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Executive Summary
The rise of asynchronous, chat-based care will reshape how care is delivered, consumed, and paid for. While the adoption of asynchronous and chat-based care is low today (<10%), we expect it to rise exponentially in the coming years. We believe we’re in the "early innings" of the shift being driven by access challenges, technology advancements, consumer preferences, regulatory shifts, and market dynamics.
Key Takeaways:
- Massive Cost-Saving Potential: Research shows that approximately 66% of emergency department visits by privately insured patients are avoidable, representing a $168B savings opportunity. Chat-based care offers a critical solution for redirecting these patients to more appropriate and cost-effective care settings.
- Technology and Regulatory Momentum: The convergence of advanced AI capabilities, widespread telehealth payment parity laws (33 states as of 2024), and a mature digital health ecosystem has created unprecedented conditions for chat-based care adoption.
- Strong Market Validation: Despite current low adoption (<10%), demand signals are robust with ~95% of surveyed patients interested in chat-based care and growing acceptance from the medical establishment, as evidenced by 500+ organizations already billing for e-visits.
Market Context & Challenge
Healthcare accessibility remains a critical challenge with immediate and accessible medical advice out of reach for the majority of Americans. It is difficult for people to get quick and reliable answers to their medical questions, find appropriate / cost-effective medical care, or schedule appointments without long waits and lengthy back and forths.
- There are severe provider shortages throughout healthcare that create a need to increase the scalability of individual providers (expected shortage of 18-48K primary care physicians and 38-124K total physicians by 2034)
- While traditional telehealth helps improve provider supply pools, it does not change the 1-to-1 dynamic of an in-person visit which requires 1-to-many solutions to mitigate provider shortages
- Chat-based care enables providers to see 8-12 patients per hour, a 100% increase over the status quo, and capacity is expected to rise as new technologies are fully adopted
- Outside the Emergency Department, healthcare is built for M-F, business hour access, leaving even patients with primary care providers unable to get answers within 48 hours. This has created a two-tiered system, where those with concierge doctors / doctor friends reach out for immediate access, while those who don’t (i.e., the majority) are left with few options
- After-hours advice and triage lines are expensive, ineffective, and slow, with hours long wait times and per call costs ranging from $20-50. Given the poor experience, it is unsurprising these services are rarely used (~1% usage rates)
- The patient experience suffers dramatically, especially when compared to the status quo in other industries that have largely moved to a chat-first approach
- Millions of Americans use emergency departments and other high-cost sites of care as their de-facto primary care providers
- Avoidable utilization of high-cost services is common across demographics and specialties, with an estimated $168B savings opportunity associated with avoidable emergency department use (RH Analysis) and as many as ~66% of emergency department visits amongst the privately insured being avoidable
Why We’re Interested
We believe that patients are increasingly looking for solutions to improve their ability to gain access to timely, expert healthcare guidance and there are meaningful tailwinds around chat-based care including:
Technology Advancements
Technology advancements in generative AI and LLMs have dramatically changed the provider efficiency and automation equation when it comes to chat modalities. Current chat-based care providers can see 8-12 patients per hour but AI can vastly grow the number of patients a provider can see per hour, as well as to automate a significant portion of requests . Efficiency advantages will be gained through automation by suggesting responses for humans to review and over time may be able to resolve a subset of clinical cases independently, with limited human oversight. These technologies are widely accessible and relatively easy to build upon, thanks to the wealth of developer tools and open AI / LLM platforms that have come to market over the last few years
Consumer Preferences
Consumers increasingly prefer digital-first solutions that offer convenience and flexibility over in-person visits / traditional telehealth and chat-based care aligns with these preferences while offering an on-demand healthcare experience that meets patients where they are. Our patient survey revealed highly positive signals for chat-based care:
- ~95% of survey respondents showed interest in utilizing
- ~55% of respondents indicated it would be “very useful”
- ~40% said “somewhat useful”
- ~45% of patients said they would use chat based care prior to seeking other treatment (while an additional ~35% would use it while seeking other treatment)
Market research indicates chat-based solutions (~5-20% utilization of existing platforms rolled out in employers / payors) have a significant opportunity to improve patient engagement relative to traditional programs (nurse call lines see ~1% utilization)
Regulatory Environment
Regulatory policies increasingly support and encourage the adoption of virtual care models including chat-based care. Reimbursement structures are being updated to include these services, and future regulatory changes are expected to provide a more supportive environment for the growth of chat-based care
- 33 states have passed telehealth payment parity laws as of 2024, up from 19 in 2019, with the trend expected to continue
- Billing for patient messaging continues to increase, with almost 500 organizations billing for more than 50 e-visits in Q3 2022 with sinusitis, urinary tract infections, and acute respiratory infections being the most common diagnoses codes
Healthcare Ecosystem Support
The medical establishment has accepted the reality that telehealth / chat-based care is an important part of the future of care delivery representing an evolution from their broadly antagonistic treatment of these players in the past
Traditional healthcare stakeholders are experiencing increased operational pressures driven by rising labor costs, staffing and workforce management complexity, shifting payment models, tightening reimbursement environment and increasing focus on quality outcomes. Chat-based care offers a cost-effective solution that can enable a more efficient use of healthcare resources across stakeholders
Current State
Chat-based and asynchronous care is not a new idea and there have been previous attempts to build something transformative in this space. However, we believe that the confluence of tailwinds outlined has created a strong “Why Now” story that uniquely distinguishes this moment from the past.
