Can Telemedicine Help Tame Health Benefit Cost Inflation?
Many years ago, telemedicine essentially consisted of interaction between doctors in large hospitals and patients in remote rural clinics via closed-circuit TV. Since then, it has exploded into a far more sophisticated, venture capital-fueled industry. Multiple technologies now equip health care providers with immediate clinical data that can assist them with rapid diagnoses and patient monitoring. Also, patients can communicate directly and promptly with physicians, nurses and other health care professionals, using an expanding array of mobile apps.
A survey by national telemedicine service providers projects that in 2020 around 90% of midsized and larger employers will make telemedicine available to employees. These services may be available through health plans that serve smaller employers, as well as from vendors that operate on a standalone basis as a supplement to a standard health plan.
COVID-19 Outbreak Brings Telemedicine to the Forefront
The coronavirus (COVID-19) outbreak — officially a pandemic as of March 11 — has rightly become the focus of massive public attention in recent weeks. Vice President Mike Pence has been charged with leading the U.S. government’s response to the outbreak.On March 10, the White House met with executives of major private health insurance companies. Pence said that the companies had agreed to cover telemedicine for patients for any reason for the next few months — no matter the reason for seeking medical treatment. The insurance representatives attending the meeting also agreed to cover COVID-19 treatment and waive copayment fees for COVID-19 testing.
On March 17 in a White House press conference, it was announced that Medicare would now be offering a wide range of services via telemedicine.
These measures are intended to keep sick and at-risk patients at home, encourage testing for COVID-19, make treatment more affordable, and potentially reduce the severity and duration of the outbreak. Pence said the companies gathered represent almost 240 million Americans.Contact your insurance provider for the details of your plan’s coverage. In the case of Medicare, contact your doctor for information. And visit the CDC website for the latest developments on the COVID-19 outbreak.
There are four categories of telemedicine services:
1. Synchronous. This category consists of live interactive visits between patients and health care providers, and consultations between primary care physicians and specialists with efficient data sharing.
2. Asynchronous. Also known as “store and forward,” this category involves the collection of health data, such as lab results accompanied by patient demographic data and medical history. Data from the patient is subsequently reviewed by the provider and addressed. Also, patients can leave voice or video-based messages for providers directly in an asynchronous system.
3. Remote patient monitoring. Personal health data is collected as needed, often by devices patients can operate themselves. Then the data can be transmitted to health care professionals using the patient’s phone.
4. mHealth. This is telemedicine via smartphones. In addition to virtual visits with health care providers, mHealth includes care delivery using mobile apps without the direct presence of a provider.
Avoided ER Visits
It’s common for patients to turn to virtual care services instead of making an expensive dash to the emergency room. In 2018, four emergency room physicians, whose Philadelphia hospital offers an on-demand telemedicine service, conducted a study that was published in the American Journal of Emergency Medicine, May 2019. The research concluded: “The majority of health concerns could be resolved in a single consultation and new utilization [that is, follow-up calls from patients] was infrequent. Synchronous audio-video telemedicine consults resulted in short-term cost savings by diverting patients from more expensive care settings.”
According to the health plan at the University of Pittsburgh Medical Center, a typical acute care telemedicine “visit” costs less than $50, compared to an average $77 for a retail clinic, $112 for a doctor’s office, $156 for an urgent care clinic and $1,454 for an emergency room visit.
Also, telemedicine services have been shown to help patients with chronic conditions like diabetes and pre-diabetes. Specifically, telemedicine is helping change patients’ behaviors through virtual support groups and among other remote interactions.
Telemedicine shows promise in generating better patient outcomes and less expensive care. But the trick for employers is to overcome employees’ reluctance about using it. The keys are effectively communicating the benefits and not putting unnecessary financial obstacles in their path.
A large provider of virtual healthcare services recommends the following do’s and don’ts to maximize utilization:
- Do customize your communication to employees about their telemedicine benefits and send messages on a regular basis.
- Don’t charge employees out-of-pocket fees for virtual visits. You’ll come out ahead financially by maximizing employee utilization of the service.
- Don’t rule out the telephone as an option for patients to receive telemedicine services. Many people still prefer using a telephone to mobile apps.
- Do use “trained patient experience agents” to contact employees to obtain their background medical information prior to employees’ initial use of the service. Employees might balk having to supply their health data when they’re not yet seeking medical services, but it’s essential for health care providers to have this information ready when an employee calls in.
Questions to Ask Vendors
The market for telemedicine services is highly competitive. So, it’s important to know the right questions to ask when talking to vendors and to put their claims into context.
For example, the average utilization rate of telemedicine services typically falls below 10%. Yet you probably won’t get a lot of bang for your buck with a virtual care provider unless utilization rates are in the 25% range. Utilization rates reflect on the quality of the vendor’s platform and your employees’ health.
When comparing vendors’ prices, look at the whole picture. A vendor might set one fee low but offset the low fee by charging more.
When costs are primarily based on the PEPM fee, you’ll have a better handle on what to expect than when there are hidden or variable costs. Equally important, a vendor who bases charges on the PEPM fee has an incentive to address your employees’ health needs with fewer virtual visits.
Right for Your Business? There are no silver bullets available to slay the beast of ever-rising health benefit costs. But as it evolves and improves, telemedicine is equipped to do it some damage. Contact your HR or financial advisor to help evaluate your options to fortify your defenses.