Telehealth progress in 2014: Investments, reimbursements, policy reform, and personalization have the industry poised for substantial growth in the coming year.

The telehealth industry made significant progress in 2014—and not just in mindshare. For telehealth, it has been a year of development, experimentation, investment, and adoption. By October, the most recent month for which data is available, investments in U.S. digital health companies were estimated at $5 billion.

Show Me the Money: Multi-Million Dollar Investments in Telehealth Products and Services

MDLive, a Florida-based provider of telehealth services and software, began the year of telehealth investment in January with a $23.6 million round of funding to build out its healthcare system in the cloud.

American Well, a telehealth services company, has just completed an $80 million funding round. Investments came from high-powered financial and healthcare institutions, such as Anthem and Jefferson Health System, and are indicative of a groundswell of support for telehealth by the nation’s decision-makers. American Well plans to use the funding, in part, to work toward easing regulatory restraints, building more extensive provider networks, and working with insurers to increase reimbursement.

Other notable funding rounds in 2014 include Doctor on Demand’s $21 million from Venrock, Shasta Ventures, and Sir Richard Branson. Additionally, Dallas-based Teladoc, whose services are used by large companies and health insurers such as Blue Shield of California, Gallup, and Highmark, secured a $50 million round of equity funding.

Reimbursements and Regulatory Changes Key to the Success of Telehealth

Although physicians may recognize the potential to improve patient outcomes, particularly among those with chronic illness, many are unable to experiment with the technology. The threat of malpractice suits, HIPAA violations, and lack of reimbursements impede complete adoption.

In 2014, however, the winds began to change. A recent actuarial study, by the Alliance for Connected Health, highlights the potential savings of telehealth given expanded reimbursement and policy reform. Currently, 21 states and the District of Columbia require insurance companies to reimburse for a telehealth visit.

Leading insurance companies have recognized the benefits of telehealth consults and are investing in the future of medicine.

In California, for example, Kaiser has expanded its store-based medical access in four Target locations. The Target-based clinics will now include telehealth consultations with remote physicians in addition to the nurse practitioners and vocational nurses already on site. The insurance giant hopes this will encourage patients to use the retail clinics for primary care in addition to urgent care needs.

Even Medicare HMOs are jumping on the digital health bandwagon. As of January 1, 2015, members of certain plans in 12 states will be eligible for virtual visits with co-pays.

Also beginning in 2015, California’s Medicaid program, Medi-Cal, will be required to cover teledentistry services administered by dental professionals without the direct supervision of a dentist. State officials hope that the coverage enhancements will increase access to dental care in underserved and remote areas. Patients will receive services, such as x-rays and temporary fillings, with only remote consultation from a certified dentist.

Instant Access to Physicians Is Great, but What About Continuity of Care?

The freedom to ask a medical professional about a child’s fever as soon as you notice it, without loading the child into the car, seems like a dream come true to many parents. But can physicians and patients develop meaningful, sustained relationships remotely? Do patients trust the advice they received during telehealth consultations as much as they do in-person?

In response to these types of questions from healthcare providers, patients, and insurance carriers, one mobile start-up raised $6 million for its medical query service. With the tagline, Every mom’s new best friend, telehealth provider First Opinion attempts to build trusting patient-physician relationships by offering 24/7 access, a consistent and friendly physician to offer personalized care, and notably, an all-female (and mostly mom) team of providers. At intake, parents are matched with a doctor; after matching, they interact with the same physician every time they use the service.

nuviun asked Cleveland Clinic pediatrician Michelle Medina, MD, FAAP, what she thought about First Opinion’s doctor-mom service. Dr. Medina told nuviun:

“I think the doctor-mom angle resonates. I noticed a change in how I communicate and tell stories after I had [my child]. But, I’m careful to present advice based on the best evidence I know from my experience as a physician, and not just on the basis of what I would do if it were my child. There are questions, particularly around child rearing, where I have to be more aware of this balancing act.”

Compared to a typical call center, though, Dr. Medina thought patients might appreciate the continuity and convenience of care First Opinion provides.

Big Expectations for Telehealth in 2015

Given the level of investment and insurance company buy-in that telehealth has seen in 2014, as well as the continued market research and development to make services more appealing to consumers, it seems that 2015 may be a year of widespread implementation and use of telehealth services.

Jenn Lonzer has a B.A. in English from Cleveland State University and an M.A. in Health Communication from Johns Hopkins University. Passionate about access to care and social justice issues, Jenn writes on global digital health developments, research, and trends. Follow Jenn on Twitter @jnnprater3.