How To Start a Telehealth Business
A high-level overview of everything you need to know.
Have you ever wondered how to start a telehealth business? With the telehealth market size set to increase at a compound annual growth rate (CAGR) of 24.3% between 2024 and 2030, there’s a clear demand for these services. However, there are some instrumental details you’ll want to know to make your virtual care business a reality.
If you’re unsure where to begin, use this guide as a reference. This helpful overview will give you the information needed to launch a scalable, profitable and thriving telehealth company.
1. Define your business model
While you might know that you want to offer telehealth services, that alone isn’t enough to differentiate you from similar businesses. You’ll need to determine how your brand can stand out, which is why creating a solid business model is so important.
A business model illustrates how your organization will create value for others and generate revenue. It should further identify the problem you hope to solve in the marketplace and who you want to help.
Here are some things you’ll want to think about when developing your business model:
Determine which services to offer
Thanks to technological advances, numerous healthcare services can be offered virtually.
Before the COVID-19 pandemic, telehealth was primarily used in psychiatry, cardiology and radiology. Today, though, we’ve seen it evolve into:
Urgent care
Sexual Health
HRT/TRT
Chronic Care Management (CCM)
Weight loss
And more
Identify your target market
According to Investopedia, a target market is a broad group of individuals with shared characteristics who are most likely to buy your product or service. It’s a less defined group of end users but a foundational building block.
To avoid targeting everyone and overgeneralizing, do your market research and think about those likely to work with your telehealth business based on shared factors among the following:
Demographic: Age, occupation, income level, etc.
Psychographic: These are the most personal characteristics of a person and may include their interests, hobbies, values and more.
Behavior: Identify their likely consumer behavior, such as their process of buying online or how they’re most likely to learn about your company.
Geographic: A telehealth business allows you to access patients nationwide, but you can also decide to serve a specific city, state, or region.
Clarify your target audience(s)
A target audience is a specific segment of your target market that you aim specific marketing efforts toward. Unlike target markets, where you can only have one, you can have many target audiences that receive different campaigns. Every potential patient interested in using your services won’t respond to the same promotional efforts.
Let's say your telehealth business offers testosterone replacement therapy (TRT) services. Your target market might be men experiencing erectile dysfunction, but your target audience could be younger men in their 20s and 30s searching for a discreet, convenient, and timely solution.
Pick your niche
Your niche is a combination of what you do and who you serve. An example of that is offering virtual hormone replacement therapy to women over 45.
Because the telehealth landscape is evolving, companies must get creative if they hope to stand out. Specializing allows your business to be viewed as an authority figure in the market and differentiate you from your competitors. In addition, by narrowing the focus of your business, you’re able to streamline operations.
2. Understand the legal and regulatory landscape
Telemedicine allows providers to treat patients across state lines, but businesses must comply with state and federal laws to avoid costly penalties and lawsuits.
Key regulatory considerations:
Licensing and credentialing
Medical licensing ensures clinicians have the necessary skills and legal approval to practice in a state. While telemedicine enables providers to see patients nationwide, they must be licensed in each state they operate to avoid legal repercussions.
This process is costly and time-consuming, averaging $1,000 per state and taking 3–6 months. Many telehealth companies hire dedicated staff to manage it. Additionally, providers must undergo credentialing to verify qualifications and secure reimbursement, costing around $200 per payer. Malpractice insurance, often required, can add $24,000 per provider.
Despite its complexity, proper licensing and credentialing are essential to maintaining revenue and avoiding disruptions.
Maintain HIPAA compliance
In addition to the above, you also want to make sure your telehealth business complies with the 1996 Health Insurance Portability and Accountability Act (HIPAA) rules. This federal law protects the privacy and security of a patient's medical data by setting standards for managing protected health information (PHI). Check out our whitepaper on navigating HIPAA and CPOM to learn more about staying compliant and avoiding the legal consequences of non-compliance.
Become an expert in telehealth laws
To make sure your business stays compliant, become an expert, or hire an expert in the various telehealth regulations. Outside of HIPAA, here are some of the other laws you’ll want to be aware of. Consider the following telehealth rules you should know:
Informed consent: Some states have statutes requiring health professionals to obtain documented informed consent from a patient every time telehealth is used.
E-prescribing: Federal and individual state regulations govern how and what practitioners can prescribe online. For instance, a physical exam may be required first, or a questionnaire may not be enough to confirm a professional relationship between the provider and patient for the purpose of online prescribing.
Treatment protocols: Ensure that telehealth delivery is the right treatment approach and that your business meets payers' and states' technological requirements. For example, audio-only communication or store-and-forward technology may not be reimbursable or allowed in some scenarios.
Reimbursement and insurance
Commercial health plans, Medicaid and Medicare all handle telehealth reimbursements differently. In addition, their rules often change, so what happened last quarter might not be applicable to the next one. The state of telehealth insurance coverage is ever-changing.
Therefore, it’s crucial to be knowledgeable about the numerous insurance policies, how to bill for services depending on the payer, and what’s covered when operating a telehealth business.
Although payment parity requires payers to reimburse for telehealth at the same rate as the equivalent in-person service, not all states have this in place.
3. Build or select a telehealth platform
One of the most significant decisions you’ll make is whether to build your own telehealth platform or use a third-party solution.
Building your own telehealth solution
Building in-house allows you to customize it to your specifications, ensuring it accommodates your workflows and unique niche use cases. However, it also requires you to build processes for clinical operations, billing, support, tech, legal, marketing and more.
