Telehealth Rule Forces Providers to Re-Think Care Management, Facility Plans

ERDMAN ALERT:

Telehealth Rule Forces Providers to Re-Think Care Management, Facility Plans

INTRODUCTION

Over the past decade, telehealth has evolved into an industry that experts predict will transform how care is delivered. It offers access, convenience, and better outcomes at lower costs – all of which benefit  systems of health  overall and facilitate the transition to value-based care.2

Telehealth supports coordination of care with many diverse populations including the elderly, those with chronic illness, and strengthens relationships between primary care providers and their patients. A new federal regulation is certain to accelerate its use across health systems, prompting providers to re-think their care coordination strategies.

BACKGROUND

“Telehealth” is a term used broadly to describe care provided remotely so physicians and patients can interact without meeting in the same location face to face. The idea has been around since the 1920s. During the early 1960s, Nebraska Psychiatric Institute and the Norfolk State Hospital used an “interactive video link” to provide care across 112 miles between the facilities.3 But providers were slow to adopt telehealth and it remained peripheral to care management strategies.

Telehealth adoption accelerated in 2009 with the passage of the American Recovery and Reinvestment Act (ARRA) which allowed for incentives to encourage use of healthcare information technologies (HIT). In 2010, the Affordable Care Act (ACA) implemented a series of value-based purchasing programs that encouraged provider organizations to coordinate care more aggressively, thus facilitating use of telehealth technologies and solutions.

The industry is projected  to reach revenues of over $13 billion by 2023 – an annual 27 percent growth rate for the period from 2017 to 2023.9 Currently more than three-fourths of hospitals use or will implement telehealth technologies during 2019, according to the American Hospital Association. Other indicators include:

Physician adoption: Late last year M3 Global Research released findings from a survey that examined telehealth adoption rates among physicians between 2015-2018; the survey included 800 U.S. physicians (62.5 percent were primary care physicians).

          • Physician adoption of telehealth shot up 340 percent from 5 percent to 22 percent between 2015 and 2018, based on a survey of 800 physicians (62.5 percent primary care and the remaining included specialists), conducted by M3 Global Research.
          • Doctors’ willingness to use the technology grew during that same period from 57 percent to 69 percent.10


Utilization:
Statista conducted a study and found an increase from 22 million telehealth visits in 2013 to 30 million in 2017. The market is projected to reach between a low of 46 million visits to a high of 81 million visits by 2022 (See Figure 1).11

ERDMAN-INSIGHTS-Telehealth-GRAPH-Telehealth-Visits-(Fig1)

Geographic (regional and national) adoption: Usage assessments have shown that from 2011 to 2016, telehealth use increased markedly: By 96 percent  in rural areas; by 629 percent in urban areas; and by 643 percent nationally, according to a FAIR Health report.4

Employer adoption:
A 2018 Willis Towers Watson survey revealed that employers have largely contributed to the increase in telehealth usage by encouraging their employees to take advantage of this benefit because it offers convenience, and quality care at a lower cost. Telehealth is an alternative to office visits, outpatient clinics or emergency departments. Another key finding was that 86 percent of employers offer telehealth services and another 10 percent plan to by 2020.12

As telehealth has become mainstream, officials from HHS/CMS have consistently encouraged its use through rules and regulations. The latest: on April 5th, CMS released its final rule expanding telehealth reimbursements. Beginning January 1, 2020, health plans will include additional telehealth services as part of their Medicare Advantage plans (the popular managed Medicare option offered by private insurers to more than 20 million seniors).

This rule does not explicitly direct provider organizations to deploy capital to telehealth activities. Rather, it offers a payment mechanism whereby these efforts may be funded in the context of Medicare Advantage plans.

As a result of this regulation, and its broader use by providers to achieve success in value-based arrangements with payers, it’s clear telehealth will become central in managing patient populations. Every provider organization must now consider how they choose to integrate telehealth with the populations they serve.ERDMAN-ALERT-TELEHEALTH-HC-Leaders-Call-Out

STRATEGIC CONSIDERATIONS ABOUT TELEHEALTH

There will be added complexity in implementing telehealth:

Regulatory compliance: Health systems can expect a changing policy landscape at state and federal levels

Master site planning adaptation: “Bricks and clicks” will represent one of the new ways to define demand:

      • “Telemedicine visits saved those patients the equivalent of nine years of travel time, five million miles, and $3 million in cost.”
      • “Diverting patients from emergency departments with telemedicine can save more than $1,500 per visit.”1


“Annually, 15.1 hospitalizations out of a potential 180 could be eliminated with the use of telemedicine facilities.” 7

THE ERDMAN TAKEAWAY

Telehealth is becoming a major disruptor in healthcare. While this most recent regulation is confined to Medicare Advantage plans, it is certain to become more widely reimbursed.

