STAT+: How the wave of telehealth SPACs during the pandemic could create a ‘perfect storm’ for investors

In little more than a year, telehealth has gone from a backwater of American health care to a booming business. Billion-dollar valuations, once a rarity, are now common as companies seize on a dramatic increase in demand to raise money and enter the public markets during the coronavirus pandemic.

But the overnight change in fortunes for the industry is also raising alarms of a bubble, especially as more telehealth providers merge with shell companies known as SPACs — special purpose acquisition corporations — that offer a faster and easier road to going public. Experts in health finance said the rush to capitalize on sudden changes in supply and demand may cause companies and investors to overlook significant risks, such as a reemergence of regulatory barriers waived during the pandemic or clinical studies that may call the value or quality of telehealth care into question.

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STAT+: How the wave of telehealth SPACs during the pandemic could create a ‘perfect storm’ for investors

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