This week the National Business Group on Health (NBGH) published the results of its most recent health plan design survey of large employers. The survey found that rising costs are a major challenge, with specialty pharmacy and high cost claimants the top two drivers. Large employers intend to continue offering health benefits to their employees, hoping to control costs with by managing pharmacy expenses and shifting routine care to lower cost settings, like telemedicine.
This approach aligns with prediction #9 for 2016: employers will begin to scrutinize insurance costs. It also leads into a discussion of prediction #6: routine care will shift to lower cost, non-traditional venues such as telemedicine.
As Meritalk reports, telemedicine is here, but unevenly implemented. One barrier to adoption is legislative issues – for example, lack of national compact licensure for healthcare professionals. Another barrier is resistance to change. While consumers may be ready to try telehealth, providers are dubious about remotely delivering quality, uniform care.
Another, less defined, adoption challenge is the fact that no widely accepted definition of telemedicine exists. In a recent blog post, Dr. John Halamka, M.D. discusses a number of technologies that qualify as “telemedicine,” ranging from poisonous plant identification through email to real-time video teleconferencing between doctors and patients. When telemedicine includes such a broad range of implementations, it’s difficult to pinpoint exactly when adoption occurs. Maybe telemedicine is already here, and we just haven’t recognized it yet?
Despite these challenges, momentum is coalescing behind telehealth, and the industry is poised to see rapid and widespread adoption from three driving factors.
1. Maturing technology
Network, audio/video, and remote device technology have been improving for decades, and today it’s feasible for patients to transmit real-time audio, video and data from portable, easy-to-use devices to a healthcare provider at a remote location. Previously, such an approach required a variety of technologies from different vendors on different platforms. Now an exciting development promises to bring several of these technologies together under a common platform, already enjoying widespread use in the consumer market.
Apple recently filed a patent that may soon enable telemedicine through its iOS devices. Its FaceTime and HealthKit components provide most of the technology required for effective telemedicine in a tested, economical package that everyone already owns.
Apple should not underestimate the effort required to add HIPAA compliance and clinically useful software, and can work with partners like Ochsner Health System to help springboard the company into this daunting vertical market.
2. Improved regulatory environment
In a brick-and-mortar encounter between a patient and a doctor, both parties are in the same room, and governed by the laws of the jurisdiction where the encounter happens. With a telemedicine encounter, the doctor and patient may be in different cities or even different states (so far the topic of practicing telemedicine across national boundaries has not been widely addressed).
This creates administrative problems in terms of licensure and reimbursement that will take a long time to resolve.
CMS is providing some help in terms of clarity around Medicaid reimbursement by stating that states are not required to do any extra work if they choose to cover telemedicine encounters in the same way (and amount) as they cover face-to-face visits. The agency is a leader in establishing reimbursement policies, so hopefully this presages similar guidance from other payers in the near future.
3. Immediate need to lower costs and improve efficiency
As the NBGH large employer survey makes clear, there is a powerful and immediate need to lower healthcare spending. The appropriate use of technology could save millions of dollars. For years the business world has realized the cost savings from foregoing face-to-face meetings when practical. As technology becomes more affordable, it makes sense to apply the same idea to healthcare.
One organization that has emerged as a telemedicine leader is the Department of Veterans Affairs (VA). A pilot program at the VA has matured. It now helps more than 100,000 patients each year and has lowered hospital admissions by 35 percent. These exceptional results like demonstrate why large employers are looking at telemedicine to reduce insurance coverage costs.