What's The Deal With Telemedicine?
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What's Happening In Telemedicine Today? What Could Be Improved And What's Stopping Adoption?
During COVID, conversations around telemedicine hit the top spot in healthcare, displacing “personalized medicine” and the phrase “you can’t move fast and break things in this industry”.
I made a little bingo board so you can stay entertained through your next conversation about telemedicine. These were just some of the most common tropes that came to mind.
I want to hear some of your thoughts on where you think telemedicine is going. Let’s level set with some context.
Telemedicine moves back to the future
Prior to COVID, telemedicine was a very small percentage of visits. Then, during COVID, it spiked to more than 75% of visits, and now it seems to have leveled out. But it’s still considerably above pre-COVID levels; Mckinsey estimates it’s about 38x above 2019 levels and ~30-40M telemedicine claims are filed per month. Fair Health pegs it at ~4.5% of medical claims vs. a peak of 13% at the height of COVID + there is a clear discrepancy based on specialty. A lot of these telemedicine analyses have their own flaws because they rely on claims and CPT codes which will skew based on payer type and won’t include many types of transactions (e.g. cash pay, non-billable messaging, waived co-pays, etc.), so all of it should be taken with a grain of salt.
On top of that, more reimbursement codes for remote patient monitoring and remote therapeutic monitoring (aka. medical hardware that monitors patient vitals + give guidance on what to do) has made it more financially viable to include home monitoring as a part of telemedicine care.
But now, as we ease back into normalcy, the future of telemedicine is a bit up in the air. In fact, it seems like the system is using telemedicine but trying as hard as possible to retrofit to the existing system - giving the worst of both worlds by increasing the amount of healthcare consumption and prices.
- Hospitals are getting wonky with charges. Some are deciding whether a MyChart message counts as a separate billable message. This gets complicated because if the message is “technically” billable and you offer it for free, it can look like inducement if you DON’T bill for it. Anecdotally, I’ve heard that Epic has grown from 10k messages/month to 2.5M /month. Others have even started charging facility fees for patients based on…where the doctor is taking the telemedicine visit? And they’re justifying it based on…what now? I’m going to assume this entire dialogue is satire.
“She called the billing office the next morning and was told the facility fee is based on where the doctor is located. Since the doctor would be on hospital property, the hospital would charge a facility fee of between $50 and $350, depending on her insurance coverage…”
”’It offsets the cost of the software we use to facilitate the telehealth visits, and we do still have to keep the lights on,’ he said, noting that the providers doing telehealth visits are on hospital sites that incur heat and power and maintenance charges.”
- Telemedicine still seems to mostly happen as either a phone call or video visit, which is essentially the same as an in-person visit in terms of efficiency (sometimes even worse, think about all the technical issues with Zoom calls). If physicians or aggregate care teams can’t see way more patients in a day, then the costs are the same and we haven’t improved care accessibility in the dimensions that matter. Blended models and asynchronous telemedicine are still not the norm.
- CPT codes are a set of codes we use to reimburse healthcare services that are designed to either measure the complexity or time that goes into a given service. However, this underpinning philosophy and process means that there’s no incentive to make services rendered more efficient. For example, some CPT codes have time requirements, defeating the purpose of having more efficient visits via telemedicine. (CPT code 98980 requires a 20 minute interactive visit for remote patient monitoring services and then CPT code 98981 gives more for an additional 20 spent.) If billing is set up around time minimums with a person, how are you supposed to build efficient or fully automatic systems? Plus, relying on CPT codes also makes it hard to give cost estimates/guarantees to patients up front.
- Payment parity rules (aka. the reimbursement for a virtual and in-person visit needs to be the same) are great for providers who probably wouldn’t invest in telemedicine otherwise, but bad for anyone that wants to give incentives for patients to see virtual providers instead. Plus the extra money that ends up going to providers still comes from patients, just more indirectly in the form of premiums, taxes, etc.
- McKinsey recently put out these survey results suggesting that while telemedicine is something patients seem to want more of, physicians are not huge fans and also haven’t really invested in it. It’s amazing to me that providers and physicians will complain about patient engagement when they don’t want to meet patients where the patient wants to be met.
Right now, telemedicine is in its awkward teenage years - uncomfortably in-between trying to fit onto an existing care delivery system that wasn’t built to use it but without a clear system of reimbursement for companies that want to use it natively. Compared to my teenage years, less Sum 41 is involved but somehow there’s more fixation on erections?
