I’ve spent a lot of time the past two weeks working with provider organization executive teams on strategy. The focus has been how to get organizational strategy on track—specifically how to change the current strategy (pre-pandemic) to a strategy that will be relevant to and sustainable in the post-crisis period.
But there is one common misconception that is troubling. Almost every executive team member keeps talking about being forced to use telehealth as proof of their organization’s ability to “innovate.” And I’ve heard more than one say that their “recovery strategy”—their big change for the future—is to move to all-virtual services for consumers and get rid of their office space.
There are two problems with both statements. The first, and most fundamental, is that reacting to a situation—developing an emergency plan to maintain consumer services and maintain revenue—is not evidence of an organization’s ability to innovate. It may be grueling, it may have required big changes, it may have been expensive, it may have required creativity—but it is not innovation. Innovation is “translating a new idea into a service that creates value.” And as I’ve said before, in a turbulent market with many moving parts, the “innovations” that health and human service organizations need to maintain their competitive advantage are more likely to be “bold new moves” rather than “tweaks” to current services (see Innovation By Design: Capturing Value In Health Care and What Does It Take To Outlast The Disruptors? Building A New Strategy For A New Market).
Across the specialty health care space, the adoption of new service types is slow. And our Innovation Adoption Among Specialty Provider Organizations: The 2020 OPEN MINDS National Innovation Survey found that the biggest change in innovation adoption, since 2019, has been in telehealth. Seventy-eight percent of specialty provider organizations are now using telehealth, a 25% increase over 2019. The biggest changes in specialty provider organizations, other than telehealth, were an 8% increase in the use of computerized cognitive behavioral therapy and an 11% drop in the number of organizations providing readmission prevention programs. It is clear that specialty provider organizations are not successfully bringing innovative programming to market. Any increase in new program adoption is minimal. Some programs are not finding success in the market and are being discontinued.
The second problem is one of strategy—should organizations bet on providing generic fee-for-service telehealth services as a sustainable service line for the future? With telehealth right now, staff productivity is up and costs are down with no office space. But there are three market factors not yet sorted out—coverage, competition, and rates.
The telehealth coverage landscape is unclear. What services will be covered past the pandemic emergency? Will audio-only (telephone) service continue to be paid for? For each payer/health plan, which consumers will be eligible for which services—and how many services? Will licensure reciprocity (eliminating the need for a state-specific license) survive the pandemic? Will telehealth be reimbursed at the same fee-for-service rate as face-to-face services?
The competition is growing. The race for telehealth market share—in behavioral health and all other services—is hot. There are three types of competition. First, large provider organizations have expanded their “geographic offering” of telehealth services (see Sigma Mental Health Urgent Care Expands Telehealth Statewide In Texas, LifeSkills Receives $490,000 For Telehealth Upgrades and Spero Health Opens Ohio Clinic Offering Addiction Treatment With Telehealth Services).
Second, dozens of companies, with significant new financing and contracting are offering primary care services and behavioral health services by telehealth nationwide (see Humana Invests $100 Million Into Heal’s Telehealth Platform, Announces National Partnership and Sun Life Invests $32.7 Million In Telehealth Startup, Dialogue).
Third, there are a growing number of digital tools with FDA clearance that can provide some components of clinical services without a clinical professional (see Ready For The Digital Health Revolution? Note: It’s Not Just Telehealth and Optum Leads $26 Million Funding Round For Digital Therapeutics Startup Kaia Health).
The reimbursement rate is changing and dropping. The concerns that payers have about liberalized telehealth is increased expense (and potential fraud)—lots of uncontrolled fee-for-service billing for lots of consumers by lots of clinical professionals. I think what we are likely to see is “telehealth services” bundled in service packages that are financed using case rates or capitation. For example, Cigna announced that their 14 million consumers enrolled in employer-sponsored plans can talk and text with licensed therapists, and schedule live video sessions based on personal preference (see Cigna Adds Talkspace To Its Rapidly-Expanding Virtual Network). Kaiser Permanente, UCSF School of Medicine, Midland Care and numerous Programs of All-Inclusive Care for the Elderly (PACE) providers are integrating telehealth within their services (see Grandpad Expands Footprint In Healthcare Through Partnerships With Leading Healthcare Providers).
One example is Heal’s recent announcement of a monthly subscription program to provide an “affordable in-home primary care option for individuals who are uninsured or underinsured.” For $49 per month, Heal Pass enrollees receive eight telehealth visits a year with optional house calls if needed (see Heal Launches New ‘Health Assurance’ Offering). And last year, Doctor On Demand, a virtual care provider organization, and Humana announced the launch of On Hand, a health plan that allows consumers to have one dedicated primary care physician and access to preventive care, chronic care, urgent care and behavioral health all through convenient video visits (see Doctor On Demand & Humana Launch Virtual Primary Care Plan).
In addition, several large employers are purchasing telehealth services for their employees directly from these national virtual delivery systems (see Starbucks Selects Lyra To Provide Mental Health Services For Its Employees). Others like Target, PwC, GE, and Salesforce have been contracting with virtual therapy, meditation, and sleep apps to provide free access to employees (see 10 Companies Boosting Benefits So Employees Don’t Feel Isolated Or Lonely In The Middle Of The Coronavirus Crisis and Meditation App Headspace On Track To Double Corporate Clients, Bring Mindfulness To Work). This will decrease demand for outpatient services outside of those channels.
So what do these developments mean? All I’m saying is that, for sustainability, provider organizations need to look beyond just converting current services to delivery via telehealth. Sustainability is going to come with a new model—with the “next big thing” that is going to distinguish provider organizations in the market. That is at the heart of a recovery strategy.
My colleague, OPEN MINDS Executive Vice President Kim Bond, a former chief executive officer of a community behavioral health center, has some advice for executives thinking about strategy: “Telehealth is not innovation, it’s just another form of the same service. But innovation is essential when you consider the shifts in the landscape. Even if you’re tired and your teams are about to mutiny, you need to bring bold changes that will carry the organization forward after the emergency period ends.”
For more, check out these resources on innovation in The OPEN MINDS Industry Library:
- New Service Line Development: The OPEN MINDS Step-By-Step Approach To Developing Innovative Programs
- How To Develop A New Service Line: An OPEN MINDS Seminar On Building A Diversification Strategy & Conducting A Feasibility Analysis
- Necessity Is The Mother Of Invention: Innovation In A Crisis
- The Mental Health Center Of Denver’s Innovation Technology Lab Program: An OPEN MINDS Program Profile
- Leveraging Virtual Capacity & Moving To Use Cases Beyond Therapy
- A Guide To Implementing Innovation
- Robots As A Staffing ‘Force Multiplier’
- Technology As A Game Changer For I/DD Support Services
- Innovation Success In Three Steps
- Designing & Implementing Innovative Treatment Programs: An OPEN MINDS Executive Summit & Showcase
And for even more join us virtually on August 26 for The OPEN MINDS Care Innovation Summit: Solving The Problem Of Access For Consumers With Complex Care Needs. The Summit is part of The 2020 OPEN MINDS Management Best Practices Institute and attendance is free for Elite members of the OPEN MINDS Circle.