How to start a telehealth business?

Archer's Blog - How to start a telehealth business?

We've put together a short overview of steps towards designing and launching a successful telemedicine business as the telehealth businesses are gaining momentum in the USA triggering changes in traditional healthcare systems. We're going to describe how to run a telemedicine startup company and explain its development costs.

Quick navigation

Lately, the healthcare industry has started using more technological advancements not only for research and treatment but also for doctor-patient interactions. Another factor fostering these changes is the adoption of regulations by the Government with regard to telehealth service reimbursements and the option to cross state lines for care.

According to Deloitte, federal and state policy is going to do more to support telehealth in value-based care models, since active leveraging of technology will increase consumer engagement and help a lot in dealing with disease prevention and chronic care management.

Let’s explore what you have to know to develop a telemedicine strategic plan.

New and updated laws on remote delivery of care

Legislation supporting the broad and effective adoption of telemedicine into the US healthcare system is lagging. However, over the past few years, things have been getting better. The National Law Review reveals that “31 states plus the District of Columbia have telehealth commercial insurance laws on the books.

Continued expansion in coverage and reimbursement means providers can enhance telemedicine offerings, both for the immediate cost savings and growing opportunities for revenue generation, to say nothing of patient quality and satisfaction”. Federal legislation that has already been adopted, such as the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which is aimed at aligning access and quality of care to reimbursements.

A Managed Healthcare Executive review also reports the progress of telehealth legislative initiatives. For example, the TELE-MED Act (S. 1778 and H.R. 3081) is also aimed at dealing with the issue of access, allowing Medicare physicians to treat Medicare patients in all 50 states with a single medical license.

The Medicare Telehealth Parity Act (H.R. 2948) is designed to expand telehealth services by removing geographic barriers and expanding the list of telehealth-eligible providers. The Telehealth Enhancement Act (H.R. 2066) will promote not only Medicare but also other federal telecommunications programs through expanded telemedicine coverage.

Medicaid policies also include those with some type of reimbursement for telehealth. According to the National Conference of State Legislatures, in 2016 some form of Medicaid reimbursement for telehealth services was provided in 48 states and the District of Columbia.

So the legal environment looks quite promising at enabling telehealth services to provision where it’s most needed.

Goals of the telemedicine

Healthcare providers and their workforce is overstretched in many states. Telehealth has the potential to address these healthcare workforce issues and to achieve three major goals that are before the whole healthcare system:

  • to provide better healthcare,
  • to improve health outcomes,
  • and to lower costs.

The American Telemedicine Association says that more than half of U.S. hospitals now use some form of telemedicine. And healthcare professionals interested in telehealth practice are given the possibility to view and apply to open position listings from telehealth service providers, for example, Nomad Health launched an online freelance marketplace for healthcare professional staffing.






Telemedicine solutions available on the market

The telehealth market consists of such components:

  • as services,
  • software,
  • and hardware.

In terms of end-users, this market can be segmented into:

  • providers,
  • payers,
  • patients,
  • and other end users.

According to MedGadget estimates, the US telemedicine market is poised to reach $6.77 billion in 2020, growing at a CAGR of 6.3% by 2020.

The IBIS World market research report lists several areas of activity in the telehealth domain:

  • Providing communication between patients and healthcare providers
  • Providing provider-to-provider communication
  • Providing video conferencing services
  • Providing two-way remote patient monitoring
  • Transmitting digital medical imaging information
  • Transmitting digital medical data
  • Providing healthcare education communications

Which telemedicine business model is better?

To develop a telemedicine project plan you also have to define a business model that will be economically sustainable and successfully address challenges. There is no one-size-fits-all approach for any telemedicine company and you have to tailor your offering to fit the needs of the community or market segment you want to service and comply with state and federal laws.

The business model can pursue various motivations for the business, for example, AMD Global Telemedicine lists three possible models a telemedicine business can choose from:

  • Access to the Care Model

This model deals with care delivery “in remote locations or to populations that do not have care available to them due to geography or limited resources”.

  • Cost Savings Model

The goal of this model is to provide alternative care delivery methods to reduce costs (by eliminating transportation costs and sharing resources between hospitals).

  • Access to the Market Model

This model allows expanding the market covered by a healthcare provider and delivering services and expertise over a greater distance.

The Telemedicine Magazine defines three non-traditional, yet successful, telemedicine business models:

  • Institution-to-institution model

An academic medical center can offer the expertise of its specialists to patients outside its location. This medical center can sign contracts with rural hospitals or other institutions that need on-demand specialty expertise. Compensation methodologies can include a monthly rate, a hybrid payment, a fee schedule menu of different specialist services, etc. This model can be built independently of an external FFS reimbursement.

