Telehealth Economics: Balancing OPEX and CAPEX

In telehealth, OPEX is often an equally important cost driver as CAPEX

Healthcare executives usually have to develop a cost-benefit analysis when making a case for telehealth deployment. There's a lot of discussion around the benefits, but today I'd like to talk a bit about the cost. We tend to focus most of our attention on CAPEX (i.e. upfront cost of equipment) as it comes from an organization's limited cash reserves. However, thinking through the operating expenses and understanding its long-term impact is equally important. Let's take a look at some of the considerations:

1. Is Your Telehealth Vendor Device-Focused Or Service-Focused? Typically, telehealth vendors have two ways of doing business. Traditional vendors focus on selling devices, and their profits are usually driven by device sales volume. Device-focused traditional vendors tend to have high upfront costs and often attempt to sell customers new equipment as soon as possible. On the other hand, modern telehealth vendors put emphasis on innovative and differentiated software. Service-focused vendors generate business by getting clients to use their platform, and keeping them happy to guarantee recurring revenue. These organizations also tend to have the lowest possible CAPEX to make it easier for customers to try their platform. 19Labs is a service-focused vendor and long-term technology partner to healthcare providers worldwide. Our GALE platform is developed around mobile technologies like commercial tablets, mobile phones, and remote diagnostic devices and cameras (if you haven't seen it yet, check out our article on exam cameras and their cost trade-offs). This means that the cost of our equipment tends to be significantly lower than that of traditional device-focused vendors.

2. Who Is Using The Telehealth Solution At Point-Of-Care? How Much Are Their Wages? Skill level and ease-of-use of a telehealth solution directly impact the skillset, training, and background of the person you need to hire to operate the unit. Traditionally, a healthcare professional has been required for this (according to May 2020 data, the median annual wage for registered nurses was over $70,000). However, with new technologies in digital health, it's now possible for non-healthcare professionals with minimal online training to operate telehealth units. That has a direct impact on your costs in two ways:

  • The hourly or annual salary rate of staff tend to be much lower

  • Since training is significantly shorter (typically less than a day and can be done online), you're able to have multiple people working hourly instead of hiring additional full-time, dedicated workers

Our GALE platform was designed from conception to focus on ease-of-use so any high school graduate can operate the unit. This isn't something that can be easily adopted by existing telehealth solutions; to do this, a platform has to be intentionally built from the ground up as intuitive and easy-to-use.

If you'd like to see GALE's ease-of-use in action, feel free to book a demo here.

3. How Will Your IT Team Maintain Telehealth Deployments?

Sending IT personnel on-site to install and manage telehealth deployments can be costly. There are certain platforms in the market that require the presence of IT professionals, and even electricians, during setup and routine maintenance. Setup and recurring maintenance costs have to be budgeted for platforms like these.

Alternatively, there are solutions that are more portable and easy to deploy. A smart telehealth solution is simple enough for non-IT people to assemble, and can be set up and maintained by your IT team remotely. Our GALE platform is like this: easy to deploy, can be managed remotely, and provides important IT analytics such as number of telehealth sessions, data usage, and usage frequency for each diagnostic device. Put simply, we centralize the IT so your healthcare team can provide care remotely.

If you'd like to know more about GALE's deployment management system, feel free to book a demo here.

About 19Labs

19Labs is the creator of GALE, the one flexible enhanced telehealth platform that integrates the right devices for any use case, at the right price point. GALE brings together “best of breed” diagnostic technologies from industry leaders like Zoom, Eko, Samsung Mobile, MIR, Omron, and many others in one smart, efficient, and cost-effective platform. It was designed from the ground up to be operated by either clinicians or non-healthcare professionals under the most extreme conditions on the planet, including areas with very limited infrastructure and low bandwidth situations. To learn more about GALE, please visit