Has virtual healthcare lived up to its pandemic promises?
Five years post-pandemic, virtual healthcare has made strides in several areas, like mental health and chronic care, but struggled with engagement and proving clinical outcomes.
It has been five years since a once-in-a-century pandemic upended the U.S. healthcare system. With in-person care severely restricted amid COVID-19 waves, healthcare providers and payers had to pivot, pushing care out of traditional brick-and-mortar facilities. Virtual healthcare significantly benefited from this shift; however, the headwinds pushing virtual care utilization have died down as in-person care resumed. Going into 2025, one question looms large: has virtual healthcare lived up to its pandemic-era promises?
Numerous reports and surveys have charted the rise and fall of virtual healthcare relative to the pandemic's peak. Telehealth visit volumes dropped by 45.8% from 76.6 million visits in the second quarter of 2020 to 41.5 million visits in the fourth quarter of 2022, according to data from market research firm Trilliant Health.
Not only did telehealth use decrease overall, but a federal report revealed sharp declines across age, sex, race and residence, among other characteristics. For instance, 29.5% of Asian, 27.4% of Black and 26.7% of Hispanic adults reported using telehealth in 2022, down from 33% of Asian, 33.1% of Black and 32.8% of Hispanic adults in 2021.
Following these declines, investment in digital health technologies dropped. Investors and digital health adopters became increasingly interested in proven outcomes rather than the potential of a new digital health tool.
"We started to see this real sort of slowdown in investment funding and a real growing concern among payers and providers about whether these solutions were performing up to their potential," said Caroline Pearson, executive director of the Peterson Health Technology Institute (PHTI). "And we heard a lot of folks really beginning to doubt whether these solutions were clinically effective, how well they were really engaging and sustaining engagement with users and how much they were costing. So, by the time we get to 2024, there's almost a skepticism or pullback in the market that requires, I think, a new approach."
To determine this new approach, healthcare stakeholders must examine the virtual healthcare market closely and understand where these tools have succeeded and where they have not.
Virtual healthcare flourished in some areas
Though virtual healthcare has not lived up to all its promises, it has transformed care delivery in some areas.
Mental and behavioral healthcare
Mental and behavioral healthcare has benefited greatly from the unprecedented rise in telehealth adoption and use.
"We see that a large fraction of our mental health ... just roughly half of visits in the United States are provided via video or phone visit," said Ateev Mehrotra, M.D., M.P.H., chair of the department of health services, policy and practice at the Brown University School of Public Health. "It has become very standard practice to do so. We also have seen at the extremes roughly 15% of mental health clinicians have gone virtual-only, and they have just given up their physical practices."
We see that a large fraction of our mental health ... just roughly half of visits in the United States are provided via video or phone visit. It has become very standard practice to do so.
Ateev Mehrotra, M.D., MPHChair of the department of health services, policy and practice, Brown University School of Public Health
The utilization of telebehavioral health has remained high even as telehealth use overall fell. Amid declines in telehealth visit volumes, telebehavioral healthcare visits rose to 72.3% in the fourth quarter of 2023. Mental healthcare leaders have noted that telehealth has significantly expanded access to behavioral healthcare services, supported more comprehensive management of conditions and helped extend the behavioral healthcare workforce amid provider shortages.
Not only that, but telehealth also remains a popular tool for substance use disorder treatment, particularly for opioid use disorders, Mehrotra said.
RPM for chronic disease management
Remote patient monitoring (RPM) has proved effective at enhancing chronic disease management. A survey released last month showed that patients with chronic illnesses are more frequent telehealth users, and a majority of physicians believe that telehealth has improved the continuity of care for patients with chronic conditions.
Health system leaders echoed these findings. According to David Strickland, vice president of omnichannel and patient engagement, care delivery technology services at Kaiser Permanente, "Ongoing feedback on a patient's health status to the care team has led to superior outcomes and a better patient experience."
In particular, Kaiser Permanente's home-based cardiac rehabilitation program has significantly lowered rates of readmission and increased rates of program completion, he added.
Eve Cunningham, M.D., chief of virtual care and digital health at Providence, agreed with Strickland, adding that the health system's RPM programs have improved guideline-directed medical therapy, diabetes control and blood pressure control. RPM has also helped Providence reduce the total cost of care for these chronic conditions.
Digital health solutions for musculoskeletal care
Digital health tools addressing musculoskeletal (MSK) disorders that include high-quality virtual physical therapy have displayed significant potential in shifting PT out of brick-and-mortar environments to more convenient and accessible settings.
A 2024 PHTI report found that digital health solutions targeting MSK conditions improve pain and function outcomes. PHTI researchers conducted a systematic literature review of evidence for eight virtual MSK solutions in three categories: app-based exercise therapy with limited physical therapist intervention, physical therapist-guided solutions as an alternative to in-person care and solutions that supplement in-person PT with virtual care and are paid for as remote therapeutic monitoring.
