Understanding the Virtual Health Value Equation
Coauthored by Sg2 Project Associate Kelly Chen.
At this year’s Sg2 Virtual Health Summit, Sg2 and cohost Mercy Virtual in Chesterfield, MO, welcomed 45 attendees from 32 organizations across the US to discuss the changing landscape of virtual health and the financial, operational and technical challenges that health systems are facing in deploying virtual health programs. With presentations from 5 health systems, a panel discussion, and a Mercy Virtual campus tour, participants spent the day exploring the virtual health value equation.
Virtual Health Programs Must Tackle Enterprise-Level Strategic Imperatives
With significant growth opportunities in the virtual setting over the next 5 years—Sg2 projects that 8% of all evaluation and management (E&M) visits will be delivered virtually by 2021—staying relevant and competitive in the market can seem like a daunting task. I offered strategies for health systems to respond to the continued evolution of the virtual health landscape. She emphasized the importance of considering enterprise-wide strategic imperatives, such as margin management, channel access and consumer focus.
Virtual Health as a Core Competency
At Saint Luke’s Health System (SLHS) in Kansas City, 4 principles are used by an eGovernance Council to evaluate virtual health investment decisions. Dr Gary Ripple, medical director of eHealth and Outreach at SLHS, shared the system’s success in elevating virtual health as a core competency. The SLHS team evaluates the characteristics of eHealth and aligns them with the organization’s mission, vision and values. The 4 principles that guide virtual health investments follow:
- Market Expansion: How large is the opportunity?
- Operational Efficiency: Are the program benefits equal to or greater than the cost to produce them?
- Competitive Differentiation: What distinguishes the program from our competitors’ offerings?
- Defensive Strategy: Are we reacting to a competing eHealth program in the market?
By relying on these principles, SLHS has grown and sustained a successful comprehensive eHealth program in its primary and secondary service areas. SLHS’s eHealth programs include eHomeHealth, eICU, ePharmacy, ePsychiatry, eNeurology, eCardiology and eInfectiousDisease, among others. eSpecialty inpatient and outpatient services supplement patient care received by local physicians, and have successfully decreased transfers and increased total inpatient admissions for local critical access hospitals.
Bringing Virtual Health to Specialty Care
Virtual health can ease access to specialty care, decreasing travel time especially for patients from rural areas. Dr Samir Fakhry, chief of general surgery and medical director of the Virtual TeleConsultation Service (VTC) at Medical University of South Carolina (MUSC), discussed a scenario familiar to many clinicians and virtual health directors. When patients from rural areas are due for a routine post-op visit, they are expected to travel far and wide, only to see him for 5 to 10 minutes at a time. Why put this burden on patients, he asked himself, when there must be an easier, more affordable way to conduct these visits? In response, and with the help of a 2-year grant from the Duke Endowment Fund, Dr Fakhry piloted the VTC model. Two years later, the state dedicated a portion of its budget to improve health care access through virtual health initiatives, beginning with $14 million in 2012. The organization was able to grow VTC and establish the MUSC Center for Telehealth.
From 2014 to 2015, the VTC doubled in size from 122 to 358 patient consults per year. Top consults by specialty include adult and pediatric nutrition, adult and pediatric psychiatry, pediatric GI, pediatric sickle cell, and adult neurology. Ease of provider documentation is a critical aspect of continued growth: EPIC documentation templates were created for VTC clinicians to streamline administrative tasks. As of August 2016, the program has saved patients 231,008 travel miles, equating to $25,667 in fuel costs or 4,620 travel hours.
Scaling Virtual Health
Having a clearly defined strategic focus is essential to enable the most appropriate, sustainable growth of virtual health. At the Summit, David Gordon, director of telemedicine and rural network development at the University of Virginia Health System (UVA), discussed how UVA’s virtual health program has grown over the past 2 decades to meet the demand of patients and create value for the health system. UVA’s virtual health strategic focus includes:
- Increased engagement
- Integrated and expanded partnerships
- Innovative strategies and technologies
- Clinical services lines
- Continued infrastructure development
UVA established virtual health models that align with each area of strategic focus, including hub-and-spoke, Veterans Health Administration partnerships, remote patient monitoring, retail health, school-based clinics, and more.
With an understanding that sustainability is key to any successful virtual health program, UVA embedded virtual health education across the health system and university. UVA’s standardized virtual health education is based on evidence-based practice and can help alleviate concerns from payers or other entities regarding the medical appropriateness of virtual services.
Virtual Health Is Technology-Enabled Care
At University of Cincinnati Health (UC Health), virtual health is referred to as “technology-enabled care.” Dr Anya Sanchez, vice president of multidisciplinary services and chief transformation officer of UC Health, shared how UC Health’s emphasis is not on the equipment, but rather, on how care is enhanced with technology. In order to strategically deploy technology-enabled care, consider the following:
- Be technology-enabled, not technology-driven: ensure technology investments align with operational and strategic priorities.
- Protect the quality of care and preserve the patient-provider relationship by supporting clinician innovators.
- Focus on agility with regards to technology adoption rather than reimbursement.
- Engage and activate patients and providers.
- Advocate at the state and federal levels for reimbursement and policy to support innovative care delivery models.
Some key themes emerged from the virtual health summit that we thought would be beneficial to share with you wherever you are on your virtual health journey.
- Dedicated staff is a must-have for sustainable programs. Progressive virtual health organizations have between 2 and 20 dedicated full-time equivalents (FTEs), enabling them to achieve high yearly growth in virtual visits.
- Pediatrics continues to be a prime target for virtual health since it can increase access to rare pediatric subspecialists and improve care transitions for chronically ill children.
- Few programs are completely self-sustaining. Most are not revenue generating and require outside funding sources such as state funding or state/federal/industry grants.
- Direct-to-consumer programs are still very popular; however, startup costs due to vendor fees are a main deterrent.
- More data are needed to assess the impact of virtual health on provider productivity, as well as to benchmark financial, operational and clinical outcomes.