In a recent survey conducted by Harris Poll and commissioned by American Well, a telemedicine technology provider, 20 percent of consumers said they would switch their current primary care provider (PCP) if another PCP in their area offered telehealth visits. Among the 4,000 respondents to the survey who have a primary care physician, 65 percent said they were interested in seeing their PCP over video. Parents with children under 18 are even more likely to say they’re interested, with 74 percent interested in seeing their PCP through telehealth, according to the survey.
Telemedicine is not a new technology; in fact, it’s about 40 years old, according to Jonathan Linkous, CEO of the American Telemedicine Association (ATA). All the same, the use of telemedicine is accelerating very rapidly. “After decades of experimentation and pilot projects, we’re over the point of no return. I think we’re over the tipping point and we’re now at the point where it’s starting to transform health delivery.”
There is ongoing discussion about the consumerization of healthcare, and that impact is being felt now at healthcare organizations across the country, as consumer demand for the convenience of virtual visits and digital services is driving this acceleration of telehealth services.
“Consumers are very aware of the technology that is available. They see it on their smartphones every day. There is a growing expectation, then, that their healthcare providers are going to make use of this technology to advance the way that care is delivered,” Alan Perkins, principal at The Chartis Group, a Chicago-based healthcare consulting firm, says. The healthcare industry is hitting an inflection point where patient care organizations are now essentially competing with retailers, such as Walgreens and CVS, that are now offering telehealth services.
Alan Perkins
And while there continue to be barriers to telemedicine adoption, Perkins cautions, “Providers can’t wait for all the reimbursement or technical issues to be resolved, or they will be left behind as this consumer-driven change alters the healthcare landscape.” He adds, “So the providers that have been taking a wait-and-see approach, they need to start working now on an enterprise telemedicine strategy. A robust telehealth capability takes time, and as consumers increasingly come to expect these services, health systems need to be ready, and they need to be planning now.”
At the same time, there are rapid technological advancements as electronic medical record (EMR) vendors are building telehealth capabilities into their current EMR applications and into their native workflow designs, says Carl Dolezal, associate principal at The Chartis Group. “We have changed the landscape to the point where technology is no longer the barrier, but the enabler. Historically, we have struggled with stitching together networks and applications, and integrating devices with EMRs in the provider space. Developing telehealth through these systems that were, for the large part, not intuitive. But now with improved telehealth application capabilities and integration, some of which have actually been developed and supported by the EMR vendors, information is available with telehealth tools within their standard workflows, and that’s very important.”
For many patient care organizations, telehealth and RPM technologies are becoming just another tool in the toolbox for providing patient care. Health systems and providers using telehealth and RPM technologies are reporting significant benefits, in terms of improving patient care and lowering costs. Tele-ICU is now widely implemented, with about 30 percent of ICU beds in the U.S. connected to remote monitoring technology, Linkous says, and studies have shown that tele-ICU helps to reduce length of stay and improve patient outcomes.
At the Phoenix-based Banner Health, a 28-hospital health system, healthcare leaders built an in-home telehealth program targeting a subset of patients with complex chronic conditions following a successful tele-ICU program. The in-home telehealth pilot program, called the Intensive Ambulatory Care (IAC) program, focuses on the system’s most complex population, those diagnosed with five or more chronic diseases, according to Deb Dahl, vice president of patient care innovation at Banner Health.
Banner Health and its vendor partner, Royal Philips, studied the impact of the IAC telehealth initiative on patient outcomes, and the results showed significant decreases in patient healthcare costs and hospitalization rates. Specifically, an analysis of patient results over the first full year of the in-home AIC program revealed that the program helped to reduce overall costs of care by 34 percent, reduced hospitalizations by 49 percent and reduced the number of days in the hospital by 50 percent. Prior the program, there were 10.9 hospitalizations per 100 patients per month; after enrollment in the program, the acute and long-term hospitalization rate dropped to 5.5 hospitalizations per 100 patients per month. Additionally, Banner Health saw the 30-day readmission rate for that patient population drop by 75 percent—from 20 percent prior to enrollment to 5 percent after program enrollment.
