Health+Benefits the July/August 2019 issue

Your Customers Are Changing

Telemedicine is healthcare’s answer for the on-demand world.
By Tammy Worth Posted on July 23, 2019

It was late in the day, so he didn’t have a chance to meet the patient’s family until the next morning. But when he went to introduce himself and update the family, the patient’s son had already become familiar with Rosen’s biography.

“He had Googled me and knew where I had trained and everything else about me,” Rosen says. “Patients are seeking information and are more accustomed to using the web to find it.”

If people can schedule a haircut or dinner reservation online, manage personal finances and search for nearly any information they need, Rosen says, it’s naïve to think medicine isn’t heading in the same direction. 

Telemedicine has been around for a while, but it was in 2017 that the regulatory environment began to move, consumer demand increased and providers became more willing to participate, according to Rich Berner, CEO of MDLive, a platform of online doctors available 24 hours a day to treat a variety of conditions. There was growth in the industry last year, and in 2019, Berner says, telemedicine has become mainstream. 

“Brokers, insurance plans, patients and doctors are familiar with it now,” he says, “and it’s getting baked into plan design.”

Still, with all the cogs nearly in the wheel, telemedicine has relatively low uptake. Proponents tout its ability to increase access and reduce costs, though research on the benefits is mixed. But the industry is progressing into new medical territory, expecting rapid growth in the coming years. 

The Makings of Virtual Health

Dr. Felix Matthews, managing director at Deloitte Consulting, is amused by what he calls the rebirth of telemonitoring. Going back to the early 1990s, patients with congestive heart failure had scales connected to dial-up modems that regularly sent the patients’ weight to doctors, who could then look for rapid weight gains that might indicate fluid retention. Diabetics also used dial-up connections to send insulin use and glucose measurements to
their physicians. 

“Almost 30 years later,” Matthews says, “the same use cases are still being thought up.”

But the industry has come a long way from dial-up. Kaiser Permanente is a vocal proponent of telemedicine, using it to bring an array of services to its patients. According to Chris Stenzel, the vice president of business development and innovation, more than half of Kaiser’s clinical encounters are performed virtually. 

Kaiser handles about 52 million visits by phone each year—35% of the company’s total. A phone visit can be an urgent call with a doctor or nurse, or it can be used to address health issues outside of an in-office visit. Another 37 million encounters are performed via email (25% of the total). Those numbers don’t account for things like remote monitoring or other videoconferencing. 

“For us,” Stenzel says, “it has been more than a decade-long drive really centered on three things—how to deliver the best quality care that creates a great consumer experience and is affordable.”

The practice of people sitting one-on-one with their doctor isn’t a sustainable model, given we have an insufficient workforce. There is a lot we can do with technology, and part of that is expanding the definition to what we consider telehealth.
Ann Mond Johnson, president, American Telemedicine Association

When patients call requesting an appointment, they are asked if they want an office or phone visit or prefer to communicate via email. Under the Kaiser system, doctors reserve part of their day for virtual care. “We let the consumer decide when and where it is convenient for them,” Stenzel says. 

Though most people may think of telemedicine only within the confines of video or phone contact, that perspective sells the technology short, according to Ann Mond Johnson, president of the American Telemedicine Association. “The practice of people sitting one-on-one with their doctor isn’t a sustainable model, given we have an insufficient workforce,” Johnson says. “There is a lot we can do with technology, and part of that is expanding the definition to what we consider telehealth. 

“There’s such a convenience issue. People are not particularly interested in going to the doctor’s office and finding parking and sitting in a waiting room. And many parts of the country have an inadequate supply of physicians. Telemedicine provides access to consumers that otherwise would not be made available.”

Telemedicine, virtual health and telehealth all refer to the use of technology to replace face-to-face health services. The industry runs the gamut from phone calls to emails, videoconferencing, remote monitoring, and consultations between healthcare providers. Patients can reach their physicians through phones, laptops, wearable devices and even virtual reality equipment.

Targeted Savings

The benefits of virtual care seem to depend upon how and why it is used. Research has shown that telemedicine services can keep patients with asthma and diabetes out of the ER through phone consultations; reduce no-shows and cancellations for patients with PTSD; dramatically cut readmissions rates for congestive heart failure patients through remote monitoring; and save money by keeping ICU patients from being transferred to different hospitals.

Telemedicine Stats

A 2018 study in the Journal of the American Medical Association analyzed claims from a large U.S. health plan’s privately insured and Medicare Advantage enrollees from 2015 to 2017 and found: 

  • The mean user age was 38
  • 63% of patients were female
  • 83% of users were in urban areas
  • Approximately six in every 1,000 members had used telehealth in 2017
  • Mental health and primary care were the two most common types of virtual visits.

MDLive began its service to Cigna members about five years ago. Berner says Cigna was initially concerned that offering telemedicine visits would just increase costs—that such visits wouldn’t be effective and patients would end up seeing their doctor anyway, thus double billing the company. 

