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Telemedicine Sector Attracts Funding, But Some Physician Groups Worry About Quality of Care

Investors are betting that more Americans will like getting medical care 24/7 without leaving home or work. The telehealth sector has attracted $272 million in venture-capital funding since 2010—including $79 million in the last quarter, according to Mercom Capital Group, a health IT research firm.

"Politicians and lobbyists can't solve health care. It's quite simple: Empower consumers with patient-in-control solutions," says John Sculley, former Apple CEO and vice chairman of MDLIVE, which netted $24 million in new funding this year.

Doctor on Demand launched in December with $3 million in seed funding from Google Ventures and other investors. Its co-founder is Jay McGraw, executive producer of the talk show "The Doctors," and son of psychologist Dr. Phil.

Many health plans think such services will provide savings, and cover most or all of the cost for their members. As of last year, 11% of large employers offered telemedicine services to their employees and 28% were considering it, according to consulting firm Mercer.

But some physician groups and state medical boards worry that such e-visits are undermining the doctor-patient relationship and lowering the quality of care.

"Most physicians would never accept a phone call from a patient they haven't met and diagnose and prescribe medication for that patient. Yet that is a common practice for many 24/7 health-care services," says Greg Billings, executive director of the Robert J. Waters Center for Telehealth and e-Health Law, a nonprofit research group, also known as CTel.

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