So, it took a pandemic to get us to the tipping point for telehealth in the health and human service field. Virtual medical visits are expected to top 200 million this year, up sharply from the original expectation of 36 million visits for all of 2020. In March alone, telehealth visits surged 50% due to the pandemic emergency (see Telehealth Visits Are Booming As Doctors & Patients Embrace Distancing Amid The Coronavirus Crisis). Just for the week of March 28, telehealth visits have gone from about 10,000 a week to 300,000 (see The Doctor Will Zoom You In Now).
So what does this look like for provider organizations? Over just one week in mid-March, Cleveland Clinic saw a fifteenfold increase in telehealth visits, while Jefferson Clinic saw a twentyfold increase (see Surge In Patients Overwhelms Telehealth Services Amid Coronavirus Pandemic). A medical group in California, Sharp Rees-Stealy Medical Group, reports their practice has gone from 60 digital consultations a day (before the pandemic) to more than 2,400 per day, a nearly 4,000% increase (see Sharp Rees-Stealy Sees 3,900% Increase In Telehealth Appointments).
To facilitate this, there have been many changes in rules. On March 17, 2020, the federal Department of Health and Human Services (HHS) Office of Civil Rights (OCR) announced that during the COVID-19 public health emergency, penalties would not be imposed on provider organizations that offer telehealth services using popular video chat applications that may not fully comply with the privacy requirements of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The enforcement discretion will last for the COVID-19 public health emergency (see Feds Will Not Enforce Use Of HIPAA-Compliance Telehealth Platforms During The Pandemic Crisis).
Medicare has changed several rules limiting telehealth. Telehealth is no longer limited to rural areas. Consumers no longer need to have a physical visit with a professional before having a virtual session. Medicare will temporarily pay professionals to provide telehealth services for beneficiaries residing across the entire country, waiving state licensure requirements, and beneficiaries will be able to receive a wide range of new services through telehealth including office visits, mental health counseling, and preventive health screenings—CMS Expands Telehealth Benefits For Medicare Beneficiaries During COVID-19 Outbreak.
A number of states have changed Medicaid plan rules—34 States Approved For Medicaid 1135 Waivers During COVID-19 Public Health Emergency. Health plans have also changed rules. For example, Avera Health Plans is waiving member costs for all telehealth benefits through June 14 and all independent and locally operated Blue Cross and Blue Shield companies are also waiving cost sharing for telehealth services for fully insured members for the next 90 days (see Health Insurance Providers Respond to Coronavirus (COVID-19)).
I don’t think we are likely to see consumers return to face-to-face services in large numbers any time soon. Part of it is consumer fear of the coronavirus. But, part of it is that consumers like the convenience of telehealth. And payers see the benefits. Take the recent statement by the head of the Centers for Medicare and Medicaid Services, Seema Verma, “I think the genie’s out of the bottle on this one. I think it’s fair to say that the advent of telehealth has been just completely accelerated, that it’s taken this crisis to push us to a new frontier, but there’s absolutely no going back.” (see The Genie’s Out Of The Bottle On This One: Seema Verma Hints At The Future Of Telehealth For CMS Beneficiaries).
And as a consumer, I’m all in on the virtual health service bandwagon. Five years ago, I left my primary care physician for a ‘new doc’ who offered to do all my service electronically. I love it! But provider organization executives need to think about the business implications of the ‘all virtual’ future—and prepare now.
Even provider organization executives are also embracing the shift to virtual care. I’ve been on more than one call this week where executives are already talking about the benefits of getting rid of facilities and reducing office space in a future of all things virtual. However, as services move to virtual platforms, this represents, from a business model perspective, the “outsourcing” of services from traditional delivery systems.
Virtualizing services separates the consumer’s purchase of a service and the clinical professional from the “place of production.” This sounds innocuous but it has significant strategic and marketing implications. A consumer can select from a statewide (or national or international) array of options for on-line clinical services. A service provider organization is competing statewide (or nationally or internationally) for talent. And without place, every service will be priced on a commodity basis (the lowest price for an undifferentiated service) unless the service provider organization can demonstrate—virtually—the superior value proposition of what they have to offer.
For executives of traditional service provider organizations that have moved their services to virtual, my strategic question is this—when the crisis subsides, what are you going to do to keep your consumers and your payer contracts? Suddenly, both are up for grabs—with three key types of competitors. First, any provider organization in a state (or in the nation, depending on licensing specifics) can offer your consumers and your health plans their services. Hospital systems, physician practices, federally qualified health centers, community mental health centers, and others are going to be offering virtual services outside of traditional geographic service areas. Second, there is a whole host of all-virtual health care delivery systems that have been waiting for the tipping point to happen in telehealth and it has arrived. Talkspace, Ginger, Big Health, Modern Health, Lyra Health, Chess Health, and many more. Lastly, and most significantly, expect the virtualization of health care services to attract out-of-industry competition from the likes of on-line giants like Amazon, Walmart, Google, and Facebook.
How do you keep those consumers and those payer contracts? The answer is readjusting your strategy and your value proposition for the all-virtual post-crisis market. There are fundamental questions that need to be answered in every organization’s post-crisis recovery plan. What is your price point for services? And, more importantly, what are the benefits that you offer in an all-virtual service world? Superior access, better self-service tools, a highly specialized set of clinical stars, a brand name with cache, a hybrid service, or something else? And do you have the push/pull marketing strategy that you need to both get those payer/health plan contracts and generate referrals through your on-line marketing?
I think that the delivery of a large proportion of health services on virtual platforms is going to be the “post-crisis normal.” (And I’m not the only one. I think the pending purchase of AbleTo by Optum says a lot—see Optum Reportedly Finalizing $470M Purchase Of Virtual Behavioral Care Company AbleTo.) But health and human service provider organizations need to anticipate the challenges of a creating a sustainable competitive advantage and business model in this new market. My colleague, Tim Snyder, in his web briefing today, Going ‘Virtual’ For Revenue Generation: Assuring Consumers & Referral Sources Can Find You – An Overview, outlined a framework for virtual marketing in a virtual care world.
After much waiting, the telehealth tipping point has arrived. The landscape will ‘tip’ with it—as must health and human service business models.
And don’t miss the recordings of these previous briefings: