Making Inroads into Telehealth: How One “Sub-Sector” of Healthcare Continues to Evolve (Part 2)

July 9, 2018
A longtime healthcare executive touches on how recent legislations could impact the telehealth sector, how providers and payers are feeling about telehealth today, all while offering predictions for the future.

Editor’s note: In part one of this two-part feature on telehealth, a healthcare attorney examines the changing policy and reimbursement landscape.

It was over 20 years ago when Michael Merson, then-CEO of Baltimore-based MedStar Franklin Square Medical Center, first started learning about and becoming interested in telehealth. At the time, Merson’s organization was part of a Johns Hopkins medicine-led intensive care monitoring pilot initiative that was centered around using virtual technology. 

The beta testing of the technology, from Visicu, a company that was later sold to Philips in 2007—and known for its eICU Program, which tracks ICU patients and provides monitoring of vital information— generated positive feedback from Franklin Square Medical Center’s employees. From there, after Merson left the provider world to become board chairman at Baltimore-based CareFirst BlueCross BlueShield, there was a belief on the payer side that since many smaller hospitals didn’t have dedicated intensivists, leveraging a technology like what Visicu offered could lead to safer care and better outcomes.

At that time, under Merson’s lead, CareFirst BlueCross BlueShield funded the installation of the technology at five rural hospitals in Maryland. Although there were stumbling blocks along the way, such as not getting enough cooperation from regional academic medical centers to provide the real-time monitoring and communication center support, for Merson, the results were startling. “I became convinced that [telehealth] was a way to go and that [folks in] conventional medicine would have a hard time accepting it because it did more than provide a resource for people. People felt threatened; they felt that the fee-for-service [revenue] that they were able to generate, and the teaching of in-house staff and training programs, would either be threatened or eliminated,” Merson recalls.

Nonetheless, the anecdote portrays just how long ago Merson started to feel strongly about telehealth. “In each of the institutions [I have worked in], I have insisted that we had a ‘telehealth task force’ to try to move forward in different areas in which it could be used,” he says. Now, working as a consultant at Yaffe & Company, based in Towson, Md., Merson says he is encouraging all clients, one way or another, to get involved in the sector and have money in their budgets to invest in telehealth. 

Below is a Q&A between Healthcare Informatics and Merson that touches on how recent legislations could impact the telehealth sector, how providers and payers are feeling about telehealth today, all while offering predictions for the future.

How does recent telehealth legislation—such as the CHRONIC Care Act of 2017—land for you? Do you see the bills as meaningful?

They are meaningful. The CHRONIC Care Act has teeth in it, but it’s also like gradually gnawing on a bone as opposed to going all the way by embracing it and doing it quickly. And the other side of it is that, in this fee-for-service to value-based care transition, most physicians are still being paid on the fee-for-service side. Value-based care is still in its infancy and consequently, even with the CHRONIC Care Act that is aimed at Medicare patients, its ability to push and transform the industry is mitigated by the continuation of a very high level of fee-for-service patients. Hence, there is skepticism that telehealth can be implemented on a cost-effective basis, and not be abused.

Michael Merson

Are providers more bullish on telemedicine than they used to be?

I think leading-edge providers and providers who are committed to higher-quality outcomes at lower costs, as well as the highest level of patient safety, are the ones who push it. But to be candid, most of mainstream medicine, whether it’s in nursing homes, home care, hospitals, or elsewhere, is still rendered in a very traditional manner. And most of the people live off the half-life of knowledge that they gained 15, 20 or 30 years ago. With all the emphasis on “keeping up or leading,” looking at the system as a whole, most people are not practicing that way. That’s not to say that nobody is, but it takes first-movers and innovators, and a combination of legislation and some form of financial incentives to really move the market. Things that should be transformational in healthcare generally take way too long.

Clearly, there are policy and reimbursement issues that need to still be worked out. Where do things stand with this?

The government is trying to protect itself, whether at the state or federal level, from excess utilization. But the other side of the equation is that each one of those “protective” measures inhibits innovation.

Are providers and commercial payers negotiating favorably? How are commercial insurers handling telehealth?

In the long term I see commercial payers as an ally. They have to be. Whether dealing with chronic care patients, congestive heart failure patients, or others, even if you cut off Medicare and look at the illness burden for a conventional health plan insuring people up to age 65, it is so high by such a small percentage of the population. And that population’s illness burden is typically filled with chronic care that necessitates ongoing coordination of care and ongoing monitoring of care.

And it is so labor intensive and so inefficient that when [payers] are competing in the marketplace on the price of a health plan, they have to be looking at ways to create efficiency—and much more so in this high-intensity population. In the commercial population, 8 percent of the people spend 65 percent of the [healthcare] dollars. The cost of health insurance is so overwhelmingly in the cost of care, which means utilization and excess utilization of physical medicine.

What are some telehealth predictions you can offer for the near future?

I am hopeful, but not hopeful that companies such as Berkshire Hathaway and Amazon joining forces to “create a health plan” in and of itself will change the market. Frankly, I think that telehealth has evolved small and unknown companies. Amazon and Apple, with the technology, they’re the ones that will have to force the lead, because it’s no longer about sitting in a room with a bank of monitors. Now a radiologist in Israel can be walking the streets and have a caseload of 10 images to review and pass judgement on off an iPhone, and do it accurately. That’s really where this has to go.

Healthcare providers are so slow to move and adapt. Unless disrupters can also disrupt the financing equation, and really force institutions to adopt or adapt to something new, it will take forever. But it shouldn’t be that way. I am hopeful that the bigger players will see interest in this and begin to drive change.

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