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Exploring Market Trends, Competitor Strategies, Regulatory Challenges, and Technology Solutions in Mental Health, Urgent Care, and Primary Care Telehealth
Telehealth – the delivery of healthcare via digital and telecommunications technologies – has evolved from a niche offering into a mainstream mode of care in the United States. Spurred by the COVID-19 pandemic and advances in technology, virtual care usage and investment have surged.
This report provides a comprehensive market analysis for launching a digital-first telehealth startup focused on mental health, urgent care, and primary care services. Key areas include current market size and growth trends, the competitive landscape of major telehealth players, regulatory and compliance factors, common investment and revenue models, the required technology stack, and consumer trends including public sentiment on social media. The goal is to equip a healthtech entrepreneur with actionable insights and data-driven context for entering the U.S. telehealth market.
1. Market Overview & Growth Trends
U.S. Telehealth Market Growth – Telehealth usage and market size have expanded rapidly in recent years.
The U.S. telehealth industry has experienced explosive growth, both in market value and utilization. Market Size & Growth: The U.S. telehealth market was estimated at $42–54 billion in 2023-2024 and is projected to grow at a ~20–24% compound annual growth rate (CAGR) through the rest of the decade.
This expansion is fueled by increasing demand for remote care, supportive government policies, and near-ubiquitous internet and smartphone access. For instance, 276 million Americans use smartphones, providing a ready user base for mobile health apps and video visit platforms.
Virtual visits became a critical lifeline during COVID-19, prompting Medicare and private insurers to expand telehealth coverage and acclimating millions of patients and providers to online care. As a result, telehealth has transitioned from a pandemic stopgap to an integral component of healthcare delivery.
Adoption & Utilization: The adoption of telehealth soared from almost negligible levels pre-pandemic to sustained high usage. In 2019, only about 0.1% of outpatient visits took place via telehealth; by 2023, roughly 17% of all patient visits were conducted remotely.
At the height of COVID-19 lockdowns, virtual visits temporarily comprised up to 50% of all visits in certain settings. Utilization has since stabilized at a “new normal” far above pre-2020 levels. By 2022–2023, around 20–25% of U.S. adults reported having a telehealth encounter in the past month, and 24% of Medicare fee-for-service beneficiaries used telehealth in 2023.
Telehealth use remains especially robust for routine follow-ups and behavioral health. According to McKinsey, the telehealth utilization rate in 2023 is roughly ~10–15% of all eligible healthcare services, indicating substantial room for growth as technology and comfort with virtual care improve.
Tele-mental health dominance – Mental health conditions now account for the majority of telehealth visits, reflecting strong demand for virtual therapy and psychiatry.
Mental Health Leads Telehealth Usage: Notably, tele-mental health has become the single largest segment of telehealth services. Virtual behavioral health visits grew dramatically and have remained high even as other specialties’ tele-visits tapered. One multi-year analysis in Colorado (2019–2023) found mental health concerns rose from 29% of telehealth visits in 2019 to 58% in 2023. Nationally, telehealth is now a preferred channel for mental health care, with psychiatry and therapy exhibiting among the highest telehealth adoption rates (up to ~50% of all visits in psychiatry are via telemedicine).
Even as in-person clinics reopened, 36% of mental health visits continued via telehealth, compared to just 5% for non-mental health visits. This reflects how virtual care has alleviated barriers to counseling (e.g. stigma, provider shortages, travel) and met surging demand for mental health services. Beyond behavioral health, telehealth is commonly used for urgent care (minor illnesses, infections, rashes), primary care check-ins, prescription refills, chronic disease management, and other non-emergency consults.
Patients and providers have grown more comfortable with “virtual-first” care for these use cases, especially when convenience and quick access are priorities. A 2023 J.D. Power survey even found that telehealth emerged as the preferred channel for routine care (like minor illness treatment and follow-ups) for many patients.
Outlook: The telehealth sector is expected to sustain strong growth. Analysts project the U.S. market will reach several hundred billion dollars by 2030, maintaining double-digit annual growth. Telehealth now accounts for a significant share of overall healthcare: the U.S. comprised ~35% of global telehealth revenue in 2023.
Growth drivers include: ongoing consumer demand for convenient access; provider adoption as telehealth workflows become standard; continued coverage parity and reimbursement for virtual services; and expansion into remote monitoring, digital therapeutics, and other telehealth adjacencies. In short, telehealth is no longer an experiment – it is a fast-growing, integral segment of U.S. healthcare.
2. Competitive Landscape
The telehealth landscape in the U.S. features a mix of large nationwide platforms, specialized service providers, and newer entrants (including big-tech and retail health players). Competition is intensifying as each strives to differentiate in services, scale, and partnerships. Key categories of competitors include:
Dedicated Virtual Care Companies: Teladoc Health is widely recognized as the largest telehealth provider, with $2.4 billion in revenue in 2022. Founded in 2002, Teladoc offers a broad suite of services (24/7 on-demand urgent care, primary care, specialty consults, second opinions, mental health, and chronic care management).
It boasts a network of tens of thousands of clinicians, serving 50 U.S. states and even international markets (175+ countries) via its platform. Teladoc’s differentiators include its scale, insurance integration, and “whole-person” care approach – it acquired chronic disease platform Livongo and mental health service BetterHelp, allowing it to address physical and mental health in tandem.
Teladoc primarily operates on a B2B2C model, contracting with employers and insurers for a per-member-per-month access fee (granting their members virtual care access) and charging per-visit fees or co-pays. This gives Teladoc a recurring revenue base and broad patient reach through health plans.
American Well (Amwell): is another major player, historically focused on white-label telehealth solutions for health systems and insurers. Amwell provides an enterprise-grade telehealth platform (“Converge”) used by over 2,000 hospitals and major insurers (Anthem, UnitedHealthcare, etc.).
It enables those clients to conduct video visits, remote patient monitoring, and even “hospital-at-home” programs under their own branding. Amwell also has an affiliated medical group that can directly serve patients in all states. With strategic backing from Google, Amwell emphasizes technology integration (e.g. leveraging AI and cloud services) and enterprise partnerships.
It reported 80 million lives covered through its platforms. Amwell’s differentiator is being the behind-the-scenes telehealth infrastructure for traditional healthcare entities.
