Sg2 Letter: On the Road to Virtual Health
Are we there yet? On your annual family road trip, this question sounds all too familiar. At Sg2, we continue to hear this question every day as it relates to virtual health (ie, telehealth, e-health, mobile health). It’s a hard question to answer. No one is quite sure where the destination is and no one has a complete road map yet. Still, if the journey toward harnessing the potential of virtual health can be called a road trip, we are probably approaching the first rest stop, and there’s much to report.
Dozens of Sg2 members have begun developing and deploying their virtual health strategies, and each strategic road map is a bit different. The scope of the strategies varies dramatically from market to market, including everything from web portals to virtual consults to clinical mobile apps to virtual multispecialty care. While the clinical offerings differ across organizations, program goals are remarkably consistent. Most health systems are trying to achieve 3 objectives: improve channel access, create a consumer focus and enhance population management. Developing direct-to-consumer programs is the top priority for most of the organizations that have contacted us.
Many health systems, now deep into negotiations with a vendor partner, find discussions slowing as contract fees and EMR integration are put on the table. Sg2 cautions providers that they should expect to lose $100,000 to $500,000 per year for the first 2 to 3 years, depending on the program size and vendor partner. You should take this particular side trip not for the return on investment (ROI), but to bring new patients into the system, to increase market share and to begin to move the system toward a broader virtual health vision.
Rules of the Road
If you want to embark on this journey, you are going to need one or more driver’s licenses. Eighteen states have joined the Interstate Medical Licensure Compact, which enables clinicians to provide virtual health services, but other states have created a variety of roadblocks regarding who can provide care and when they can provide it.
If you subscribe to our weekly Virtual Health Update, you know that the rules and regulations surrounding virtual health change weekly. Dozens of states have enacted so-called parity laws that require commercial and Medicaid reimbursement for certain services. The list of services differs by state, as does the amount of payment offered to providers.
Reimbursement continues to evolve. Commercial payers and large employers are gradually adding menus of reimbursed virtual services, but payment is typically only 40% of face-to-face fees. Medicare offers reimbursement (with geographic restrictions) for virtual chronic condition management and has recently proposed additional payment codes for end-stage renal disease, advanced care planning and virtual critical care consultations.
If all this sounds confusing to you, you are not alone. Sign up for our September 7 webinar on the ever-changing virtual health legal and payment landscape and we’ll do our best to explain what you need to know.
We’re Lost. Now What?
Many providers have told us that they started certain virtual health programs simply because one physician wanted to lead the effort. Now more physicians have come to the table, and there are just too many options for what to do next.
In these cases, we recommend that you pull off the road and start a formal virtual health planning process. This process should include a variety of inputs, including Sg2’s Impact of Change® forecast, as well as an honest assessment of current utilization, availability of expertise, growth potential and ease of program execution.
While it’s important to have physician champions, it’s just as important to have a clear understanding of what gaps or unmet demand exist in your market. For example, your physicians may be excited about technology available in telegastroenterology, but careful market analysis is more likely to reveal that telepsychiatry, teledermatology and tele–infectious disease are better strategic options.
After you’ve set your priorities, it’s just as important to dig into important implementation areas like scheduling, program governance, data infrastructure and marketing strategy development. Each specialty takes time to ramp up. You may also need to put some energy toward protocol development, training guidelines and performance dashboards. To guide program rollout, streamline decision making and avoid redundancies, Sg2 recommends at least 1 full-time equivalent to lead virtual health, supported by a separate governance/management model.
What If We Got Off to a Late Start?
The theme of Sg2’s Executive Summit this year is “Timing Is Everything.” Timing applies to your approach to risk contracting, but it applies equally to how you enter the virtual health business. There are more cars on the road every day but, so far, the traffic isn’t bad. Our advice is to keep a careful eye on the competition and the evolving marketplace, select a pilot or two for rapid experimentation, evaluate partners that may be able to help you accelerate market entry, and have sensible expectations on ROI.
Sg2 is working with many systems right now on their virtual health road trip strategy. Please feel free to reach out to us for advice, take advantage of our virtual health intelligence, tools and publications at Sg2.com, and get ready for a fun trip.