact that employers are questioning the value that virtual care services provide to workers, it becomes clear that Optum is struggling to generate a return on its virtual care investments. It’s not surprising that this is likely,” she declared. .
Another healthcare executive, Anu Sharma, CEO of hybrid maternity care startup Milly, agreed with Jain.
“There has been a lot of excitement around virtual care, especially with the surge in adoption during COVID-19. However, there are few use cases for virtual-only care, and patients can still meet in-person when needed.” “The future of health care is not virtual but hybrid,” Sharma wrote in an email.
Optum’s virtual care unit is not the only telehealth provider struggling to find its footing in the post-pandemic world. For example, two of the nation’s largest virtual care providers have already implemented significant layoffs this year.Teladoc Health fired staff In January, following a series of layoffs in 2023, Amwell announced: The company laid off about 10% of its workforce in February.
“Not all virtual care is created equal.”
The virtual care providers that will succeed in the post-pandemic market will be those that personalize the patient experience to match the patient’s needs and preferences, said Chirag Shah, partner at Define Ventures.
“Medicine is incredibly personal, but the average medical experience is often very impersonal. “We have always believed in the power of virtual care to deliver, but not all virtual care is created equal,” he said.
This belief is reflected in the telehealth companies that Define Ventures has chosen to invest in, Shah added. For example, he noted that Tia offers care tailored to women’s needs, Found offers personalized weight loss programs, and Folx Health offers personalized care for his LGBTQ+ community. Found and Folx will offer virtual-only care, and Tia will offer hybrid care.
by email to Med City NewsFaatin Chaudhury, head of payer strategy and partnerships at Folx Health, noted that although telehealth adoption has decreased compared to the beginning of the pandemic, overall usage is still higher than pre-pandemic levels. did.
In her view, telehealth providers are not headed for a world of doom and must recognize the importance of tailoring care to the communities they serve and optimizing the patient experience. That’s all.
“The virtual health industry has grown and evolved significantly over the past few years, playing a critical role in expanding access to care for many people, especially LGBTQ+ and marginalized communities. Virtual Care is often a lifeline, providing accessible and comprehensive health care to people who face barriers to accessing traditional health services,” Chaudhry wrote.
Folx provides tailored care to the LGBTQ+ community, giving users a differentiated experience. Chaudhry noted that more than half of transgender people in the United States live in primarily rural states, making telemedicine essential to access.
However, not all telemedicine providers focus on such niche patients. That was not the case with Optum’s virtual care unit. That may be the main reason the company chose to shut down, according to another healthcare leader. Rishi Gowda, his CEO at healthcare AI company Crosby Health, agreed with Chaudhry, saying there is a noticeable trend among virtual care providers to focus on patient experience amid increased competition. That said, Optum appears to be strategically adjusting its focus to “enter markets where it has a larger footprint,” he wrote in an email.
“Given that UnitedHealth Group partners with multiple virtual care providers across a variety of specialties, it is understandable that the organization is focused on its approach to care management.Choose a specific lane “I believe that by refining our continuum of care strategy, UnitedHealth Group aims to improve the member experience by offering more customized and seamless virtual care services.” he said.
