The other side of virtual care
A digitally enabled health care system should be good news all around. Doctors can see more patients, patients can avoid unnecessary in-person visits, and physical facilities can be downsized. Telehealth companies are ramping up their lobbying efforts to push for payment parity and protect their COVID-era gains. As long as there is payment parity between in-person and virtual visits, healthcare providers shouldn’t care. So it would seem like a win-win.
Except it isn’t.
The rise in telehealth and virtual care adoption is not necessarily good news for everyone. Health insurers, for one, are concerned about the additional costs of patient education as well as process design and staff training for things like “webside manners,” Another concern for them is overutilization of care, especially now since it’s easier than ever for patients to do virtual visits with their doctors. Meanwhile, new entrants like Amazon are blowing up conventional reimbursement models such as PMPM and replacing it with consumption-based models borrowed from their pay-as-you-go pricing for cloud services. This puts pressure on incumbents relying on maintaining and expanding revenue sources using traditional models.
That isn’t stopping health systems and health insurers to move into these new models. Following recent acquisitions of telehealth providers by Cigna and Walmart, Kaiser Permanente and Mayo Clinic announced last week that they are taking significant equity stakes in Medically Home Group, a Boston-based provider of home health services.
The final wildcard in this game is the patient. A recent study by Penn Medicine and UC Santa Barbara and research by Harvard Business School raise doubts about what patients really think about virtual and AI-enabled care.
In my latest podcast episode, I interview John Donohue, Vice President of Entity Services at Penn Medicine. John gives us a fascinating view into the hospital of the future, a $1.5 billion investment by Penn Medicine that is launching soon. Take a listen.
Have a great week.