DTC Healthcare: The Good, Bad, and the Creator

May 13, 2024
Emmy Liederman
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DTC healthcare is exploding—and it's just the beginning

Healthcare consumer products are a thriving sub-category in the DTC space. In 2018, digital health saw record investments of $8.1 billion—42% more than investments in 2017.

The patient is now the customer.

Photo credit: Teddy Citrin

The pandemic has accelerated what was already a booming space. According to a report by Deloitte:

  • 80% of people who have had a virtual healthcare appointment would choose to have another
  • More people are using technology to monitor their health, measure fitness, and order prescription refills 
  • Before COVID-19, there was a slight decline in people who were willing to share their health data—but during the pandemic, new data showed that people are more comfortable sharing data during a crisis

Even outside the stats, the pandemic has created new norms that could accelerate the DTC healthcare space even more. People have become used to:

  • Virtual care visits for prescription refills and follow ups
  • Fast delivery of products
  • Asynchronous communication

But these behaviors wouldn’t matter as much if the infrastructure to support their shift didn’t exist. Here are five key reasons why DTC healthcare has exploded over the last four years. 

State laws have shifted toward telemedicine parity

Telemedicine is remote healthcare, and technically it’s been around since the 1950s when some aspects of healthcare could be conducted over the phone. 

But telemedicine as we know it now usually comes in the form of a video call or an app. What’s most important to know is that most states have now adopted telemedicine parity laws—meaning that insurers are required to reimburse a telemedicine appointment in the same way they would if the visit had been in person.  

In 2020, 22 states adopted laws that would require insurers to provide some reimbursement for telemedicine appointments, with 14 of those states adopting parity laws that would require full reimbursement. 

Source: 50-State Survey of Telehealth Commercial Insurance Laws

This doesn’t necessarily mean that DTC healthcare companies can’t operate in states without parity laws. It just means that patients who use services that would normally be reimbursed by an insurer would need to pay out of pocket. 

Deductibles have increased

Even in states that have partial parity laws, people may still be willing to pay out of pocket for certain slices of their healthcare. This is because insurance deductibles have been steadily rising for years, which has normalized the consumer process for healthcare from end to end.  

Premiums have increased by 55% since 2010—which is more than double the rise in wages or inflation over the same time period. In 2020, workers paid about a quarter of total premiums, which came out to $5,588 for family coverage.

It’s no wonder consumers barely blink when a DTC healthcare company charges $40 for a visit. 

Important patents have expired

Every year, pharmaceutical companies lose exclusivity on drugs. When that happens, other companies are able to produce generic versions of the drug, which contain the same active ingredients as the original. 

For example, in 2020, Pfizer’s patent on Viagra expired. But even before this happened, Pfizer signed an agreement with Teva Pharmaceuticals in December 2017 that would allow Teva to produce the first generic version of the drug in the United States.

When deals like these are made or when patents expire, the result is a more accessible, cheaper version of that drug. Roman, a men’s healthcare company initially focused on treating erectile dysfunction, launched in 2017—perfect timing for the availability of a generic version of Viagra. 

Reimbursement rates for doctors are decreasing

Changes in healthcare don’t only affect patients. They affect doctors, too. 

While not all healthcare professionals have seen a cut in reimbursement rates––in 2021, family physicians received a 13% increase––many physicians saw a 10% cut in the "conversion factor" that determines their fee-for-service Medicare payment. Most notably, emergency treatment providers will see a 6% payment decrease.

The long-term decrease in reimbursements have created a labor force of doctors looking for alternative sources of income. If you’re a DTC healthcare brand on the hunt for qualified physician recruits, there has never been a better time than now. 

HIPAA compliant software is more accessible

HIPAA-compliant software is the backbone of any DTC healthcare brand.

That’s because patient confidentiality and technology need to mix in such a way that someone’s health data is locked up as tightly as possible. HIPAA—the Health Insurance Portability and Accountability Act of 1996—is a set of regulations that govern how patient data is stored, handled, and communicated without compromising privacy.

If you’re handling any kind of patient data, HIPAA compliance is the number one thing you’ll need to figure out. 

But there’s good news—HIPAA compliance is easier than it’s ever been before. Apps that are largely responsible for supporting a great user experience—under Google and Amazon, mostly—are now HIPAA compliant. Even Slack has a HIPAA configuration for Enterprise users. 

All roads lead to convenience and transparency

So, where were we?

Telemedicine parity laws have hooked up reimbursements with digital healthcare.

Higher deductibles have normalized paying out of pocket for healthcare products.

Expiring patents have unleashed cheap, accessible drugs for all sorts of chronic conditions.

Lower reimbursements for doctors have created a robust physician labor force ready to work for DTC healthcare companies.