MDLive is a prominent telehealth provider (acquired by Cigna’s Evernorth in 2021). MDLive’s platform offers on-demand 24/7 urgent care, virtual primary care, behavioral health therapy/psychiatry, and even dermatology consultations. It contracts with many commercial health plans and employers, giving millions of insured patients access to MDLive’s services often with low copays. Now under an insurer, MDLive focuses on seamless integration with insurance benefits and clinical quality. Its services can also integrate into health system workflows.
Doctor On Demand (Included Health) has been a well-known direct-to-consumer telemedicine app focusing on urgent care, primary care, and mental health. In 2022 Doctor on Demand merged with Grand Rounds and the Included Health platform in a $750 million deal, forming a comprehensive virtual care and care navigation company.
The combined entity (branded Included Health) serves 140+ million covered lives through employer and health plan contracts. Doctor on Demand built its name on the promise of seeing a doctor or therapist within minutes via smartphone. Its ease of use and upfront pricing made it popular among consumers, while the merger added care coordination services and specialist referrals.
Virtual Mental Health Specialists: Given the high demand for tele-mental health, several players focus on online therapy and psychiatry. BetterHelp (a Teladoc subsidiary) and Talkspace are two prominent examples catering directly to consumers. Talkspace, for instance, has served over 1 million users with online therapy via text, video, and audio messaging.
It offers subscription plans that match patients with licensed therapists and include weekly live sessions or unlimited texting. BetterHelp, acquired by Teladoc in 2015, operates a similar model at larger scale – by 2022, BetterHelp was reportedly delivering over $1 billion in annual revenue in the online counseling market.
These platforms’ differentiators are their mental health specialization, large networks of therapists, and consumer-friendly apps that grant quick, stigma-free access to counseling. However, they typically function outside of insurance (cash-pay subscriptions), whereas newer competitors like Lyra Health and Ginger (Headspace Health) contract with employers to cover therapy as a benefit.
Retail Health & Tech Entrants: Non-traditional players have moved into telehealth, leveraging their brand reach. Notably, Amazon acquired primary care telehealth provider One Medical for $3.9 billion in 2023, gaining a hybrid model of membership-based virtual primary care plus in-person clinics.
Amazon also launched its own Amazon Clinic for direct-to-consumer virtual visits for common ailments. Similarly, Walmart entered telehealth by acquiring a telemedicine provider (MeMD) to fold into its Walmart Health services. These entrants aim to integrate telehealth with pharmacy, retail clinics, and consumer tech – for example, Amazon’s vast logistics could enable at-home lab kits or medication delivery following a telehealth consult.
Alphabet (Google) has invested in Amwell and launched health AI tools, while Microsoft and Zoom market HIPAA-compliant video platforms to providers. This big-tech presence underscores that telehealth is seen as a growth frontier, though these companies often partner with or enable the dedicated telehealth providers rather than deliver care directly.
Traditional Providers Offering Telehealth: Another source of competition comes from hospital systems, physician groups, and startups providing telehealth as part of broader care. Post-pandemic, most large health systems (e.g. Kaiser Permanente, Cleveland Clinic) offer their own telehealth visits through their patient portals. Many use platforms by Amwell, Zoom, Doxy.me, or their electronic health record (EHR) vendor (Epic’s MyChart video visits) to connect patients with their existing doctors.
Independent telehealth startups also target niches – for example, PlushCare (acquired by Accolade) provides virtual primary care with same-day visits and prescription management, integrated with insurance networks. Niche services like Hims & Hers and Ro focus on specific conditions (e.g. hair loss, erectile dysfunction, birth control, anxiety) via telehealth and mail-order pharmacy, often on a direct-to-consumer subscription basis. While these specialized direct-to-consumer brands lack the breadth of Teladoc or Amwell, they excel in marketing and targeting specific demographics (e.g. young adults seeking convenient, stigma-free treatment for sensitive issues).
Market Positioning: The competitive landscape can be viewed in segments – enterprise vs. direct-to-consumer and broad-spectrum vs. specialty. Teladoc and Amwell lead in enterprise market share (serving insurers, employers, health systems), with Teladoc known for breadth of services and Amwell for platform solutions. MDLive and Included Health also compete in this space with strong insurer/employer relationships.
In direct consumer mindshare, brands like Hims/Hers, Ro, BetterHelp, Talkspace, and Zocdoc (for finding telehealth appointments) are notable. Interestingly, one analysis found that Zoom’s video platform held ~36% share of telehealth “vendors” used by providers (simply because many doctors turned to general video-call software during the pandemic)
– highlighting how even tech companies not specific to healthcare became inadvertent competitors. However, as telehealth matures, providers are shifting to purpose-built solutions (proprietary telehealth software had grown to 12%+ share, up from 9% a year prior).
Competitive Differentiators: Telehealth startups can differentiate via: Service scope (urgent care-focused vs. therapy-focused vs. all-in-one), target segment (consumer self-pay vs. enterprise-covered patients), technology (AI-driven triage, EHR integrations, user experience), provider network quality (e.g. are clinicians full-time staff or gig-based contractors?), and pricing model (subscription vs. fee-for-service).
For example, Included Health emphasizes an integrated navigation plus telemedicine model for employers; Hims & Hers emphasizes branding and lifestyle appeal; and Talkspace highlights asynchronous therapy options (text therapy). Quality and trust are increasingly important as well – startups must maintain high clinical standards and patient satisfaction to stand out in a crowded field.
Brand loyalty in telehealth is not robust yet (one study noted telehealth may not engender strong consumer loyalty, as many patients choose options based on convenience or insurance coverage). This means new entrants can capture share if they offer a superior or more convenient experience.
In summary, an entrepreneur entering telehealth will face well-capitalized incumbents like Teladoc and a variety of niche rivals. However, the market’s rapid growth and the relatively fragmented competition (no single player dominates all segments) leave room for innovative models. Partnering with larger entities (health plans, employers) or focusing on underserved niches (e.g. pediatric behavioral telehealth or virtual physical therapy) could be viable strategies to gain a foothold.
