Telehealth Teeters On Brink As Funding Fever Fades
Telehealth is plagued by dwindling capital, poor customer experiences, and declining usage — and there’s no cure in sight. Following a $29B surge in COVID-related funding, a crop of once-unicorn startups have gone bankrupt. As venture capital support drops off, the industry struggles to establish self-sustaining business models.
- Adult use of telemedicine fell from 37% in 2021 to 30% in 2022, coinciding with a decrease in industry-wide funding to $10.7B last year.
- Amidst these setbacks, Walmart pulled the plug on its telehealth platform, and Amazon consolidated its program to streamline operations.
Medicine meltdown: At the heart of telehealth issues lies expensive products with subpar service. Mail-order drugs can cost up to 35x more than those from pharmacies — assuming they arrive at all. Customers of CarelonRx, a digital pharmacy launched by Elevance Health, have faced month-long delivery delays only to receive incorrect prescriptions — or none at all. This debacle led to the resignation of CarelonRX’s CEO this spring, with industry experts acknowledging a sector-wide need for “retrenching.” As zombie-like companies roam the telehealth scene, it’s clear the industry needs a resurrection.
