Following Uber's lead, demand fuels funding surge for on-demand healthcare industry
Companies like TeleDoc, American Well have raked in millions as investments are expected to quadruple by 2017, Accenture report shows.
As taxi companies like Uber and Lyft continue to pick up billions in funding, the surging interest in similar on-demand services is trickling over to healthcare startups.
According to a new report by Accenture's, from 2000 to the present, more than 230 on-demand companies have sprung up, raising $12.5 billion in funding, with healthcare startups Teledoc and American Well cracking the top 10.
TeleDoc, which ranked 5th, snagged $245 million in venture cash as of September 2015 while American Well, which ranked 7th, raised $141 million. Uber, Lyft, GrubHub and Instacart filled the top 4 spots.
TeleDoc and American Health both provide ready access to doctors via phone and online consultations.
According to Accenture, health is the second-fastest growing segment in the on-demand industry, with the number of on-demand companies surging to 42 in 2014 from just four in 2010.
Accenture's report also predicts funding for on-demand health services will quadruple by 2017, swelling to nearly $1 billion in annual investments
Within the on-demand health market, primary care led when it came to funding, which Accenture measured from 2010 to September 2015. The primary care segment garnered $639 million, riding the telemedicine trend of video doctor visits and apps that put you in touch with physicians via your smartphone or tablet, the report showed.
Like Healthcare Finance on Facebook
Fitness and wellness, which includes on-demand services that among other things deliver trainers and other fitness professionals right to customers' doors, was the next most successful segment when it came to funding with $21 million.
The behavioral/therapy segment, where consumers can access on-demand virtual therapies and other services, brought in $19 million. Other on-demand segments included specialty care, consumables and veterinary care.
Accenture also predicts several major forces will drive the on-demand health economy in the future.
For starters there's government-mandated change, as large insurers are now reimbursing for virtual visits and Telehealth Parity laws have popped up in almost 30 states.
According to the report, on-demand virtual visits cost less than traditional doctor visits, which consumers find attractive.
Technology is also driving investments, since as of May 2015, 187.5 million people in America owned a smartphone that could be used for on-demand health services.
Lastly, new payment models mean the healthcare industry is looking for ways to attract and keep new clients, and lower costs. Introducing new products and services like on-demand apps can set them apart from the competition, Accenture said.
Twitter: @BethJSanborn