3. Regulatory Considerations
Launching a telehealth startup requires navigating a complex regulatory landscape that spans federal and state laws. Compliance is critical both for legal operation and for building trust with patients and partners. Key regulatory and legal considerations include:
Licensure & State Practice Laws: In the U.S., healthcare providers must be licensed in the state where the patient is located during the telehealth session. This state-by-state licensure requirement can be a barrier to scaling nationally. Some states have joined licensure compacts (e.g. the Interstate Medical Licensure Compact for physicians, PSYPACT for psychologists) that streamline obtaining multiple state licenses, but a startup must ensure its clinicians are appropriately licensed for each state of operation.
During the COVID-19 public health emergency, many states issued temporary waivers allowing cross-state practice; most of those have expired, so telehealth companies must now return to full compliance with state licensure rules or special telehealth registration programs.
Notably, a few states are exploring reciprocity agreements: for example, Maryland, Virginia, and DC signed an agreement in 2023 to mutually recognize medical licenses for telehealth, simplifying regional practice. Entrepreneurs should closely track such developments, obtain multi-state licenses for clinicians as needed, and have a plan for jurisdictions they cannot yet serve.
Telehealth Practice Standards: Aside from licensure, states have varying laws governing how telehealth may be practiced. Many states require an initial patient consent for telehealth or specific patient notifications. Standards for establishing a provider-patient relationship via telemedicine differ – generally, a live video (or even phone) encounter is sufficient to establish care, but a few states might not allow first visits to be via asynchronous text-only methods (except for certain services).
Prescribing via telehealth is regulated: providers usually must take an appropriate medical history, document the encounter like an in-person visit, and adhere to the standard of care. Telehealth providers should institute clinical protocols to ensure their virtual care meets the same quality as in-person (e.g. referring to in-person care when a physical exam is necessary). Malpractice insurance coverage for telehealth should also be secured, and providers need training on proper telehealth etiquette and documentation.
Controlled Substances Prescribing (Ryan Haight Act): One of the thorniest regulatory issues is the prescribing of controlled medications (e.g. opioids, ADHD stimulants, certain anxiety meds) via telehealth. The federal Ryan Haight Act traditionally required at least one in-person medical evaluation before a provider can prescribe controlled substances over telemedicine, with narrow exceptions.
This requirement was temporarily waived during the COVID-19 public health emergency, enabling telehealth companies (like online ADHD clinics) to prescribe controlled meds without prior in-person visits. As of 2024, the DEA’s telehealth waiver remains in effect (extended through December 31, 2024), and regulators are actively working on new rules. Without further extension or new regulations, tele-prescribing of controlled substances will face tightened rules after that date.
The DEA received tens of thousands of public comments pushing for permanent telehealth prescribing allowances. It’s anticipated that a balanced policy will emerge – for example, possibly requiring an in-person visit after 6 months of tele-prescribing or creating a special telemedicine prescribing registration. Startups in mental health (for ADHD, anxiety) or addiction (for buprenorphine) must keep abreast of these federal rules.
Notably, telehealth-based prescribing has drawn scrutiny: in 2022, the DOJ investigated companies like Cerebral for potential over-prescribing of stimulants, and in 2023 the FTC/DOJ jointly filed a complaint against Cerebral alleging pushy tactics to boost Adderall prescriptions. Regulators clearly want to prevent “pill-mill” behavior via telehealth. Thus, a telehealth startup should enforce strict prescribing guidelines, especially for controlled drugs, to remain compliant and avoid enforcement action.
Reimbursement & Insurance Regulations: Telehealth coverage and payment have improved markedly, but still vary by payer and state. Medicare (federal insurance for seniors) has, on a temporary basis, expanded coverage for telehealth nationwide. Thanks to recent legislation, Medicare will continue paying for telehealth for all geographic areas and allowing the patient’s home as an originating site through at least March 31, 2025. Additionally, Medicare no longer requires an in-person visit within 6 months for mental health telehealth services until 2025 (this in-person mandate is postponed).
These extensions give telehealth companies a continued ability to serve Medicare patients (e.g. for therapy, primary care) and get reimbursed. Medicaid (state insurance for low-income individuals) policies vary, but all 50 states and DC now cover live video telehealth in Medicaid, and 42 states cover remote patient monitoring as well. Private insurers are often required by state law to cover telehealth. As of 2023, over 25 states have enacted payment parity laws – meaning insurers must reimburse telehealth visits at the same rate as in-person visits.
About 21 states made parity permanent, while a few others have conditional or partial parity (e.g. parity only for mental health services). Startups should research the specific telehealth parity and coverage laws in their target states. In parity states, revenue models can rely more on insurance reimbursement. In non-parity states, telehealth might be covered but potentially at lower rates or with more restrictions (for example, some insurers may only cover telehealth provided by their contracted vendors).
It’s also important to know if a state allows audio-only telehealth for certain services – many do for mental health, expanding access to patients without broadband or smartphones. Overall, the regulatory trend is toward greater telehealth coverage normalization, but startups must navigate a patchwork of policies in the interim. Working with regulatory counsel or using resources like the Center for Connected Health Policy’s state law tracker is advisable.
Privacy & Security (HIPAA Compliance): Telehealth companies handle sensitive Protected Health Information (PHI) and thus are fully subject to HIPAA (Health Insurance Portability and Accountability Act) regulations and state privacy laws. The startup must ensure its technology and processes protect patient privacy. This includes using HIPAA-compliant platforms for video and messaging (with end-to-end encryption), secure storage of medical records, and proper authentication for users.
During the COVID emergency, regulators exercised “enforcement discretion” allowing non-HIPAA-compliant tools (like ordinary Zoom or FaceTime) – but a professional telehealth startup should not rely on that. By launch, one should conduct a thorough security risk assessment and implement safeguards: unique user IDs for providers, audit logs of system access, training staff on privacy procedures, and signing Business Associate Agreements (BAAs) with any vendors who might handle PHI.
Cybersecurity is paramount; the HHS Office for Civil Rights has penalized companies for telehealth-related breaches, so encryption and regular security audits are a must. Given the rise of telehealth, there’s also rising attention on telehealth fraud and abuse – the DOJ and HHS OIG have ramped up investigations into fraudulent telemedicine schemes (e.g. doctors billing for sham visits or selling unnecessary DME via telehealth). A compliant startup should institute robust patient verification, accurate coding/billing practices, and avoid any incentive structures that could be construed as kickbacks for referrals.