Deb Dahl
Dahl says the average age of the patient in the program is 82—the very first patient had 20 chronic conditions and was taking 17 medications—and the real-time in-home monitoring is critical, as it provides clinicians with data on adverse trends, “so you can intervene before the adverse trend becomes an adverse event.” More broadly, telehealth can play a significant role in care coordination and care management, which is critical to a population health strategy.
“When you start your population health journey, you can say ‘I’m going to do wellness’ and that’s a pretty long payback period. Or, you can say ‘I’m going to focus on the more expensive group of folks and use those savings to bring in the next layer and the next layer,’” Dahl says. “So we looked at this complex chronic population and one criteria is that they have to have a $20,000 prior 12-month spend to get into the program. If we can reduce their total cost of care by 34 percent, then you can improve quality of life, reduce the number of hospitalizations, reduce the costs to them and to the plan. So we’ve done that quality of life and cost reduction and that allows us to move into another space, like diabetic patients.”
Building a Telehealth Strategy
While many in the industry still cite barriers to telehealth and RPM adoption, the drive to value, cost reduction and improved patient experience are all going to continue, industry stakeholders say. So as telehealth demonstrates that it advances those goals, reimbursement is expected to follow, Perkins says. “Regardless of what happens in the short term, providers need to be developing a clear telehealth strategy now.”
Perkins adds that reimbursement, in general, is a rapidly evolving area. According to the ATA, 31 states currently have telemedicine parity laws for private insurance and all state Medicaid agencies have adopted some type of coverage for telemedicine. “As for CMS [the Centers for Medicare & Medicaid Services], reimbursements are already changing as more and more telehealth services continue to be added to the list of reimbursable CPT codes,” Perkins says.
The more significant limitation on Medicare reimbursement is the requirement that the patient has to located in a health professional shortage area and must be physically present in the clinical setting. “This is changing, as a waiver to this rule is now available to participants in a Next Generation ACO [accountable care organization],” Perkins says. “So a patient participating in the Next Generation ACO can receive telehealth services in their home, and not be required to be in a rural area. So we’re seeing an openness to change there and those changes will likely accelerate.”
Carl Dolezal
Executive leaders at health systems need to be identifying and then acting upon opportunities to serve patients with telehealth. “There are some questions to consider, Perkins says, such as ‘What approaches would providers prefer? What are my payers covering or planning to cover? What is my competition doing?’” Additionally, healthcare executive leaders need to think about where the ball is headed to get a sense of what services the organization should develop and align strategy with reimbursement opportunities.
As telehealth use accelerates, Perkins says patients’ focus may move away from the provider of healthcare and more towards the service that’s being purchased, and that has a few implications for providers. “First of all, providers need to ensure that the care they are delivering is not perceived as a commodity, they need to differentiate themselves, and that differentiation can focus on superior quality, convenience, access to specialists, and outstanding patient experience. But they need to ensure that patients have a reason to choose them over the alternatives, other than simple geographic convenience.” And, he adds, “Providers need to offer telemedicine options to those that want them, so that their business model isn’t disrupted by those who are more adept at this new digital delivery of care.”
Many healthcare CIOs have a lot of work to do in developing and launching an enterprise telehealth and digital technology strategy, according to a recent survey by KPMG and the College of Healthcare Information Management Executives (CHIME). That survey found that only half of hospital CIOs have a clear digital business strategy and vision and only 39 percent of CIOs are currently working on a digital healthcare strategy. In that same survey, 38 percent of CIOs ranked EMR system optimization as their top priority for capital investment over the next three years, and 13 percent cited virtual/telehealth technology enhancements as a top priority.
“As the barriers to telehealth come down, whether those are technical or regulatory or reimbursement-related, patients are going to come to expect this as a normal part of healthcare delivery.” Perkins notes. “We are moving toward a future in which telehealth is not seen as something unique and different, but simply another option for healthcare delivery. For some types of patient-to-physician interactions, such as the ongoing management of chronic conditions, telehealth will be the natural choice.”