They found that the virtual MSK solutions deliver clinically meaningful improvements in pain and function compared to people receiving usual care, which included physician visits and pain management but not PT.
"PT is very well proven [but] it is underutilized today," Pearson said. "And by making it more convenient and accessible, we've seen that it can really deliver high healthcare benefits or improved healthcare outcomes."
Virtual physician extenders and tech-enabled services
Virtual healthcare has helped health systems extend their workforce in various ways. For instance, Providence has partnered with an RPM provider with its own clinical team.
"They have the clinicians who do the remote patient monitoring service, and they provide the service and the technology, and they act as an extension to our primary care clinicians, and they help those primary care clinicians with better chronic disease management," Cunningham said. "So, it's a nice partnership of extending access and delivering care in a different way that's integrated into the care delivery system in a nice and seamless fashion. And we're starting to see more of those start to emerge."
She added that virtual healthcare models are helping address physician shortages in certain specialty areas or rural or underserved communities, where recruiting healthcare professionals has proved challenging.
"We are thinking strategically about areas where a large amount of the work can be done [virtually]," Cunningham noted.
Another area where virtual healthcare models are helping extend the clinical workforce is emergency medicine. Mehrotra highlighted the use of telehealth in the emergency department (ED) for patients with acute needs that require urgent attention, such as strokes or heart attacks. Emergency medicine physicians working onsite are increasingly using telehealth to consult with specialists to enhance clinical decision-making in the ED.
Virtual healthcare has also faltered -- but why?
Though virtual healthcare modalities have enhanced care in several clinical areas, not all efforts to digitize care delivery have been successful.
For instance, some of the most drastic drop-offs in telehealth use occurred among surgical and medical specialists. According to an American Medical Association (AMA) survey released in 2023, 83% of psychiatrists said they provided a video visit the week before the survey, compared to 45.3% of surgeons. Not only that, but Epic Research data also shows that in the third quarter of 2023, only 11% of infectious diseases, 10% of obstetrics, and 10% of transplant visits were occurring virtually.
"If you have an appointment with a … I don't know … ear, nose and throat or an otolaryngologist or if you have an appointment with an orthopedic surgeon, [or for] cancer care, you see very little telehealth," Mehrotra pointed out. "And there is also this aspect of, if you use it so rarely, you never use it because it's hard to create a system where one in 30 visits are via telehealth. You have to have a certain use rate to make it worthwhile."
It's really about having digital solutions fully integrated into care plans, not being sprinkled like pixie dust on top and hoping that they're going to make things better.
Caroline PearsonExecutive director, Peterson Health Technology Institute
This trend underscores that telehealth does not effectively address all clinical cases. Even digital health tools intended to supplement in-person care are often found lacking. An explosive report from PHTI released last year found that digital health tools targeting type 2 diabetes that use RPM and behavior and lifestyle modification approaches do not provide meaningful clinical benefits. Another PHTI revealed that digital health solutions based on blood pressure monitoring and behavior change approaches did not result in clinically meaningful improvements to BP.
Pearson stated that these failures to improve clinical metrics could stem from the fact that many digital health solutions on the market are not integrated into clinical care delivery in a meaningful way.
"It's really about having digital solutions fully integrated into care plans, not being sprinkled like pixie dust on top and hoping that they're going to make things better," she said.
Pearson further noted that digital health tools, particularly in the diabetes and hypertension spaces, must effectively spur behavior changes, which is difficult.
"Behavior change is really hard, and behavior change with an app and sort of virtual coach remains really hard," she said. "And so, I think the [tools] that are more integrated into clinical care have been performing better."
Effective technology integration is one challenge of virtual healthcare adoption. Another is managing the turbulent landscape of nascent markets like digital therapeutics. The digital therapeutics market has seen companies go from celebrated to bankrupt dangerously fast.
Pear Therapeutics is one such warning story. The company, which provided prescription software-based therapeutics for substance use disorder, opioid use disorder and chronic insomnia, had received Food and Drug Administration approval for all its products. But, in 2023, Pear Therapeutics voluntarily filed for protection under Chapter 11 of the U.S. Bankruptcy Code, planning to pursue a sale of the business or its assets. At the time, its CEO claimed insurance denials and market conditions drove the company to bankruptcy.
The issue of effective reimbursement models continues to complicate the adoption of virtual healthcare. According to Mehrotra, even positive developments like the CMS introducing new codes for mental health-focused digital therapeutics might not be enough to solve this problem.
"It isn't clear to me yet that it's just all about getting somebody to put a CPT code out there," he said. "It could be that we just need to think about a different model, which is [that] the clinician pays for it.... We don't pay a specific CPT code for an electronic health record. We just assume that the clinicians find it valuable, and they will incorporate [it]."
What's next, and how can providers prepare?
Despite the challenges of adopting and utilizing virtual healthcare solutions, the industry holds immense promise for the future.