Other Legal Considerations: Telehealth startups must comply with prescribing regulations such as e-prescribing requirements and pharmacy laws (many use e-prescribing systems that automatically check for state prescription drug monitoring program requirements). If offering services nationwide, be mindful of states’ online prescribing laws – e.g. some states explicitly ban prescribing solely based on an online questionnaire without a live encounter.
Informed consent for treatment should be obtained consistent with any telehealth-specific mandates. Additionally, if the model uses a subscription payment from patients, one must ensure it isn’t deemed an unlicensed insurance plan or pre-paid health plan – typically, charging a flat fee for unlimited visits can raise “insurance risk” questions (whereas charging per visit or offering subscription only for non-clinical wellness services is safer).
Many telehealth providers have navigated this by structuring as direct care agreements explicitly not covering unpredictable costs, or obtaining limited Knox-Keene type licenses when in California, for example. Finally, advertising and telemarketing for telehealth should follow FTC truth-in-advertising rules and TCPA (if doing text message outreach). As telehealth is healthcare, claims about outcomes must be substantiated.
In summary, the regulatory environment for telehealth is steadily improving (with expanded reimbursement and looser geographic restrictions), but it remains complex. A successful telehealth startup must build compliance into its DNA: enabling multi-state practice, ensuring HIPAA compliance, following proper prescribing protocols, and keeping up with evolving laws (such as new DEA rules or state telehealth legislation). Consultation with legal experts and using established telehealth guidelines (from organizations like ATA – American Telemedicine Association) are prudent steps to mitigate regulatory risk while scaling.
4. Investment & Revenue Models
Investment Landscape: Telehealth has been a hot sector for venture capital and corporate investment, especially following the pandemic. The promise of transforming healthcare delivery and the strong growth metrics have attracted billions in funding. In 2020-2021, digital health (including telehealth) startups saw record-breaking investment. U.S. digital health funding reached $29–38 billion in 2021, roughly double the 2020 level.
Virtual care companies were standout beneficiaries. Notably, startups offering mental health services led all categories – in 2021, mental health tech companies raised $5.1 billion, far more than any other clinical focus, signaling investor optimism in tele-mental health. Telehealth companies achieved lofty valuations: Teladoc’s market cap peaked above $30 billion after its 2020 merger with Livongo, and American Well went public in 2020 raising $742 million.
There have also been high-profile M&A moves – beyond Teladoc–Livongo, the Amazon–One Medical $3.9B acquisition in 2023 exemplifies how strategic buyers value telehealth capabilities. Another example: Cigna’s Evernorth unit acquired MDLive (terms undisclosed, but MDLive was valued around $1 billion). This influx of capital has spurred intense competition but also provides opportunities for new startups to secure funding if they have a compelling model.
However, the funding climate in 2022–2023 has become somewhat more measured (after the 2021 peak, digital health funding eased). Investors are now watching telehealth companies for sustainable unit economics and paths to profitability, not just growth. For a new telehealth startup, likely sources of capital include venture capital firms specializing in healthtech, corporate venture arms of insurers or health systems, digital health accelerators, or even strategic partnerships (e.g. a regional hospital network investing in a telehealth platform to extend its reach).
Demonstrating strong patient engagement, a clear regulatory compliance strategy, and potential for scalable contracts (with employers, payers, etc.) can attract these investors. Many telehealth startups in mental health and primary care have raised seed and Series A rounds in the $3–10 million range to build out technology and obtain initial patients/contracts, then larger Series B/C once they prove traction.
Revenue Models: Telehealth companies employ various monetization strategies, often tailored to their target market (consumer vs enterprise). Common revenue models include:
Fee-for-Service (Per-Visit Fees): The simplest model – patients (or their insurer) pay for each telehealth visit. For instance, a direct-to-consumer urgent care telehealth service might charge ~$79 per visit (or an insurance co-pay). Teladoc offers one-off visits to consumers without a subscription for around $75–$90, and many others have similar pricing. If the patient has insurance coverage for the visit, the provider bills the insurer (using standard CPT codes for telehealth) and collects any patient co-pay. This model is straightforward and mirrors in-person fee-for-service, but it requires consistent visit volume to drive revenue. It’s commonly used by urgent care and specialty consult services.
Subscription / Membership Model: This is increasingly popular, especially for virtual primary care and mental health offerings. Patients (or employers) pay a flat monthly or annual fee that covers a bundle of telehealth services. For example, a direct primary care telehealth startup might charge patients $30 per month for unlimited virtual visits and chat access to a doctor.
A variation is an unlimited therapy subscription (e.g. BetterHelp charges users a weekly or monthly rate (~$60–90/week billed monthly) for unlimited messaging and weekly live therapy sessions). Subscription models provide a steady recurring revenue stream and lower the barrier for patients to seek care (since incremental visits have no additional cost).
According to industry examples, telehealth subscriptions can range from limited plans (e.g. $49/month for up to two visits) to premium unlimited plans (e.g. $100/month for unlimited visits). For providers, this model incentivizes proactive care and allows cost sharing across a population, but it must be priced carefully to avoid regulatory issues of being deemed insurance. Some startups get around this by labeling fees as membership for access and still billing insurance for visits – or by structuring it as an employer-covered benefit.
B2B2C Access Fees (Per Member Per Month): Many enterprise-focused telehealth companies make money by contracting with organizations. In this model, an employer or health plan pays the telehealth vendor a flat fee per eligible member per month (PMPM) to provide services to that population. Teladoc, for instance, has major insurer clients and charges a PMPM (could be a few dollars or less) to cover a health plan’s members, who can then use Teladoc’s services (Teladoc also often gets a fee each time a member actually uses the service).
This model distributes cost across a large member base. Employers might also pay a yearly fee per employee for a telehealth package as part of benefits. The PMPM model was a significant revenue source for Teladoc (contributing the majority of its revenue) and for others like Amwell and MDLive via insurers.
It provides predictable revenue and incentivizes the telehealth provider to drive utilization to justify its value. For startups, landing a few enterprise contracts can rapidly scale revenue and user base, though sales cycles can be long and integration needs high.