You’ll also need a robust tech stack that should include:
Video conferencing software
Scheduling tool
HIPAA-compliant electronic health record (EHR)
Billing software
And more
If you don’t already have some kind of health platform in place, a popular and cost-effective option is partnering with a third-party vendor like OpenLoop. Simply tap into a ready-to-use, white-labeled and fully-compliant platform and launch in a fraction of the time.
4. Provider network and staffing
Building a telehealth business starts with hiring the right providers—but the process can be complex. Finding clinicians who align with your company values, salary expectations and availability often requires a recruiter to manage job postings, interviews, background checks and contract negotiations.
Beyond hiring, providers must also be licensed and credentialed, adding time and cost. To streamline operations, many telehealth companies opt for provider staffing solutions.
W-2 vs. 1099 Providers
W-2 Employees: Offer stability with guaranteed hours and benefits but require high salaries (~$225,000 annually), which can be risky for startups with fluctuating patient demand.
1099 Contractors: Provide flexibility, allowing providers to supplement income with part-time shifts. This model helps telehealth companies scale efficiently, access a wider provider network, and manage costs effectively.
To ease the burden, experts like OpenLoop can assist with malpractice coverage, training, licensing, credentialing and more, ensuring a smoother hiring process.
5. Business operations and growth strategy
If you want to attract leads, you must have a marketing strategy, and in order to collect revenue, you need to decide how you’ll take payment.
Determine a revenue model: insurance vs cash pay
Insurance Model: Partnering with insurers provides access to a larger patient network and more consistent demand since cost isn’t a barrier for patients. However, this comes with added administrative work, specific charting requirements and complex billing processes.
Cash-Pay Model: Allows for greater pricing flexibility, lower overhead and customized charting methods. While it simplifies operations, it can limit your patient pool and may require different marketing tactics to attract patients.
Many telehealth businesses choose a hybrid approach, accepting both insurance and cash payments to balance accessibility and revenue control.
Marketing strategy
Part of creating a successful marketing strategy involves a few things:
Perform a competitive analysis: Based on your competitors strategy, identify how to differentiate your brand in the marketplace.
Develop a compliant website: Ensure it's user-friendly, SEO-optimized, and LegitScript certified.
LegitScript certification: Required to advertise telehealth services that involve prescribing medication. To put it simply, if you want to advertise, you need to be LegitScript certified.
Without it, you’ll run into issues with:
Advertising on major platforms, like Google, Meta, TikTok, etc.
Accepting payments from major credit card companies
Establishing trust with patients and stakeholders
Check out our blog that dives deeper into what the LegitScript certification process entails.
Compliance and security
It’s essential to mitigate cybersecurity risks within your virtual care company. Unsecured communication channels, poor device security and unclear data integrity and authenticity practices can put patients at significant risk.
The HIPAA Security Rule mandates that providers have physical, technical,and administrative safeguards in place and acts as a framework for cybersecurity practices. Whether you build your own telehealth platform or work with a vendor, ensure that these best practices are followed:
Encrypt data that’s in transit and at rest
Implement multi-factor authentication
Require role-based access control
Audit telehealth systems for vulnerabilities
Educate patients and providers on the importance of using secure devices and networks during telehealth sessions
6. Establish your GTM launch plan
At this stage, it's time to test your telehealth business and assess what’s working and what needs improvement. With your team of experts, set goals and establish key performance indicators (KPIs) to measure them.
Start with a soft launch
Maybe you have big goals of providing nationwide coverage, which is certainly feasible. However, you shouldn’t jump into this right away. Instead, do a soft launch, including 2 to 4 states so that you can test.
Starting with a small audience will give you an opportunity to review your telehealth platform for any hiccups and assess your workflows. Following that, you can make adjustments to smooth things out before your full rollout.
Hard launch and post-launch
The time has come, and you’re ready to officially roll out your virtual patient services nationwide. We know it’s an exciting time, but the work doesn’t end here. It’s important to stay open to improvements, pay attention to changing regulations and closely monitor patient feedback.
7. Perform regular audits
Quality is imperative to a business's success, and ongoing audits can help you protect your patients and avoid financial loss.
NCQA
The National Committee for Quality Assurance (NCQA) is a non-profit that aims to improve healthcare quality with its various certification and accreditation programs. Achieving NCQA accreditation is seen as the gold standard in the healthcare industry and would help any telehealth business stand out. Once you receive accreditation, you must complete and pass annual audits to maintain it.
SOC 1 and 2
If you want to demonstrate that your company adheres to stringent security and privacy standards, look into obtaining the Service Organization Control (SOC) certifications.
SOC 1 reports focus primarily on financial data control and is essential for revenue software. SOC 2 reports, on the other hand, are much more extensive, covering non-financial reporting controls associated with:
Security
Availability
Processing integrity
Confidentiality
Privacy
SOC 2 applies to all service providers, but it’s especially important for cloud service providers and those in healthcare. To achieve certification, your organization will need to be audited. The third-party auditor will evaluate your controls against the applicable trust services criteria (TSC) outlined by the American Institute of Certified Public Accountants (AICPA).
Bring your telehealth business to life
The road to providing virtual care can seem daunting, but it doesn’t have to be. Allow this “how to start a telehealth business” guide to help you bring your vision to life.
Or, reach out to OpenLoop, and we can set up and maintain your entire back-end operations while keeping it under your brand. We’ve spent years building out our white-labeled digital health infrastructure services and work with some of the biggest names in telehealth. You bring the patients, we handle everything else
Ready to learn more?
Our full suite of white-labeled virtual care infrastructure solutions include: