We had high hopes and much enthusiasm that telehealth would fix the U.S. healthcare system: fewer commutes, shorter waits, less time in crowded waiting rooms, and higher value through care continuity. We expected the pandemic to be the turning point for telehealth, and telehealth companies shared that expectation, as valuations rose and investor attention followed. Several years on, many companies in the telehealth business (e.g., Optum Virtual Care, Walmart, Teladoc) have been struggling, and the promise of patient-centric, continuous care has yet to materialize. Was the rise of telehealth-centered healthcare just a temporary, pandemic-induced blip destined to collapse?

We believe there’s more to this story and to the future of telehealth. It requires a mind shift in strategy, moving away from a go-it-alone approach. The true value of telehealth can be unleashed by embracing a co-opetition strategy—through intentionally built partnerships between telehealth businesses and traditional care providers for value delivery. By supporting traditional providers with complementary care and technology services, telehealth companies can help create a high-value ecosystem while securing their own future in it.

Telehealth businesses commonly operate as platforms, stand-alone services that connect patients with a provider from a network of online doctors, often with a significantly shorter wait time. After the pandemic, many of these businesses found themselves competing with traditional providers, who can also provide care using telehealth technology.

However, two fundamental aspects of healthcare, trust and care continuity, render this business model fundamentally ineffective. Research shows that patients prefer their own physician and tolerate longer wait times to see them.

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