Insurance Reimbursement: For telehealth providers that operate like a virtual clinic (e.g. a tele-psychiatry group or teledermatology service), billing insurance for each encounter is common. Here, revenue comes from insurer reimbursements. The Affordable Care Act’s parity rules for mental health, plus state parity laws, have made insurers more willing to pay for telehealth.
Startups focusing on covered services (like therapy or medical specialist consults) can credential their providers with insurance networks and bill just like an in-person practice. This can be a sustainable model if the startup can manage the administrative overhead of insurance billing. It also makes services more affordable to patients (just a co-pay). The downside is dependency on insurance reimbursement rates and policies – if an insurer changes telehealth coverage, it can impact revenue.
Pharmacy and Ancillary Sales: Companies in spaces like men’s/women’s health or dermatology often derive revenue both from the consultation and the product prescribed. For example, Hims & Hers might charge a low doctor consultation fee, but then generate revenue by dispensing the medication (like hair loss treatments or birth control) through its mail-order pharmacy. Similarly, telehealth weight loss programs might include prescription fulfillment or supplements for sale. This “telehealth + pharmacy” model can increase customer lifetime value.
Ro (Roman) follows this approach, essentially using telehealth visits to onboard patients to its recurring medication subscriptions (for ED meds, etc.). Startups must ensure pharmacy fulfillment is done via licensed channels and that any physician incentives are structured to avoid conflict of interest (typically the prescribing provider is separate from the pharmacy operations). But vertically integrating the prescription or offering at-home test kits, devices, etc., can add revenue streams beyond the visit itself.
Corporate/Institutional Licensing: Some telehealth tech startups generate revenue by selling or licensing their platform to providers. For example, a company might license a custom telehealth software or white-label app to a chain of clinics or a hospital system for an annual licensing fee.
This veers more into health IT (software-as-a-service) than providing clinical services. American Well historically had this model for health systems (charging implementation and subscription fees for its platform).
A startup offering a superior telehealth technology (say, an AI triage tool or an integrated telehealth/EHR module) might pursue this B2B software revenue model rather than direct patient care revenue. This could involve one-time setup fees and recurring license fees.
In practice, many telehealth startups use a hybrid of models. For instance, they might have some contracts with insurers/employers (PMPM), also see direct consumer pay patients (per visit or subscription), and bill insurance when possible. An example is Doctor On Demand, which initially was purely pay-per-visit consumer, but later partnered with UnitedHealthcare and others so that many users now pay just an insurance co-pay. Another example: PlushCare charges an annual membership fee (~$99) for unlimited messaging and easy booking, and bills insurance or a flat $99 per visit for the consultations. This combines membership and fee-for-service.
Unit Economics & Pricing: Entrepreneurs should model out their unit economics – e.g., revenue per visit vs. cost per visit (provider labor cost, platform cost). Telehealth can reduce overhead (no facilities cost per visit), but providers still must be paid, and acquisition of patients can be costly.
Some benchmarks: a general telehealth urgent care visit without insurance often prices around $50–$80; therapy sessions range $80–$150 (or subscription equivalents); an employer might pay $1–$5 PEPM (per employee per month) for unlimited telehealth in a benefits bundle. At scale, these can be profitable if utilization is optimized.
For example, if only 10% of members use the service in a month, a $2 PEPM yields $20 per user that month which might cover two visits. Telehealth providers also leverage advanced practice providers (NPs, PAs) and therapists who often have slightly lower hourly rates than physicians, to control costs while maintaining quality for appropriate services.
Funding Sources: Besides venture capital, telehealth startups have benefited from targeted grant programs and government funding, especially those tied to rural healthcare access or mental health expansion. The CARES Act in 2020 and American Rescue Plan in 2021 allocated funds for telehealth infrastructure – some startups partnered with community clinics to utilize those.
There are also strategic partnerships as sources of capital: e.g., a large hospital system could invest in a startup in exchange for equity and deployment of the telehealth service across its network (giving the startup revenue and credibility). Given the bullish outlook on virtual care’s future, well-positioned startups can still attract significant funding – but they should be prepared to demonstrate how they will acquire users (patients or partners) and monetize effectively, not just accumulate users with no revenue plan.
In sum, telehealth businesses have flexibility in revenue generation: direct consumer fees, B2B contracts, insurance billing, and ancillary sales. The optimal model depends on the target market. A mental health app might go direct to consumer with subscriptions, whereas a virtual primary care service might sell to employers and bill insurance.
Importantly, patient willingness to pay is generally tied to convenience and necessity – surveys show patients value telehealth for avoiding travel and time off work, and many would pay out-of-pocket up to a point for that convenience (though uptake is highest when services are covered by their health plans). An entrepreneur should align the pricing model with the value proposition offered and ensure it’s competitive with other options in the market.
5. Technology Stack
Launching a telehealth platform requires a robust, secure, and user-friendly technology infrastructure. Core components of the telehealth tech stack include:
Virtual Consultation Platform: At the heart is the software enabling real-time consultations. This typically involves HD video conferencing capability, plus support for audio calls and text chat. The platform should work across devices (web browsers, iOS/Android apps) to let patients connect via smartphone or computer.
Many startups leverage existing frameworks (e.g. WebRTC for video) or integrate solutions from providers like Twilio or Vonage for video calls. Others might customize open-source telehealth modules.
Key features are waiting room management, the ability to invite multiple participants (for interpreters or family members), screen sharing (for medical images), and perhaps virtual backgrounds to maintain a professional appearance. Given the rise of remote care, even mainstream tools like Zoom now offer healthcare editions with HIPAA compliance, but specialized telehealth platforms include clinical workflow features beyond just video.
Scheduling & Workflow System: A telehealth service needs a scheduling system for booking appointments (unless it’s purely on-demand). This includes patient self-scheduling interfaces, calendar integrations for providers, and automated reminders (SMS/email) with secure links to join sessions.
For on-demand urgent care, a triage queue system is needed to assign the next available provider. For scheduled primary care or therapy, allowing patients to pick times and providers (or be matched) is crucial. Workflows should accommodate time zone differences and handle rescheduling or cancellations easily.