  • Accountable Care Organizations (ACOs) providing telehealth services

Telemedicine technology companies and startups can provide ACOs with services adding quality and improving costs for the prerequisites needed for ACOs to receive Medicare incentive payments.

  • Offering care for employer workforces

A telemedicine provider can offer telemedicine-based care to the workforce of an employer through a combination of an on-site kiosk and an online app. The compensation approaches here can include a per-encounter fee, a base services rate combined with a reduced per-encounter fee, a fully capitated per employee per month payment, a shared savings fee model, etc.

9 blocks of successful telemedicine business model

According to the Review of Telemedicine Business Models, when considering your business model and telemedicine strategic plan you should clearly define 9 building blocks of your business model:

  1. Customer segments (those individuals or organizations who pay for your telemedicine service)
  2. Value proposition (both economic and social)
  3. Channels for value delivery (internet, telephone or both)
  4. Customer relationships (the ways to create a positive relationship between provider and customer)
  5. Revenue streams (where you will receive money from)
  6. Key resources (technology, software, infrastructure, human resources necessary for delivering value)
  7. Key activities (what you need to do to deliver value to your customers)
  8. Key partnerships (partners necessary to create and deliver value, for example, an outsourced IT company who will create apps for your services)
  9. Cost structure (all costs of your company to provide services, including telemedicine startup costs)

Telehealth implementation plan

Telehealth has huge potential to improve lives, alleviate personnel-related pressures, and extend medical services to underserved or unserved areas. It is a tool that offers benefits for customers (patients) and healthcare professionals and organizations. It is an effective way to enhance the patient experience and gain buy-in through better clinician input.

To make your telehealth business make money you should integrate it into a larger ecosystem using an implementation plan that will guide you through the whole process from the strategic plan to delivering value to the customer:

  1. Build a long-term financial plan and define the measurements to control the achievement of the planned goals.
  2. Create a work environment that is effective and convenient.
  3. The technology you use must be functional, but simple to use.
  4. Build your telemedicine services into standard care processes so they can be easily accepted by your employees and customers.
  5. Ensure effective training so your personnel can be fluent in providing services.
  6. Training should consist of several blocks, or layers to make it more comprehensive and effective.

Those layers should include training on:

  • Communication technology you use for service provisioning, including mobile apps
  • Clinical technology
  • Diagnostic device user training (both for sending and receiving data)
  • Workflow and protocols of care and procedures for use of devices
  • Documentation management
  • Troubleshooting and access to product and technical support

Your project plan must contain manageable milestones based on reasonable expectations. And you should take a balanced approach to the implementation of it. Don’t try to implement every possible service or feature of the telehealth app from the beginning.

Start with 10 or 20% of the anticipated volume and get everything working well and manageable. You can resolve the problems, test the protocols, make the necessary improvements, and launch the necessary capabilities before your service or app is implemented on a large scale.

Don’t forget about marketing. Effective marketing is very important. Start and finish the implementation of your program with it. Good marketing helps you understand the needs and wants of your potential customers, create a message that is appealing to your target customers, and get feedback from your patients and staff. All these will give you valuable insight into how your telehealth program is working and how you can make it better.

How to choose a reliable partner to launch a successful telemedicine practice?

To make your telehealth offering successful you must select a reliable technology partner:

  1. Decide what type of technology and software capabilities you need and look for an IT company experienced in this field.
  2. Don’t forget about the necessary certification (ISO and the like) and HIPAA compliance.
  3. The availability of technical support is also a must: define what support you may need, including technical support hours, communication options, and technical support costs.
  4. Be sure to consider how you will integrate your telemedicine services into your facility’s current practice and find out whether your IT partner can help you with it.

Cprime Studios has been working with healthcare IT for years and our portfolio includes several success stories of software that was developed for our clients in the healthcare domain.

Our experience in telehealth and mHealth, in particular, includes the development of the MDChat - an app designed by Mobile Health One. Inc. (New York), a national healthcare communications technology company that develops mobile, on-demand HIPAA-compliant systems that unify healthcare professionals within and between organizations by simplifying communications to accelerate, consolidate, and control information sharing.

The application is designed for healthcare professionals and offers them secure, point-to-point, real-time access to other healthcare professionals – physicians, nurses, support staff, and administrators – via any computer or mobile device.

Contact our team at for more information.