With the rise of consumerism in healthcare, and with providers and payers seeking greater efficiency, the age of telehealth now is dawning. Market analysts project the telehealth market will grow from $2.78 billion in 2016 to $9.35 billion in 2021–more than a 333% increase over five years.
The term “telehealth” refers to the provision of health-related services using telecommunication technologies rather than face-to-face provider-patient interaction. Generally speaking, there are four categories of telehealth services:
(1) Video conferencing utilizes two-way interactive audio-video technology to connect a provider and a patient when real-time interaction is necessary.
(2) Store-and-forward technologies allow for the secure electronic transmission of clinical data in the form of digital images or documents.
(3) Remote patient monitoring uses digital technologies to collect health data (e.g., a patient’s blood pressure or insulin level) from an individual in one location, and electronically transmit that information securely to a healthcare provider in a different location for assessment and recommendations.
(4) Mobile health–commonly referred to as mHealth–involves the provision of healthcare services and personal health data via mobile devices.
There are four key trends that will drive the growth of telehealth in 2017 and beyond:
(1) Shifting consumer attitudes
(2) Growing specialty service offerings
(3) New incentives for care management services
(4) Expanded telehealth reimbursement
Shifting Consumer Attitudes
Consumers are re-thinking what it means to “go to the doctor.” A recent American Well consumer survey estimates 50-million Americans are willing to switch primary care providers to gain access to virtual visits, compared to just 17 million in 2015.
In the same survey, 60% of respondents indicated their willingness to use online video visits to manage their chronic conditions; 52% would use such virtual visits for follow-up care after a surgery or hospitalization, and 78% would use these visits to obtain prescription re-fills. Another recent consumer survey found that 84% of respondents would choose a virtual visit over an emergency room visit for a minor ailment.
Additionally, as high-deductible healthcare plans become more common, virtual visits offer consumers a way to save on out-of-pocket expenses. Many providers now are advertising $49 urgent care virtual visits available 24/7, compared to far more costly (and far more time-consuming) physician office and urgent care center visits.
And providers now find themselves in competition with insurers offering low-cost or no-cost virtual visits within plan benefit structures as a means to avoid higher-cost in-person services. Many insurers now are using centralized call centers to provide this service, as opposed to contracting with local providers.
Growing Specialty Service Offerings
While most virtual visits involve primary care services, there is enormous opportunity in specialty care. One example is DermatologistOnCall, a virtual care site that affords patients 24/7 access to more than 250 online dermatologists. A patient simply creates a profile, fills out a questionnaire, and uploads photos of the affected area. Within minutes, the patient receives a diagnosis and care plan from a board-certified dermatologist (unless additional examination is required).
In addition to direct-to-consumer services, struggling rural hospitals are relying more on specialist consultations. More rural hospitals are looking to outsourced diagnostic analysis and telepharmacy services to improve access to care and bring new revenue to the hospital. Additionally, interactive teleconferencing between staff in rural emergency rooms and remote specialists at larger urban hospitals, such as the Avera eCare program, improves rural hospitals’ outcomes and bottom lines by allowing them to care for patients who previously would have been transferred.
New Incentives for Care Management Services
In 2013, Medicare began paying for transitional care management, followed by payment for chronic care management in 2015. Now, in 2017, Medicare has significantly eased the rules for providing and billing for chronic care management.
This new reimbursement for non-face-to-face care management services has significantly increased providers’ interest in different forms of remote patient monitoring, as these payments can fund the staff and technology needed to provide such monitoring. Now, for example, a patient with heart failure can weigh himself daily, with data from the scale automatically transmitting to his physician’s office. The practice’s care managers monitor this information, alerting the physician to any sudden weight changes indicative of potential complications.
Also, as more providers move toward participation in alternative payment models (such as shared savings arrangements and episodic payments) in part due to the new Merit-Based Incentive Payment System, these programs’ incentives to reduce overall costs of care also are driving interest in remote patient monitoring. Now, rather than waiting to respond to the next high-cost acute episode, providers are using telehealth to monitor patients and prevent those episodes.
Expanded Telehealth Reimbursement
According to an April 2017 report published by the General Accounting Office (GAO), Telehealth and Remote Patient Monitoring Use in Medicare and Selected Federal Programs, less than 1% of Medicare beneficiaries received telehealth services between 2014 and 2016. The primary culprit, according to the GAO, is the lack of Medicare reimbursement for these services.
Under current law, Medicare only pays for virtual visits if the patient is located in a rural or health professional shortage area, and only if the patient is present at a specific location (not including the patient’s home). There is presently no Medicare reimbursement for services involving store-and-forward technology or remote patient monitoring.
Historically, commercial insurance companies and state Medicaid programs have shared Medicare’s reluctance to pay for telehealth, but several payers now are recognizing its value. For example, Cigna, United Healthcare, and Blue Cross Blue Shield affiliates implemented new or expanded reimbursement for telehealth services in the last two years.
Additionally, rare bipartisan legislation now making its way through Congress would expand Medicare reimbursement for telehealth. The Telehealth Innovation and Improvement Act, introduced by Senators Cory Gardner (R-Colorado) and Gary Peters (D-Michigan), would eliminate many of the restrictions on Medicare reimbursement for telehealth. Also, the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act has been re-introduced. Among other things, the CHRONIC Care Act would provide expanded telehealth reimbursement to participants in Medicare Shared Savings Program accountable care organizations.
It appears the stars are aligning for telehealth to have a break-out year in 2017. PYA can assist your organization in evaluating telehealth opportunities and challenges, as well as in developing and implementing your telehealth strategy. For more information, contact Scott Clay at email@example.com or Martie Ross at firstname.lastname@example.org. Both may be reached at (800) 270-9629.