Electronic Health Records (EHR) & Clinical Documentation: Clinicians require a way to document telehealth encounters. Some startups build a lightweight EMR into their platform, while others integrate with existing EHRs. At minimum, the platform should record patient medical histories, allow the provider to write consult notes, and store these securely as part of the patient record.
Integration with EHR is a strong advantage if targeting enterprise clients – e.g., Amwell’s platform integrates with hospital EHRs to automatically populate telehealth visit documentation into the patient’s chart. For a new startup, initially a standalone EHR module might suffice, but offering continuity (patients accessing visit summaries, sharing records with their other doctors) is important for quality of care. Interoperability standards like FHIR can be used to exchange data with other systems.
E-Prescribing and Pharmacy Integration: The tech stack should include an e-prescribing system (eRX) so providers can send prescriptions electronically to pharmacies. This typically involves integrating with networks like Surescripts. For workflows like sending an antibiotic to the patient’s local pharmacy or mailing a prescription, the provider needs seamless eRX tools within the telehealth interface.
If the startup fulfills medications (like Hims does), then a pharmacy module and inventory system are also needed. E-prescribing must account for controlled substances (EPCS – Electronic Prescribing of Controlled Substances – requiring additional provider authentication). Many telehealth platforms partner with third-party e-prescribing vendors rather than building from scratch due to the heavy compliance burden.
Payment and Billing Systems: If patients are paying directly, a payment gateway (credit card processing, possibly integration with HSA/FSA cards) is required in the app. For insurance billing, the system should capture the necessary info (insurance details, ICD/CPT codes) and possibly integrate with clearinghouses to submit claims.
Some startups opt to outsource revenue cycle management initially, but the platform should at least generate encounter reports for billing. If using a subscription model, a recurring billing system is needed to manage subscriptions, free trials, cancellations, etc. Modern tech stacks use providers like Stripe for payments, which can handle subscriptions and one-time charges with relative ease.
User Applications (Frontend): Both patients and providers need user-friendly interfaces. For patients, the UI should make it extremely easy to sign up, onboard (enter medical info), and start a visit. This includes identity verification steps, consent forms, and guiding less tech-savvy users. The design must be mobile-responsive and tested for different devices and bandwidth conditions (e.g. gracefully degrade to audio if video fails).
Providers need a dashboard that shows their schedule or on-demand queue, provides quick access to patient information, and has one-click start for video sessions. During the consult, providers benefit from features like note-taking area, templates for common assessments, the ability to push patient education materials or resource links, and perhaps built-in clinical decision support. After visits, the system should enable sending a summary or instructions to the patient through a secure message or email.
AI and Automation: To enhance efficiency, many telehealth platforms incorporate AI-driven features. One common tool is an AI symptom checker or triage bot that patients might use to input symptoms before the visit. These tools (e.g. Clearstep, Infermedica) ask patients a series of questions and provide a preliminary triage or suggested diagnoses. When integrated, they can help route the patient to the right kind of provider or indicate if an issue truly needs in-person care. AI triage can improve throughput and patient education, although it shouldn’t override clinician judgment.
Another area is using AI assistants for documentation – for example, some telehealth providers use AI to transcribe and summarize visits for the record, reducing clinicians’ administrative burden. Chatbots can also handle routine follow-ups (“How are you feeling after starting the medicine?”) and escalate to a provider if needed.
In mental health, AI chatbots (like Woebot or Wysa) can provide supplemental cognitive behavioral therapy exercises, though typically as an adjunct to human therapists. A forward-looking telehealth startup might leverage AI in these ways to stand out (subject to regulatory approval for any AI that constitutes medical advice). Importantly, any AI integration must be thoroughly tested to avoid errors in clinical context.
Data Analytics & Reporting: The platform should collect usage data and health outcomes data (while respecting privacy) to allow analysis of performance. For example, tracking average wait times, patient satisfaction scores, clinical quality metrics, etc. Having a reporting dashboard is useful both internally and for demonstrating value to clients (e.g. an employer might want to see quarterly utilization stats and estimated savings from telehealth diversions of ER visits). In primary care, integration with population health analytics can help manage chronic patients (e.g. flag if a diabetic patient hasn’t had a foot exam, prompting a tele-visit to address gaps).
Scalability & Reliability: Telehealth usage can spike (for instance, during a COVID wave or flu season, or even just peak hours in the evening). The tech stack should be built on scalable cloud infrastructure (AWS, Azure, etc.) so it can handle surges in concurrent video sessions. Uptime is critical – a significant outage means patients not getting care.
Monitoring tools are needed to track system health (server loads, video quality metrics). Performance optimization is also key; even slight lag or poor video quality can tarnish the user experience. Ensuring a baseline bandwidth adaptability (the system adjusting video resolution based on the user’s connection) will help minimize call drops.
In one case, the U.S. Department of Veterans Affairs telehealth program noted that real-time monitoring of their telehealth systems helped them prevent multiple potential system failures in the first month. Startups should similarly invest in devops and testing. Support for multiple browsers, an easy-to-use app, and contingency for switching to phone if video fails should be in place to handle tech issues.
Security & Compliance Infrastructure: As mentioned under regulations, data security is non-negotiable. The tech stack must incorporate encryption for data at rest and in transit (TLS for data transfer, encrypted databases for PHI). Role-based access control ensures only authorized staff see sensitive info. Regular penetration testing and vulnerability assessments are needed.
Many startups use reputable cloud services that have in-built compliance (for example, using AWS’s HIPAA-eligible services and storing data in the U.S.). Access logging and audit trails are important – every access to patient records should be logged, which helps with HIPAA auditing.
Two-factor authentication for providers (and even for patients, especially when accessing test results or sensitive data) is recommended to secure accounts (currently only ~16% of healthcare orgs use two-factor auth, indicating room for improvement in security practices). The platform should also facilitate BAA agreements with any integrated partners (for example, if using an external video service or cloud storage, those vendors must sign BAAs to comply with HIPAA). From a technology perspective, implementing these security features early on will save headache later – building privacy by design.
Integration with Devices & External Systems: Depending on the scope, a telehealth startup might need to integrate with remote patient monitoring (RPM) devices or wearables, especially for primary care and chronic disease management. For instance, connecting a Bluetooth blood pressure cuff or glucometer to feed readings into the telehealth app can enrich the virtual visit experience.