The telemedicine conundrum
Some of my disjointed thoughts:
- Telemedicine 1.0 almost exclusively focused on one-off patient transactions (urgent care, ecommerce style product shopping, face-to-face visit with your doc for a follow-up) and that’s also reflected in the data. This means they built products that are optimized to bill for that transaction and are not really built for longitudinal care. Most of them are either just replicating a face-to-face visit online, or using one-time forms with an anonymous doc. This is why I think a lot of the companies that are trying to shift from one-time relationships to longitudinal ones (become your PCP, chronic care management, etc.) are struggling to make that shift because their products weren’t actually built for that and it’s not how consumers think about a lot of these brands.
- Telemedicine companies purpose-built for value-based care contracts look very different. They have to build care teams, hire admin teams that are trained in telemedicine, heavily use asynchronous chat, figure out the handoffs between clinical vs. non-clinical teams, use some sort of risk-stratification system to understand when to intervene proactively, have some sort of e-specialist and referral network to triage patients appropriately, and develop offline care strategies (both sending the right level of care to someone’s home or networks of in-person locations to send someone). In fact, they probably won’t be called “telemedicine” companies at all because they’ll be hybrid, with some that skew to more in-person for complex populations. A new wave of companies are building virtual-first health plans in every health insurance segment: Galileo + MVP Healthcare in Medicaid, Cigna and MDLive in commercial, Firefly for small/midsize employers, Alignment Healthcare’s virtual HMO in Medicare Advantage, and I’m sure there are more I’m forgetting.
- Telemedicine 1.0 was mostly designed to give patients a smooth experience, but cared less about physician tooling or experience. Plus for large health systems, the buyer was hospital admin vs. the physician users which also led to less than desirable physician tools and workflows. Many physicians have to shoehorn telemedicine-specific visits into their workdays of in-person visits and go through totally separate rooms/processes/tools to do them. And these reasons are why physicians aren’t huge fans of telemedicine IMO. New telemedicine companies not only need to invest in better tooling if they’re caring for patients with more complex conditions, but it’s also become a form of clinician retention now that the market for clinicians is so hot. It can actually be a way to recruit talent. In tandem, there are tools built to make the infrastructure for that tooling better, e.g. Canvas, which has built an EMR that’s way more flexible and programmable for virtual care.
- I have yet to see a paper that talks about the number of missed diagnoses during a telemedicine visit compared to the number of missed diagnoses during a face-to-face visit. This seems to be a common talking point amongst physicians, but is there data to back the claim up that telemedicine will miss things? Genuine question.
- Telemedicine is going to be where large health systems get caught flat footed vs. startups. Hospitals have massive physical footprints with every incentive to bring patients through their doors or use the sus billing maneuvers to make money during telemedicine visits. In fact, payers SHOULD lean much more into reimbursing new telemedicine first companies in some value-based arrangement because it's theoretically in their best interest. However, I’m told that most telemedicine companies still try to negotiate individual case rates vs. trying to create any longer term ROI guarantee. Some of the virtual-first health plan partnerships I listed above are a start, but I think we’ll see more here.
- I’m interested to see how more telemedicine companies lean into the inclusion of peers + online groups as part of their programs. Most telemedicine companies I’ve seen are one-to-one between patient and provider/care team. I still think using opt-in for peer support, leaderboards, tracking, private Yelp for assessing in-person care, etc. would be a good way for patients to learn from others like them in combination with a clinician. WellTheory is doing some of this in autoimmune care, Groups does some of this in addiction treatment, and I’ve seen a few others in different types of obesity management telemedicine companies.
In general, I see telemedicine as a feature of new care delivery companies and necessary for new workflows, but not necessarily a standalone business. We’re already shifting away from the telemedicine businesses that aims to virtualize the inefficient in-person experience. I think our fixation on the number of billable telemedicine visits that have occurred is the wrong way to look at this. Telemedicine used correctly helps enable a better longitudinal patient relationship and better product/user experience that encounter-based billing will never be able to capture.
Tell me your hottest takes on telemedicine. Will it get adopted more broadly or will it never be a thing? What’s stopping it from getting adopted today? Is it good or bad for society? What do you think about the current state of telemedicine affairs?
Nikhil aka. “Sending my doc funny TikToks on MyChart”
Other posts: outofpocket.health/posts
Thanks to Sahir Jaggi, Alex Bertha, and Morgan Cheatham for looking at drafts of this.
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