For Cunningham, the most exciting virtual health trend in 2025 is advancements in virtual inpatient care models. Health systems are increasingly deploying telehealth tools and sensor-based devices to enable remote care within hospital walls.
"Virtual nursing is just exploding, I mean, that's going to become table stakes," she said. "And then on top of that, we're talking virtual pharmacy, virtual discharge support. So, there's a whole bunch of things, efficiencies, I think, that will be gained in the inpatient setting with having all the rooms wired up and being able to beam in different types of caregivers."
Virtual care advancements in the inpatient setting could also help with the rural hospital crisis in America. Mehrotra noted that telehealth and digital health models that enhance outcomes and reduce costs could be one way of supporting rural hospitals at risk of closure.
"If we just looked at numbers, [portal messages are] by far the most popular form of telehealth," Mehrotra said. "People are using it all over the country. Hundreds of millions of messages are going back and forth between clinicians and patients, and doctors understandably are overwhelmed. There was a lot of interest in whether AI could be used to make that job easier for a clinician -- [could] AI read the message from the patient, create a draft response, and then that would just make it easier for the clinician and just make them more efficient in responding?"
However, GenAI might need to evolve further before it can be integrated into virtual care modalities. Mehrotra noted that applying GenAI to portal messaging has not worked well so far. The technology must be further refined for use in portal messaging.
As virtual care technology continues to evolve in 2025, clinical evidence will be the factor that sets digital health developers apart in a highly competitive field.
"I think next year is really going to be about elevating the level of evidence and how companies are marketing themselves," Pearson said. "I think you're going to see companies leading with evidence instead of engagement stats, and I think you're going to see their purchasers asking much tougher questions about some of the marketing messages that are being put in front of them and really demanding evidence in order to win a contract."
Of course, the fate of the virtual healthcare industry depends on telehealth legislation, which is currently on shaky ground. Shortly before Christmas, Congress passed a year-end spending bill that extended pandemic-era telehealth flexibilities and the Acute Hospital Care at Home (AHCAH) waiver through March 2025. Though the extension alleviated the immediate risk of losing vital virtual care access, it has done little to quell concerns about continued investment in virtual care tools and models.
"It makes it very risky to some degree if you're making investments and building out all that infrastructure and then potentially not getting reimbursed or having to wait until the last minute," Cunningham said.
Amid this ongoing uncertainty, healthcare providers must make their virtual healthcare decisions carefully.
You can't boil the ocean, so you're going to need to focus. There's a bunch of stuff I would love to bring into the system. There are so many different opportunities, and we have limited resources. We have limited resources for integration. There's also innovation fatigue that can happen when you bring too many things in.
Eve Cunningham, M.D.Chief of virtual care and digital health, Providence
To start with, Pearson suggests that providers educate themselves about the various types of virtual care tools available in the market, which are accessible to patients through insurance and their patients' willingness to try new tools.
"Too often the communication about the use of digital health is really not happening in the exam room," Pearson said. "And I think the more that we can just understand that virtual care and digital care are part of regular care, the better the provider can do in terms of really using all the tools at their disposal."
Mehrotra echoed this sentiment, adding that providers must experiment with new technologies while keeping an eye out for potential care gaps. He said that clinicians cannot afford to sit out as the digital transformation of healthcare races on, but at the same time, they must maintain a healthy skepticism of the tools they implement, assessing virtual care tools and programs to identify potential harms and inefficiencies.
To achieve this balance of fostering experimentation while maintaining skepticism, Cunningham noted that health system leaders must be thoughtful and strategic about which virtual care tools and approaches they prioritize.
"You can't boil the ocean, so you're going to need to focus," she said. "There's a bunch of stuff I would love to bring into the system. There are so many different opportunities, and we have limited resources. We have limited resources for integration. There's also innovation fatigue that can happen when you bring too many things in."
Cunningham recommends that health system leaders develop processes to understand the clinical impact and return on investment of the tools they are considering. She also suggests that leaders identify the organization's top pain points and implement technology to alleviate those rather than trying to solve all the organization's problems simultaneously, resulting in a "perpetual pilot situation."
Numerous unknowns could reshape the virtual healthcare industry as we know it in 2025. However, it is apparent that virtual care delivery will remain an integral part of the healthcare system regardless of the new and ongoing hurdles.
"Integrated virtual care can reduce costs for patients and assure greater quality and safety," Strickland said. "Telehealth services help prevent delays in getting care, improving access for those in remote areas or who can't leave home. Half of our members who participate in a video visit report avoiding a costly and difficult trip to urgent care or the emergency room."
As healthcare stakeholders navigate the rapidly evolving virtual healthcare landscape, they must remain agile -- both open to new approaches and vigilant -- to weather the storms and reap the promised benefits of virtual healthcare.
Anuja Vaidya has covered the healthcare industry since 2012. She currently covers the virtual healthcare landscape, including telehealth, remote patient monitoring and digital therapeutics.