The acceptance of telehealth spans generational gaps – from Gen Z and millennials to baby boomers in senior care facilities, and at home. Its applications to improve care coordination, reduce administrative costs, improve patient adherence, and outcomes are limitless. Its use extends to inpatient and outpatient settings, senior care facilities, and into homes, schools, and workplaces. It’s a game changer and it’s moved beyond the “wait and see” stage.

For strategists and facility planners, the implications are significant:

In Facility Planning: Assessment of adjusted demand resulting from tele-visits and other uses must be calculated.

In Clinical Program Planning: The role telehealth plays in physician referrals, distance radiology and diagnostics, and more including improving access to in-demand specialties like psychiatry and others.

In Outpatient Services: The location of services to which tele-consults are directed including clinics, professional offices, and wellness centers.

Paul Keckley Quote

-Paul Keckley @ ASHE Conference

Resources Cited

  1. Cheney, C. (May 7, 2019). “Cost savings for telemedicine estimated at $19 to $120 per patient visit.” HealthLeaders.https://www.healthleadersmedia.com/clinical-care/cost-savings-telemedicine-estimated-19-120-patient-visit.
  2. Greenspun, H., Korba, C., Kane, A. (2016).  “Realizing the potential of telehealth: Federal and state policy is evolving to support telehealth in value-based care models” Deloitte Center for Health Solutions and the Deloitte Center for Regulatory Strategy 2016. https://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-lshc-realizing-the-potential-of-telehealth.pdf.
  3. Iafolla, T. (May 25, 2018). “The history of telemedicine: From 1924 to 2016 – A look at telemedicine over the century” (Infographic) eVisit 2016. https://evisit.com/resources/history-of-telemedicine/.
  4. Kent, J. (Mar. 26, 2018). “Research shows telehealth service use, availability on the rise.”  mHealthIntelligence. https://mhealthintelligence.com/news/research-shows-telehealth-service-use-availability-on-the-rise.
  5. Lovett, L. (Apr. 11, 2019). “Teladoc, Cincinnati Children’s Hospital ink deal to develop pediatric-specific telehealth platform.” MobiHealthNews. https://www.mobihealthnews.com/content/teladoc-cincinnati-childrens-hospital-ink-deal-develop-pediatric-specific-telehealth.
  6. Mack, H. (Mar. 22. 2017). “Telemedicine saves time, travel costs, even air quality, new study finds.” MobiHealthNews. https://www.mobihealthnews.com/content/telemedicine-saves-time-travel-costs-even-air-quality-new-study-finds.
  7. Maldonado, E. (July 27, 2017). “Designing for health: The telehealth dialogue.” Contract. https://www.contractdesign.com/practice/healthcare/designing-health-telehealth-dialogue/.
  8. Muoio, D. (Feb. 26, 2019). “Doctor On Demand launches integrated virtual primary care platform.” MobiHealthNews. https://www.mobihealthnews.com/content/doctor-demand-launches-integrated-virtual-primary-care-platform.
  9. Research and Markets. (Jan. 7, 2019). “Telehealth Market in the US – Industry Outlook and Forecast 2018-2023” https://www.globenewswire.com/news-release/2019/01/07/1681424/0/en/United-States-13-Billion-Telehealth-Market-Outlook-and-Forecast-2018-2023.html.
  10. Roth, Mandy. (Apr. 15, 2019). “Physician telehealth usage wallops early EHR adoption rates.” HealthLeaders. https://www.healthleadersmedia.com/innovation/physician-telehealth-usage-wallops-early-ehr-adoption-rates.
  11. Statista. (2019). “Number of telehealth visits in the U.S. from 2013 to 2022 (in millions).” https://www.statista.com/statistics/820756/number-of-telehealth-visits-in-us/.
  12. Willis Towers Watson. (2018). “Willis Towers Watson 23rd annual best practices in health care employer survey.”  https://www.willistowerswatson.com/-/media/WTW/PDF/Insights/2018/12/willis-towers-watson-23rd-annual-best-practices-in-health-care-employer-survey-full-report.pdf.

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