And new HIPAA-compliant infrastructure has made it easier for DTC healthcare brands to create fabulous user experiences that don’t violate patient confidentiality. 

These five ingredients work together to create an ecosystem for high-quality care that’s reasonably priced and convenient. 

So where’s the opportunity to differentiate?


DTC healthcare has come a long way … but it hasn’t come so far that ordering prescription drugs on the internet isn’t at least a little weird. 

That’s why companies like Ritual have doubled-down on transparency as a front-facing value prop. 

Source: Ritual

But how are podcast creators talking about DTC healthcare?

If you listen to podcasts, odds are you’ve heard a host talk about the benefits of at least one DTC healthcare brand.

DTC healthcare brands are some of the biggest spenders when it comes to podcast advertising. In 2020, BetterHelp held the top spot for podcast advertising by spending a whopping $38.7 million on that channel alone. (That’s the top spot for podcast advertising overall, not just in the DTC healthcare space.)

You can get a great sense of a brand’s core value by listening to the way podcasters talk about them. Here are four examples of podcast ads in DTC healthcare.  


From Small Town Murder, hosted by James Pietragallo:

They start by establishing credibility: “BetterHelp, they offer online licensed professional counsellors who are trained to listen and help.”

They communicate safety and convenience: “Connect with your counselor in a safe, confidential online environment. You just fill out a questionnaire to help them assess your needs and get matched with a counselor that you'll love in under 48 hours.” 

They empathize with their audience and attach a pain point to a feature: “You could exchange unlimited messages….Unlimited texting is so key because depression does not have a clock. That thing doesn't come every day or, ‘It’s Thursday, I guess I’ll be depressed today for my appointment.’” 

They seal the deal and finish with social proof: “So join the over one million people already using BetterHelp. In fact, so many people have been using BetterHelp that they’re recruiting additional counselors in all 50 states.”


From Talkin’ Baseball, hosted by Dallas Braden and Jared Carrabis

They start by empathizing with their audience about a sensitive topic: “Even the best baseball players strike out with the bases loaded … if you’re coming up short in the bedroom sometimes, it’s perfectly okay.”

They quickly highlight features that scream convenience and accessibility: “Free online evaluation, ongoing care, all from the comfort and privacy of your own home.”

They establish credibility: “A licensed medical professional will work with you and prescribe medication if appropriate.”

They reiterate the convenience factor: “Take care of your ED without leaving home.”


From I Weigh with Jameela Jamil

They start with transparency out of the gate: “We deserve to know what we’re putting into our bodies and why, and that’s why Ritual founder Kat Schneider is on a mission to reinvent the vitamin industry. Ritual is committed to showing you their nutrients, where it came from, and where they chose it. They call it traceability. Plus Ritual left out mystery additives, synthetic fillers, and shady extras.”

They connect with their audience’s pain points and offer a solution: “I’m lazy, irresponsible, busy, and tired, and really just a child stuck in an adult’s body. So anytime I can just pop something in my mouth and know it’s doing no harm and only good, I’m always happy.” 

They demonstrate the science behind their products to establish more credibility: “Clinical studies of their essential for women showed an increase in vitamin D and omega-3 DHA.”

They finish by demonstrating more transparency for a conscientious audience: “And for obsessive label readers, they use vegan certified, non-GMO, gluten-free, and allergen free ingredients.”


From Armchair Expert Mondays with Dax Shepard

They start by highlighting convenience: “hims is the one stop shop for all the needs of a man.”

They state a fact to support their offer: “66% of guys start losing their hair by 35. I started losing my hair when I was 28! I went and got myself a scientific, doctor-approved solution, and it worked. I’ve maintained my hair.”

They expand on their convenience benefit: “One stop shop for hair loss, skin care, and sexual wellness for men—it’s a veritable cornucopia of healthcare for men.”

They establish credibility: “Licensed physicians and FDA approved products to help treat hair loss.”

They reiterate convenience for a third time, and highlight the low price point: “hims saves you a trip to the doctor, saves you a trip to the pharmacy. This could cost hundreds if you went to the doctor or somewhere else.” 

Key takeaways

  • Convenience is king. Most DTC healthcare brands double-down on communicating convenience as a main benefit to convert. 
  • Credibility is just as important as convenience. It’s not yet normal to see a doctor online or chat with a licensed professional through an app. Until this becomes a norm, DTC healthcare brands need to work hard to establish credibility that’s on the same level as a family doctor. 
  • Empathizing with patient needs is a vital part of messaging. A lot of DTC healthcare brands deal with sensitive topics like erectile dysfunction and hair loss, which can be embarrassing for people to talk about. Reassuring patients that their needs are normal is key to making sure they listen to your messaging.
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