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From the Consultant’s Corner 11/29/16

November 29, 2016 News No Comments

The Potentially Big Business of Consumer-Directed Telehealth

If you think about it, health systems have used limited forms of telehealth for years. Take a typical radiology workflow, for example. Stored digital images are read by radiologists in distant locations, and reports from those radiologists are subsequently reviewed by the ordering physicians. More recently, clinicians have moved from such “store and forward,” asynchronous telehealth to synchronous telehealth that enables teleneurology for stroke victims in community hospitals, and teleICU for monitoring critically ill patients.

Why, then, all the recent excitement about telehealth? The answer is simple: For the first time, the patient is at the center of the decision to use telehealth rather than the clinician. Thus, telehealth is now as much about consumerism as healthcare dollars.

Driving Factors

Although consumerism has been slow to enter the healthcare environment, patient expectations are increasing. An astounding 98 percent of the population has Internet access, and 40 percent of adults have used an on-demand service such as Uber. Patients are looking for both convenience and access. The healthcare system has been a disappointment in both of those areas. Analysts predict a physician shortage of at least 90,000 by 2025. The national average wait time for a family practice physician is already nearing 20 days. Now that patients are paying more healthcare costs due to high-deductible health plans, they are demanding care that meets their convenience expectations.

Patients value high quality care when they want it, which includes having access to care during evenings, weekends, and holidays. According to Merchant Medicine, that’s one reason the number of retail clinics have grown from 258 in 2007 to 1,866 in 2015. In addition, cost-sensitivity means that price transparency and low cost have become as important to patients as whether or not their insurance is accepted. Taken together, these factors have weakened the allegiance to specific physicians in favor of convenience. It should come as little surprise that more than 75 percent of adults say they would use telehealth.

Employers also see the benefit of offering direct-to-consumer telehealth to their employees. The average telehealth visit is $75 less than an office visit, and can also reduce an employee’s time away from the office. More than 70 percent of employers report that they plan to offer telehealth in 2017.

Overcoming Obstacles

If patients and employers want direct-to-consumer telehealth, why hasn’t it taken off faster in traditional healthcare settings? There are four primary reasons:

1. Technology: Although telehealth technology is advancing rapidly, much consumer-facing telehealth is independent from traditional hospital IT infrastructure. Direct-to-consumer telehealth is offered to the market through companies such as Teladoc, Doctor on Demand, and American Well. Since EHR vendors have been busy with implementations, usability, and Meaningful Use, their technology is generally not as advanced as that of independent telehealth vendors. Therefore, bringing sophisticated telehealth into healthcare organizations requires either partnering with one of these vendors or integrating a telehealth platform into current IT infrastructures and clinician workflows. Either way, it is resource-intensive and requires clear strategy, funding, integration, and change management. Despite the complexity, healthcare executives acknowledge it is the wave of the future; the majority list implementing telehealth as a top priority.

2. Reimbursement: To date, Medicare only provides telehealth reimbursement through Medicare Advantage and for rural locations. Commercial insurance coverage is similarly limited. While proponents argue that increasing access at a low cost will improve healthcare quality and cost, payers worry that it may result in overutilization, thereby increasing costs.

3. State regulations: There are numerous interest groups battling over telehealth. Some are trying to restrict access, while others want to increase it. In some states, for example, telehealth can only be used after an in-person relationship with a clinician is established. Other groups are at odds over whether telehealth must include a live video component versus just a telephonic component. With state regulations changing rapidly, it is important to keep abreast of them prior to making significant investments.

4. Physician capacity: Physicians already are burdened with substantial administrative work and packed patient schedules. The waves of regulation from MU, PQRS, and now MACRA’s Quality Payment Program have resulted in enormous “change fatigue.” Even the technophile physician excited about telehealth finds adding new processes, technologies, and workflows daunting. With all that physicians need to do, it’s hard to tell them they must also compete with retail and telehealth vendors through on-demand, consumer-directed telehealth services.

Make no mistake: Deploying consumer-facing telehealth isn’t easy. Organizations need a clear strategy. However, those who figure it out sooner will certainly have an advantage. It’s time to get back to what patients want – convenient access to high-quality healthcare at a fair price from providers they can trust. By better engaging patients through telehealth, the industry should indeed become more efficient and effective.


Nancy Gagliano, MD is CMO of Culbert Healthcare Solutions in Woburn, MA.


Jenn, Mr. H, Lorre

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