Platforms might use device integration frameworks or partner APIs (Apple Health, Google Fit, or specific RPM platforms like Validic) to pull in patient data. This can differentiate a primary care telehealth offering by enabling data-driven coaching and timely interventions. Similarly, integration with labs (so that a telehealth doctor can order a lab test electronically to LabCorp/Quest and receive results) is important for comprehensive care. Many telehealth providers now have “order to lab” and “order to radiology” capabilities through interoperability networks, which allow them to coordinate tests and follow-ups like an in-person clinic.
In essence, a telehealth startup’s technology stack is akin to building a virtual clinic infrastructure from end to end – from the waiting room (app/scheduling) to the exam room (video consult) to the back-office (documentation, prescribing, billing) – all online. Utilizing modern cloud services and existing APIs can accelerate development (for example, using Stripe for payments, Vonage/TokBox for video, Redox or FHIR API for EHR integration). The challenge and opportunity lie in stitching these components together into a seamless experience.
User experience (UX) is king: patients should find it simple and reassuring; providers should find it efficient and not clunky. Companies that excel in UX (like ease of use akin to a consumer app) often stand out – for instance, many users praise teletherapy apps for making it easier to consistently attend sessions than in-person therapy.
Cybersecurity must undergird everything – healthcare data breaches are costly and damaging to reputation. Establishing a strong compliance and IT security framework from day one (perhaps obtaining HITRUST or SOC2 certification as the company grows) will be important when dealing with enterprise clients. Overall, technology is both an enabler and a differentiator in telehealth. A well-built platform can scale rapidly and accommodate new features (AI, integrations) as the startup evolves, whereas a poorly designed one can hinder provider adoption or patient retention. Thus, investing in a solid tech foundation is a critical success factor for a telehealth venture.
6. Consumer Trends & Social Sentiment
Telehealth’s rapid expansion has been shaped by consumer attitudes – overall sentiment is quite positive, with patients appreciating the convenience and accessibility, though some challenges and preferences vary by demographic.
Understanding consumer trends and feedback (including what people say on social media) helps a startup fine-tune its service to meet patient expectations.
Patient Satisfaction & Preferences: Multiple surveys indicate that patients who have used telehealth are largely satisfied. A national survey in early 2023 found 86% of patients were satisfied with their most recent telehealth visit. Major reasons patients cite for liking telehealth are convenience (not having to travel), time savings, and quick access to care. In the J.D. Power 2023 U.S. Telehealth Satisfaction Study, the top reasons patients gave for using telehealth were: 65% – convenience, 46% – faster access to care, and 30% – a condition that telehealth can manage (avoiding an office visit).
Many Americans have busy schedules or live far from providers, so telehealth can prevent them from missing work or arranging childcare – in the Hims & Hers survey, 68% of telehealth users said it kept them from missing work time, and 61% said telehealth prevented them from delaying or skipping care they would have put off if they had to go in-person.
Patients also increasingly view telehealth as part of normal healthcare. A vast 84% of Americans believe telehealth will remain a regular part of healthcare in the future. Rather than an emergency measure, it’s now seen as an option for routine care when appropriate. In fact, telehealth has become so mainstream that certain types of appointments (like therapy sessions or minor illness consults) are preferred by many patients to be virtual. A recent Harris Poll found 1 in 5 adults switched providers to ones offering telehealth in order to maintain virtual access – indicating how important it can be in provider choice.
That said, satisfaction depends on a smooth experience. The J.D. Power study noted overall consumer satisfaction (on a 1000-point scale) for direct-to-consumer telehealth services was 730, and for payer-provided telehealth was 708 – a decent but not outstanding score, suggesting room for improvement. The study highlighted that technology issues are a top driver of dissatisfaction: about 25% of people reported trouble with internet connectivity or audio/video quality, and another 25% cited limited services available via telehealth as a frustration.
Data security concerns were mentioned by 15% – some patients worry about privacy of their medical info online. Notably, 65% of telehealth users encountered at least one barrier or issue during their visit. This shows that while people like telehealth, they do notice its pain points (glitches, not being able to get certain tests/procedures done virtually, etc.). For a startup, this means focusing on reliability and clearly communicating what can/can’t be done via telehealth will be key to keeping satisfaction high.
Generational Differences: Social sentiment varies by age. Younger consumers (Millennials and Gen Z) tend to be the most enthusiastic telehealth adopters. J.D. Power reported that satisfaction scores among Gen Y/Z were significantly higher (~714) than among Baby Boomers (around 671). Younger patients are generally more comfortable with digital technology and less likely to have longstanding relationships with traditional doctors, so they embrace the ease of app-based care. They also use social media to share telehealth experiences, often positively.
Older patients, while having adopted telehealth out of necessity during COVID, sometimes find the technology interfaces challenging – difficulties with app navigation or setup can lower their satisfaction. The biggest gap in satisfaction was related to digital interface ease-of-use; older adults who found the telehealth platform “not easy to use” had much lower overall satisfaction. Nevertheless, many seniors appreciate telehealth for certain uses (e.g. quick check-ins or specialist consults that save them a long trip). As telehealth platforms become more user-friendly and family members assist, acceptance among older demographics is improving.
Social Media Discourse: On platforms like Twitter and LinkedIn, telehealth is frequently discussed in the context of healthcare innovation, policy updates, and success stories.
Twitter often features news articles about telehealth expansion or threads from healthcare professionals about their telehealth experiences. Reddit offers a more unfiltered window into patient experiences and peer discussions. A research study comparing telehealth discussions on Reddit vs. Twitter found that Reddit conversations were heavily centered on using telehealth for therapy and counseling, with users sharing personal stories and seeking advice (for example, asking if online therapy works well, or how to find an affordable tele-psychologist).
Reddit’s anonymity allows patients to openly discuss sensitive health issues – many posts over the last few years talk about how telehealth enabled them to finally see a therapist or manage anxiety when in-person was too intimidating. Meanwhile, Twitter chatter skews toward telehealth news, product announcements, and industry commentary.
