Walmart has found a novel way to reduce health care costs, lowering the price for telemedicine visits to $4 from $40, according to recent reporting in The Denver Post. The retail giant made the change Jan. 1 for the more than 1 million employees and family members covered by its insurance.
Walmart offers telemedicine services through San Francisco-based Doctor on Demand, which was launched in 2012, offering services directly to consumers. Doctor on Demand now contracts directly with employers, including Comcast, Wells Fargo and American Airlines, and health insurers such as UnitedHealthcare, Humana and Harvard Pilgrim Health Care.
We’ve been exploring the telehealth industry for a client since late last year, so we took notice when we saw this bold move by Walmart. This week’s special issue of Our Take dives into the world of telemedicine, sharing the top five things we’ve learned so far.
1. What is telemedicine?
There are exceptions, but telehealth companies generally focus on being either a technology provider or providing actual health care services by a physician. On the technology side, there are companies that provide everything from high-tech scales in the home to video-enabled carts that are wheeled from room to room in the hospital. Service providers, on the other hand, fall into two general categories: those that provide virtual house calls to people with minor conditions—replacing an in-person visit to the clinic—and those that provide acute services to hospitals, such as tele-stroke and tele-hospitalist services. The industry itself is only about 15 years young and has experienced rapid growth over the last several years.
2. Who are the major players?
Two of the largest technology providers are Goleta, Calf.-based InTouch Health and American Well, headquartered in Boston. The InTouch OS is built on a global network infrastructure with a patented software and network technology to ensure reliable connectivity; the company says it curates 99.95 percent network uptime. Through a variety of partnerships, InTouch also sells hardware to hospitals, like the aforementioned video carts.
American Well powers telehealth solutions for over 130 health systems comprising 2,000 hospitals, 55 health plans and 7,000 employers, and covering over 150 million lives. Both InTouch and American Well—recall the exceptions we alluded to earlier—also employ physicians for telehealth services.
Reston, Va.-based SOC Telemed is another large and rapidly growing telemedicine provider with its own technology platform focused on services for hospitals, including tele-neurology, tele-psychiatry and tele-ICU. The company was the first provider of acute clinical telemedicine services to earn The Joint Commission’s Gold Seal of Approval and has maintained that accreditation every year since inception. SOC Telemed is backed by Warburg Pincus and CRG.
While most hospitals have adopted some mix of telemedicine services, several large health systems have developed their own programs in-house. Mercy’s Virtual Care Center, in Chesterfield, Mo., is a four-story, 125,000-square-foot facility that houses more than 300 employees, many of them physicians and advanced practice clinicians, but no patients. The inside of the facility—you can take a virtual tour—resembles a NASA command center. Mercy says it’s the largest single-hub electronic intensive care unit in the nation, providing “a second set of eyes to bedside caregivers in 30 ICUs across five states.”
You’ll also find substantial in-house telemedicine programs at Jefferson Health, Providence St. Joseph Health, Johns Hopkins and Avera Health.
And we mustn’t forget Kaiser Permanente, which has the largest primary care-focused telemedicine program in the nation. In 2016, for the first year ever, more than 50 percent of the interactions between Kaiser’s patients and health care providers were done virtually.
3. What’s driving the growth?
Several factors are contributing to the rise of telehealth, depending largely on the type of service being provided. The rise of consumerism in health care, which has in part driven equally explosive growth in outpatient clinics, is what’s leading more consumers to turn to their iPhones for a virtual visit. To be clear, most industry observers would agree that consumers haven’t adopted telemedicine on a large scale yet, but the number of users is increasing every year. Here’s what Accenture had to say in its recent digital health consumer survey
“When thinking about non-traditional health care services (emerging types of service delivery—i.e., walk-in or retail clinics, outpatient surgery hospitals, virtual health, on-demand services or digital therapeutics), many patients are “very satisfied” and “extremely satisfied” with the level of transparency, convenience, effectiveness, efficiency and cost of those services. More than half of patients surveyed expect digital capabilities—and these expectations increasingly influence who patients choose in a provider.”
For acute services such as tele-stroke, virtual clinicians solve a supply-and-demand problem. At most hospitals, there simply aren’t enough neurologists to be staffed 24/7. When patients present in the emergency room with stroke-like symptoms, they need care fast. A four-person team of neurologists can be on call for 10 times as many hospitals, and can serve multiple patients at the same time, through a video cart.
And then there’s risk. Systems like Kaiser Permanente are responsible for managing every bit of the health care dollar. If virtual visits cost less than in-person visits but offer the same level of quality, it makes sense to drive patients to telehealth. That’s true whether you’re a payer, like Humana, or an employer, like Walmart.
4. There must be challenges, right?
Any industry as young as telemedicine faces growing pains. Probably the biggest challenge is getting paid for services. Thirty-five states and the District of Columbia have “parity laws” that require equal payment for virtual care. But these laws are evolving, and their enforceability is questionable.
Some good news came for Medicare patients with the 2017 CHRONIC Care Act, which will expand telehealth services to beneficiaries with chronic illnesses. In 2020, Medicare Advantage plans can expand their telehealth options, and ACOs will be able to be reimbursed for a variety of telehealth services.
Another issue is technology integration. Go to any one of these telehealth companies’ website and they will tell you that they fully and seamlessly integrate in the background with the hospital’s EHR and billing system. That’s simply not true, at least not in the sense of complete integration. Virtually all of the telehealth executives we talked to said that they are working on improving their level of integration for their hospital clients.
5. What’s next?
No one really knows, other than growth will continue for the foreseeable future. According to The Denver Post, research firm IHS Markit estimates that telemedicine visits in the U.S. will increase from 23 million in 2017 to 105 million by 2022. Still, that amounts to only about one in 10 physician visits.
Tele-stroke has been the fastest-growing category of telehealth services to date. In light of recent legislation and insurance changes, one telehealth executive told us, “Every hospital in the country now wants to be certified as a stroke center for reimbursement and liability.”
We see tele-behavioral health as being particularly ripe for growth, as patients may feel more comfortable speaking to a professional from home. And we know that behavioral health resources are among the most stressed of all aspects of patient care.
Telemedicine, we’ve found, is one of those industries that screams win-win-win. Better access, lower costs and happier patients. Isn’t that what we all want?
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