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Telemedicine Business Model | Complete Guide

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    Posted in Telemedicine

    Last Updated | April 11, 2023

    Telemedicine Business Model

    Looking to set up your telemedicine business? As a strictly regulated and highly competitive business, you need to be wary about various aspects. The telemedicine business model relies heavily on the integration of telehealth software, including telepharmacy software, to facilitate remote consultations and medication management for patients in a variety of healthcare settings.


    According to research, 53% of patients leave their scheduled appointments because they have to wait for too long. In addition, people from rural areas don’t have access to medical care at all. Those patients either live too far away or don’t have enough doctors in the area. In simpler words, it’s challenging for some people to acquire the medical and healthcare they need.

    These situations indicate a significant gap between healthcare providers and patients that limits them from accessing medical assistance. In such instances, nothing helps more than telemedicine. Custom healthcare software development and telemedicine leverage technology to help healthcare providers and patients communicate with each other.

    For this reason, the telemedicine business has become an exceptional investment opportunity for startups and entrepreneurs because 76% of patients are interested in getting services through telemedicine. So, if you want to step into this industry, we are sharing everything you need to know about the profitability of telemedicine and the telemedicine business model.

    Explore: What are the different types of telemedicine?

    Describe the Business Model for a Telemedicine Company

    The basic telemedicine business model includes the telemedicine provider partnering with doctors who are practicing in significant urban areas. Once the physician is impaneled, he/she consults with patients, and the physicians connect through the computer medium that allows her/him to listen, see, and speak to the patients.

    Since physicians can do everything that they do in OPD, they will be able to serve the patients better as compared to rushed physical OPDs. This telemedicine business model works because physicians can examine more patients in a short timeline, and that too, in remote areas. In addition, the success of the business model depends on the perception of the masses.

    Fortunately, telemedicine has already been accepted by the masses because e-clinics have already been tested, and patients from remote areas view such e-clinics as the preferred place to get services whenever they need medical attention. Telemedicine and healthcare ERP system also helps bridge the divide in healthcare without compromising on affordability.

    List the Benefits of Telemedicine for Patients and Providers

    benefits of telemedicine business model

    The majority of healthcare organizations are already yielding benefits of reliable healthcare UX design and healthcare integration with digital systems. It has significantly reduced adverse incidents and improved efficiency. In addition, it’s optimizing chronic health and preventative care management. There are various direct and indirect benefits of telemedicine for patients and doctors, such as;

    1. Improved Access to Specialist Care

    It’s needless to say that the majority of patients in rural areas don’t have access to specialist healthcare, and in some cases, they don’t have healthcare services at all. In addition, doctors have limited ways of communicating with patients who are in need of healthcare. Having said that, developing a medical app with a telemedicine feature can bridge this gap.

    1. Lower Expenses & Costs

    Telemedicine has the direct benefit of reducing healthcare costs. To begin with, the travel and transport expenses will be eliminated, and a telemedicine session will eliminate the need for a hospital stay, which will save energy costs for healthcare institutes.

    1. Better Health Outcomes

    Telemedicine services can improve patient engagement during healthcare, which significantly improves healthcare outcomes. According to research, telemedicine reduced re-admissions by 31% and hospital admissions by 38%.

    1. Increased Efficiency

    Telemedicine cannot replace in-person treatment because it’s only meant to enhance the doctor-patient relationship. The doctors can provide in-person appointment but also provides flexibility and convenience for follow-up visits, checkups, and awareness sessions through telemedicine.

    Related Information: Telemedicine benefits


    The Challenges Associated With Implementing a Telemedicine Business Model

    challenges of telemedicine business model

    A telemedicine business model can be challenging to execute because it’s the core platform where patients can connect with doctors on all devices as long as they are connected to the internet. For this reason, as a telemedicine software development company, you’ve to ensure that the telemedicine app is implemented properly.

    To help you, we are sharing some challenges associated with implementing the telemedicine financial model or a business model.

    1. Higher Costs

    To begin with, telemedicine can cost a lot. There are multiple products in the market that start from $1000 to implement in a healthcare organization, but some cost as little as $100 with add-on charges. The cheaper solutions aren’t user-friendly and have to be integrated with multiple add-ons to offer the right features.

    In most cases, the clients fail to understand the severity of the costs and try to negotiate a lower price. Having said that, discussing the costs can be challenging.

    Explore More: Telemedicine startup cost

    1. License Requirements

    Every state and country has its own licensure requirements and regulations when it comes to implementing healthcare solutions. With telemedicine, it’s easy to cross state lines, which often results in penalties. The solution is to familiarize yourself with the licensure policies and regulations regarding telemedicine in your areas of service.

    1. Integration with EMR

    Integration of telemedicine with EMR is one of the most significant challenges. The majority of telemedicine services are being curated for EMR integration, but some are still unable to offer the solution. EMR integration and healthcare app development is a process of acquiring and storing patient information from previous visits.

    To overcome this issue, the companies need to work in collaboration with the doctors to create telemedicine software that allows EMR integration – it will ensure that doctors have access to the latest patient records and provide the most reliable healthcare services.

    How to Offer Tips for Successfully Launching a Telemedicine Company

    It is important for telemedicine companies to ensure compliance with state-centric and HIPAA standards. For this reason, before you put up a telehealth business for sale, consider the following points;

    • Consider the telemedicine laws in your country or state because they vary with each state. In addition, you must check the reimbursement policies
    • You have to understand the market position, analyze the key competitors and their pricing, and see what they are offering. This information will help you set a balanced price that attracts the right business partners
    • Always do your homework about the features. For instance, if you want to offer asynchronous communication, you have to provide secure data storage, while solutions needed for diagnostics need HD images
    • Define the customer segment and identify the business goals. It’s important to add uniqueness to your services and focus on solving the socioeconomic problems
    • Consider how your tech solutions will drive profit. In particular, you’ve to define a revenue stream because all of them have different pricing models
    • Make an action plan that includes the business development activities

    Much Related: How to start a telemedicine practice?

    The 5 W’s Of a Telemedicine Business Model

    The telemedicine business is a complex business as patient-doctor communication, provision of medical services and medical education depend on it. In addition, it’s a high-risk business, which is why you’ve to consider the five W’s of the telemedicine business, such as;

    • Who will be impacted if your telemedicine business fails or telemedicine software stops working?
    • What types of medical conditions and patients need telemedicine services the most?
    • When does having inoperative equipment affect your business to run at full capacity?
    • Where do you want to provide the services?
    • Why are you starting the telemedicine business and offering the software?


    Telemedicine business model adoption has become a critical factor for many healthcare organizations and patients, like cost savings, convenience, and higher accessibility. On the other hand, the healthcare providers like the reduction in overhead costs and the offer the flexibility to work. For this reason, it’s the right time to jump into the industry but make sure you have a solid business plan and are compliant!


    Describe how telemedicine can be used to improve patient outcomes.

    To begin with, patients no longer need to travel far distances to get the required healthcare services. In addition, the patients can get awareness sessions, which help them handle their medical condition better.

    Discuss the potential benefits of telemedicine for both patients and providers.

    Telemedicine eliminates transportation costs, saves time, and eliminates elder care or childcare issues. In addition, it provides quick access to medical specialists and eliminates long waiting times.

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