Future State & Opportunities
We believe that chat-based offers a unique value proposition to all healthcare stakeholders. The impact will only increase over time as patient acceptance increases, improvements in AI / LLM technology expand the scope of impact and the regulatory environment / physician acceptance continues to accelerate adoption.
A variety of stakeholders would benefit from utilizing chat-based care and each provides a unique value proposition including:
- Payors
- Lower total cost of care by diverting care from high-cost to low-cost sites of care and keeping members in-network
- Decrease operational expenses by shifting volume from high-cost nurse call lines to chats
- Improve member experience, retention, access, and outcomes, leading to improvements in STARS ratings and HEDIS measures
- Address SDoH, care gaps, and regulatory compliance by improving access to care
- Health systems and physician groups
- Increase patient engagement, retention, and loyalty through more convenient digital experience
- Address staffing shortages and lack of specialty expertise
- Provide better after hours coverage
- Reduce provider burnout and improve retention by moving messaging from EHRs / emails (i.e., MyChart) to systems that drive efficiency
- Increase efficiency with improved intake, triage, and patient flows
- Employers
- Lower medical costs by encouraging employees to utilize lower costs sites / methods of care
- Offer basic primary care to employees that would otherwise not have health benefits (e.g., seasonal, part-time, hourly workers)
- Increase employee satisfaction, reduce turnover, and reduce absenteeism with a new and convenient health benefit
- Respond to employee demands for more convenient and accessible healthcare
- Patients
- Enjoy the convenience and accessibility of being able to get help wherever you are, 24/7
- Secure peace of mind with easy access to medical experts
- Save time and money by avoiding long and expensive visits to the emergency room, urgent care and primary care
- Get clinical and educational questions answered quickly
- Accomplish basic tasks from the comfort of your smartphone, without needing an in-person / video visit, or lengthy phone call
Risks & Considerations
After completing market research and surveying the pain points of healthcare stakeholders, we believe there is a compelling opportunity to build an attractive business in chat-based care. However, we feel that founders need to be mindful of the following challenges that we foresee them encountering:
- Competitive Landscape: There are several companies operating in a similar space with potentially significant leads. Key question: What is the right MVP that will establish PMF and a clear GTM path?
- Adoption Preferences: Telehealth services and on-demand video calls exist, and it is unclear whether a chat-first solution would be a preferable alternative to these. Key question: Will consumers demand and pay for chat-based care as indicated in our market survey work where ~95% of consumers surveyed indicated a demand for chat-based care solutions?
- Incumbent Disruption: Epic may introduce a true chat-based care product and create a clear path for adoption for existing EMR customers. Key question: If this occurs, will there be a big enough market outside of traditional health systems/physician groups to build an attractive business?
- Regulatory Constraints: The regulatory environment may not evolve to allow the scope of automated diagnoses/care delivery required to build a scalable model. Key question: What is the best path to creating a business model that maximizes automation without requiring approval as a software-as-a-medical device?
- Scaling Challenges: Asynchronous/chat-based care models may not take hold and scale at the rate we envision. Key question: How can the technology and chat-based model be best utilized to appeal to the widest range of potential customers?
Opportunities for Innovation
While there are many players operating in the broad asynchronous care space, overall patient penetration is limited (<10%), there is white space in the market and room for multiple companies to grow and expand. We believe that there is a compelling opportunity to differentiate from the existing players in a number of ways:
- AI Human Hybrid Models: Blending new AI tools and automation with human driven care, leveraging cost-efficient labor across the talent stack (clinical and nonclinical, nurses and MDs) to cost-effectively deliver the best care and experience possible
- Targeting Underserved Use Cases: Emphasize whitespace use cases like triage, utilization management, and quick Q&A
- Dual Focus Strategy: Maintain a dual focus on technology and care delivery, with a long-term strategy focus on a SaaS business model catering to enterprise clients
- Technology-First Approach: Leverage the latest technology and current trends to build an efficient and compelling product from the ground up, without technical debt or other baggage saddling competitors
What’s next
The healthcare industry stands at a pivotal moment, where chat-based care has the potential to transform how patients access care, how providers deliver services, and how the overall healthcare ecosystem operates. The convergence of advanced AI technology, favorable regulatory trends, changing consumer preferences, and pressing healthcare challenges has created a unique "Why Now" opportunity.
For entrepreneurs and innovators looking to make an impact in this space, the path forward requires a careful balance of technological innovation, strategic market positioning, and a deep understanding of healthcare stakeholders' needs. By addressing the challenges and capitalizing on the opportunities outlined in this analysis, new entrants can build solutions that not only improve healthcare access and efficiency but also create sustainable business models that deliver value across the entire healthcare spectrum.
The future of chat-based care is not just a technological vision but a practical necessity for a healthcare system straining under the weight of provider shortages, rising costs, and increasing consumer demands. Those who successfully navigate this landscape will help shape a more accessible, efficient, and patient-centered healthcare experience for millions of Americans.
Build With Us
Are you interested in building in chat-based healthcare? The time is right for innovative solutions that can address the critical challenges of healthcare accessibility while delivering value to patients, providers, employers, and payors alike. Let's build the future of healthcare delivery together. Reach out to us at buildwithus@redesignhealth.com
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