For instance, during the pandemic you’d see tweets like “My telehealth appointment was so convenient – I didn’t have to wait at all!” or conversely “Telehealth is great, but it can’t set a broken bone – nearly had to go in anyway.” Healthcare professionals on Twitter also advocate for continued telehealth flexibilities (one could see tweets rallying support for extending telehealth reimbursement or the DEA waiver, often with hashtags like #TelehealthIsHereToStay).
On LinkedIn, the sentiment is largely optimistic – professionals post about telehealth achievements (e.g. “Our clinic hit 10,000 telehealth visits!”) and startups share milestones. It’s seen as a growth area and a solution for access problems. This aligns with public opinion data: a vast majority of Americans agree that telehealth improves access to care, especially in underserved or rural areas. In a HIMSS survey, 73% of respondents viewed telehealth positively for managing health.
Consumer Concerns: Despite overall positive sentiment, consumers have some concerns. One is whether telehealth can adequately address their issue – for example, some Reddit users ask if a telehealth doctor can diagnose certain rashes accurately over video, or express doubt about tele-dentistry.
This reflects a general understanding that telehealth has limits; many consumers compartmentalize which problems are “telehealth appropriate” and which need hands-on care. According to a survey by the American Medical Association, patients are most comfortable using telehealth for routine follow-ups, minor illnesses, and mental health, but prefer in-person for serious diagnoses, physical exams, and procedures. Thus, startups should set appropriate expectations and possibly assist patients in transitioning to in-person care when needed (some services coordinate referrals).
Another common consumer question: continuity and quality. Patients want to know, if they use a telehealth service, will they see the same provider each time (for primary care or therapy, continuity builds trust)? Some lament that telehealth visits with random doctors feel one-off and transactional. Telehealth companies have responded by offering options like choosing a primary virtual provider. Emphasizing quality of providers (credentials, training in webside manner) in marketing can help reassure users.
Privacy concerns are occasionally voiced – some patients worry if their video calls are recorded or if their data is sold. Given incidents like the controversy where some teletherapy apps were found to be sharing user data for advertising, users on platforms like Twitter have become more vocal about demanding privacy. A startup should be transparent about privacy protections to build trust, perhaps stating clearly “we do not record your sessions” or “your data is never sold.”
Telehealth and Mental Health Sentiment: It’s worth noting that public sentiment is especially favorable for tele-mental health. The American Psychological Association noted that patients who might never have sought help in person have embraced online therapy, and dropout rates have in some cases lowered. A KFF survey cited by a regulatory expert found 40% of mental health visits were via telehealth during 2020’s peak, and even in 2022, around 36% of mental health care continued virtually. Many social media posts reflect gratitude for virtual therapy’s privacy (“I can talk to my therapist from my bedroom instead of an office waiting room”) and convenience (“No commute, I can fit sessions into my workday”). Telehealth has somewhat normalized attending therapy, as indicated by numerous TikTok and Instagram posts where people mention “Zoom therapy” as part of self-care routines.
On the flip side, a few have mentioned “Zoom fatigue” – spending all day on video including medical visits can be tiring, which might be a minor deterrent for some. Also, certain support groups on Facebook/Reddit highlight that telehealth was a lifesaver during the pandemic but as offices open, some providers are pushing to return in-person, which patients resist. This has even led to petitions urging providers and policymakers to keep telehealth options permanent.
Public Endorsement & Word of Mouth: Telehealth’s word-of-mouth appears to be strong. In J.D. Power’s study, 74% of patients who had an easy telehealth experience said they would “definitely” use it again. Many users become promoters: someone who successfully got a quick prescription for their sinus infection via telehealth might tell family and friends about it on social media or in person. Likewise, communities (like parenting forums) often recommend telehealth for things like “my child has pinkeye – we did a telehealth visit and got drops in an hour, so much easier than urgent care.” This positive grassroots sentiment fuels further adoption.
For an entrepreneur, monitoring social media for feedback can be very insightful. People will quickly complain on Twitter if an app crashes or if wait times were long in a tele-queue, and conversely they’ll praise a particularly compassionate virtual doctor. Engaging with consumers (while protecting privacy) by addressing concerns or highlighting improvements can build goodwill.
In conclusion, consumer sentiment toward telehealth is largely favorable, centered on convenience, access, and time savings. High satisfaction rates and the expectation that virtual care will persist indicate a receptive market. The main tasks for a telehealth startup are to maintain high quality and ease of use – since technical frustrations and perceptions of lower quality are the main factors that temper enthusiasm. By listening to consumer feedback (from formal surveys and the candid voices on social platforms), telehealth providers can continuously refine their services.
The public now sees telehealth as an important part of the healthcare system, not just an emergency measure, which is a huge cultural shift from a few years ago. Capitalizing on this positive sentiment, while addressing the remaining pain points, will position a telehealth startup for success in winning consumer trust and loyalty.
The U.S. telehealth sector offers a fertile yet competitive ground for a new startup. The market is growing rapidly, fueled by strong consumer demand and supportive trends, particularly in mental health and on-demand primary/urgent care. To succeed, a telehealth venture must skillfully navigate the competitive landscape by differentiating its service offerings or target niche, and ensure full compliance with a dynamic regulatory environment (from multi-state licensing to patient privacy).
A sustainable business will likely blend multiple revenue streams – leveraging insurance reimbursements, employer contracts, or subscription models appropriate to its audience – to monetize the convenience and value of virtual care. Underpinning all of this is a need for a rock-solid technology platform that delivers a seamless, secure experience for both patients and providers, as user experience will directly impact adoption and satisfaction.
The societal embrace of telehealth is evident: patients appreciate its convenience and many now expect virtual options as part of standard care. As one survey respondent aptly put it, “Telehealth has made healthcare easier to access – I love that I can see my doctor from my couch and still get the help I need.”
By keeping a patient-centric focus – listening to consumer feedback, ensuring quality of care, and integrating technology that humanizes rather than hinders – a telehealth startup can build a trusted brand in this burgeoning industry. The opportunity is to not only ride the growth of telehealth but to shape the next evolution of how healthcare is delivered in the digital age. With thoughtful strategy and execution, a new entrant can position itself at the forefront of the “virtual-first” healthcare revolution and make care more accessible and equitable for countless Americans.
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