Verizon Communications (NYSE:VZ) just entered the telehealth market with its new Virtual Visits platform, which allows users to connect with medical professionals via smartphones, tablets, or PCs to address nonemergency issues such as a cough or a cold.
Virtual Visits combines several of the company's connectivity services with an unidentified third-party medical provider network. When a patient registers at Virtual Visits via a mobile app, the company verifies eligibility and co-pay information, then presents a patient's self-reported medical histories, symptoms, known allergies, and other information to the doctor.
After the co-pay is collected, the doctor initiates a video chat. If the state allows prescriptions to be administered via video conferencing, the doctor can then send an e-prescription via Surescripts to the patient's preferred pharmacy. The data collected from the visit is then encrypted over Verizon's HIPAA-compliant cloud, which requires clinicians to log on with two forms of authentication.
In other words, Virtual Visits is fairly similar to other telehealth platforms such as Google Helpouts, MDLive, and NowClinic.
Why is Verizon focusing on health care?
So why is Verizon, best known as a provider of telephone, broadband Internet, and TV services, interested in telehealth?
There are two main reasons. First, the U.S. telehealth market is expected to grow from $240 million in 2013 to $1.9 billion by 2018, according to research firm IHS. Second, it's a natural evolution for the company that is already connected through phone lines, Internet cables, and broadband TV. The next step could be connecting patients' bodies to the Internet. That's why Verizon has been increasing its investments in health care over the past two years.
At HIMSS13 in March 2013, Verizon unveiled a secure cloud messaging service for health-related data. The Secure Universal Message System, or SUMS, is designed to work as easily as email, allowing health-care providers to exchange clinical information with one another in a HIPAA-compliant manner over any Web browser.
In October, Verizon launched Converged Health Management, a remote patient monitoring software platform that enables doctors to monitor their patients' health between clinical visits. Biometric devices with the software installed can transmit data such as blood pressure, oxygen saturation levels, and glucose levels through a wireless connection to Verizon's health-care cloud. Patients and doctors can access this information via the Converged Health Management mobile app or Web-based portal, which features additional health information and a secure social network for patients to support each other.
Verizon's vision for the future of health care is clear -- it wants to leverage its position as the largest wireless provider in the U.S. to turn telehealth into a mainstream experience.
What about Verizon's competitors?
Verizon isn't the only communications company investing in telehealth.
The company's main rival in wireless communications, AT&T (NYSE:T), has also been building up a portfolio of telehealth services. Its core service, AT&T Virtual Care, is a broad set of video conferencing tools and medical devices tailored to meet the specific needs of health-care organizations and spread telehealth solutions to remote locations.
A more ambitious, experimental project, the AT&T Telepresence Clinic, is a custom "pod" that contains an onboard video conferencing system and medical peripherals -- everything a patient would need to visit the doctor remotely. AT&T is also developing a remote patient monitoring system, similar to Verizon's Converged Health Management, to constantly monitor patients through various wireless protocols.
Comcast (NASDAQ:CMCSA), Verizon's rival in Internet and TV services, is also looking to tap into the growth of the telehealth market. Last December, the company showcased various telehealth and video conferencing products at its Silicon Valley Innovation Center, and discussed the potential of telehealth to boost revenue as a subscription-based service. Comcast is notably an investor in BodyMedia, a maker of fitness-tracking armbands that was acquired by fitness band maker Jawbone in April 2013. That relationship has fueled speculation that Comcast could eventually use fitness trackers as part of its telehealth initiative.
The Foolish takeaway
The telehealth market is still in its infancy. However, if mobile efforts such as Apple's HealthKit and Google Fit take off and CMS rules are expanded to cover telehealth, the market could grow very quickly.
Communications companies such as Verizon, AT&T, and Comcast won't be the only beneficiaries here. Insurers will also see improved margins as the number of expensive ER visits dramatically decline for nonemergency situations. Most important, the spread of telehealth could drastically improve the quality of lives of patients and reduce hospital readmissions.