Why Telehealth is At an Inflection Point

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By Tricia Lee (Wilkins) Rolle, PharmD, MS, PhD
Government Affairs and Health IT Strategist

For the past couple of years, we’ve watched the availability of virtual visits grow at alternative sites of care, such as drug stores and retail clinics. In like fashion, telehealth has quickly gotten off the ground and adoption has skyrocketed. We believe it’s reached an inflection point. Adoption of telehealth services reached a record high in 2019 of 85% for inpatient settings and about 44% for physician offices. Now, patients and providers have access to virtual visits 24/7 in a range of settings.

The potential demand for telehealth services is impressive and indicative of its growing importance: 84% of commercially insured patients would opt for video or online services if available. It is estimated that some 15 million Americans will have services provided by telehealth this year, which could amount to 50 million visits. Consider the potential reach now that companies such as cable provider Comcast and networking behemoth Cisco have entered the market to establish partnerships with insurers and telehealth companies. In the not so distant future, patients will be able to access Telehealth solutions as easily as they turn on their TVs.

So why has telehealth gained so much ground so quickly? Here are some of the drivers.

  1. Cost savings. A growing body of evidence suggests telehealth creates considerable cost savings for patients and providers. For example:
  • Virtual visits typically cost $45, compared with $100 for an in-person visit at a doctor’s office or $160 at an urgent-care clinic. This is helpful for patients with high deductible plans and could get them care that may avert hospital and emergency room visits.
  • March 2017 report by The Rural Broadband Association suggests telehealth use could result in big savings for hospitals, primarily through improved efficiencies. While the average savings from telehealth per medical facility is estimated at $20,841, it jumps to an estimated $104,564 per facility in California. Savings vary based on the size, clinical capacity and payment model of each organization and result from factors such as delivering care in a lower-cost environment, leveraging automation and using midlevel providers to provide appropriate services instead of more expensive providers. There also is growing evidence that telehealth is reducing hospital readmission rates and emergency room visits, and it’s helping hospitals retain patients. According to a recent white paper, a rural hospital that implemented a telecardiology program realized an estimated positive financial impact of $1.6 million per year, largely due to increases in patient volume and an ability to retain patients who would have otherwise been transferred to another facility.
  • Telehealth created substantial efficiencies and savings at the Department of Veterans Affairs (VA). The annual cost to deploy the telehealth program in 2012 was $1,600 per patient per year, compared to over $13,000 for traditional home-based care and over $77,000 for nursing home care. This kind of cost-savings may allow people to age-in-place while still getting the care they need. That goes for all patients, not just those in the VA system.
  • In the case of Medicare, a study found that telehealth services provided by physicians during off hours — specifically weeknights and weekend days — could result in 15 fewer rehospitalizations annually for individual nursing homes, which could save Medicare some $151,000 per facility each year.

The list goes on and on, fueling the attractiveness of telehealth.

  1. Convenience. Consumers want convenience of telehealth services, liking the availability of 24/7 access to care in a setting of their choice. It also reduces the need for travelling long distances or being transferred to another health care facility. A study of virtual visits over 17 years at the University of California at Davis found a little over 19,000 telemedicine visits saved 11,281 individual patients nearly nine years of travel time, five million miles and $3 million in costs.
  2. The need for increased access to care. Virtual visits are seen as a way to provide access to care for hard-to-reach and underserved populations. For example, it is seen as an option for the growing number of elderly with chronic conditions. They typically have mobility issues, which impede their ability to access necessary and frequent visits to clinicians. Ensuring ready access to care for such individuals may help avert costly emergency room visits or hospital stays. Telehealth can open doors to access to primary care, mental health services and specialists to millions in nursing homes, jails and rural areas. There also is expected to be rapidly growing demand for telehealth services for opioid and other substance use disorders, including counseling and virtual rehab.
  3. Increased health system adoption. Payers and health plans are jumping on the telehealth bandwagon.
  • At the top of the list is the VA, which operates with the largest telehealth program in the country. It’s continually expanded its telehealth footprint by removing administrative barriers; adding sites of care; and creating private-sector partnerships with technology companies and others. It recently partnered with Walmart and T-Mobile in a program to reach underserved veterans.
  • Commercial payers — including Aetna, Anthem, Blue Cross and Blue Shield, and United Healthcare — are constantly adding telehealth benefits to provide access to care, with the goal of keeping beneficiaries out of hospitals and emergency rooms. They also are looking to virtual visits to improve care coordination, patient engagement, beneficiary satisfaction, and healthy behaviors. Many of these are metrics for those participating in value-based care arrangements.
  • Employers are adding more telehealth benefits. Data from the National Business Group on Health reveal that 96% of employers offer some kind of telehealth benefits. More than half are adding virtual behavioral health visits.
  • Most state Medicaid programs cover telehealth services, although coverage varies from state to state.
  • Medicare has lagged in telehealth adoption and reimbursement. However, that is changing with the continual introduction of bills that would expand the scope of telehealth coverage and policy changes by the Centers for Medicare and Medicare Services (CMS). For example, CMS recently announced a final rule, which allows Medicare Advantage patients to receive healthcare services from places like their homes, rather than requiring them to go to a healthcare facility.
  1. Physicians are embracing virtual visits. Physicians are adopting telehealth at a rapid pace; it more than tripled between 2015 and 2018. The survey estimates that nearly 600,000 physicians will be using telehealth in 2022. Reasons include convenience, resolution of reimbursement issues, availability of technology and reduction in administrative burden. Availability of virtual visits also is a way to create competitive advantage and expand the patient base.
  2. Technology. The technology needed for various telehealth services has expanded and is marked with innovation. Internet access and broadband availability are nearly ubiquitous. Work continues rapidly to connect pockets without such access, primarily in rural areas. Patients can be connected to four kinds of telehealth services: video conferencing, remote monitoring, electronic consultations and wireless communications. The latter includes mobile health, which is a rapidly growing and innovative platform.

As documented in Point-of-Care Partners’ ePrescribing State Law Review, states are increasingly incorporating telehealth. In addition to defining the telehealth prescriber-patient relationship and which prescribers can prescribe via telehealth, states are adding various provisions in areas such as patient documentation, ePrescribing and controlled substances. The State Law Review also records rules for when patients, prescribers and pharmacies are all in different states.

To be sure, telehealth still has challenges that must be addressed. They include wider Medicare participation and reimbursement; telehealth licensing issues across states, including for pharmacists and nurse practitioners; reimbursement parity for virtual visits; the digital divide; and broadband access. Point-of-Care Partners is monitoring telehealth legislation and implementations. For information on legislation, please contact our regulatory team at regulatory@pocp.com. I would be happy to discuss the telehealth landscape and drivers at the federal level. You can reach me at tricialee.rolle@pocp.com.