But after starting the service, Cigna compared 20,000 patients who used it from 2014 to 2016 with 20,000 similar patients who did not. Over the two-year period, the company found total medical costs for users were 17% lower. Much of that savings Cigna attributed to a 36% reduction in emergency room use and a 45% increase in the use of generic medications. Patients also had a 97% closure rate. This means MDLive users did not seek additional care within a week of these visits, disproving the initial concerns of Cigna executives.

Pittsburgh-based healthcare provider and insurer UPMC has seen similar results within its health plan. The organization has analyzed records 30 days after virtual visits and found patients rarely seek additional care. Avoiding the ER or urgent care when appropriate would save an employer an average of $134 per visit, says Kim Jacobs, UPMC’s vice president of strategic digital health innovations. 

American Well, a Boston-based company that provides urgent care telemedicine visits nationwide, estimates an employer whose workers make 2,000 visits to primary care, ER and urgent care in a year could save $200,000 if those were replaced with telehealth visits.

Stenzel says Kaiser has been engaged in a disciplined internal debate regarding telemedicine—whether it’s convenient and nice to offer or whether it’s really driving cost savings. Though he didn’t give exact numbers, he did say they are going “to invest more heavily where telemedicine will substitute for more expensive kinds of care.” For employers, he recommends testing different options on small populations and scaling up those that produce good results. 

Urgent Care

One space where telemedicine is expanding rapidly is for minor, acute care, similar to what people would seek at a brick-and-mortar urgent care facility.

“People often need this on nights or weekends, and if they can’t get into their primary care provider, they’ll go to urgent care or the ER,” Berner says. “If we can prevent those visits, it is more convenient for the consumer, and it saves a health plan significant amounts of money.”

UPMC launched its first telehealth effort in 2013—the ability to email providers via secure messaging. After about two years, the company has had more than 10,000 visits. In 2016 UPMC launched what Jacobs says are now table stakes: an app that gives users round-the-clock access to their network of physicians. Working with American Well and using UPMC providers, UPMC’s AnywhereCare provides acute care with a wait time of less than six minutes. Since its launch, the program has had 30,000 paid visits. 

“It’s very consumer-friendly,” Jacobs says. “It’s the level of service we would like more individuals to use because it is appropriate care for a variety of different kinds of ‘itises.’”

More than 75% of visits to UPMC’s AnywhereCare are respiratory related, but Jacobs says they see patients for a range of issues, including pink eye, urinary tract infections and bug bites. They add at least 3,000 people per month to the program. 

“We have really turned the corner of consumer confidence with these visits,” he says. 

Behavioral Health

What Mond Johnson calls the other “shining star” of telemedicine is the realm of behavioral health. With three quarters of U.S. counties having an insufficient number of mental health providers and one in five Americans having a mental health condition, Johnson sees telemedicine as a potential solution to workforce shortage and high demand. 

Behavioral health is the second-most common clinical area for telemedicine services, according to a 2018 UPMC survey of large healthcare providers nationwide (stroke is the first). Nearly 60% of respondents in the survey offer the service, and one third are planning to add it. 

The University of Michigan’s Behavioral Health Workforce Research Center reached out to 329 behavioral health organizations nationwide in 2018. The center found nearly half the organizations offer telehealth services, most commonly video conferencing. 

Along with video visits, a host of tools and apps help users reduce stress, grow more mindful and increase resilience. Stenzel says they are convenient and inexpensive—some are even free to download on a phone. He suggests brokers or employers encourage the use of tools and apps that are supported by clinical research, if possible.

But telehealth in this sector is already far beyond apps and video conferencing. Jeffrey Cohn, a professor of psychology, psychiatry and intelligent systems at the University of Pittsburgh, worked with Carnegie Mellon University to create a program that can understand and analyze the different dynamics of facial expressions to determine the severity of a person’s depression and other aspects of mental health.

Brokers, insurance plans, patients and doctors are familiar with it now, and it’s getting baked into plan design.
Rich Berner, CEO, MDLive

“We can use head motion, blinks and orientation of gaze to create a very rich description of what the face is doing moment to moment, and we have begun to use it to study depression, OCD [obsessive compulsive disorder] and a wide range of other studies,” Cohn says.

A few factors make telemedicine particularly well suited to behavioral health services. First, there is a stigma attached to care, so getting it from home will benefit some patients. Second, severely depressed people and those with OCD often find it challenging to leave the house for treatment, Cohn says. There is a shortage of providers, particularly in rural areas. And it can bring needed care to the even wider range of communities lacking specialists. 

Specialty Care

In addition to behavioral health specialty care, telemedicine can be used for people with chronic or emergent physical health problems as well. Stenzel says it’s used at Kaiser for follow-up visits after a procedure and when a patient is coming in emergently after a stroke. Tests can be given to patients en route to a hospital to see if they can be given tissue plasminogen activator (tPA). This medication can help dissolve blood clots but must be administered promptly after a stroke. And if given to the wrong patients, it can be fatal. 

By sending information electronically, doctors know—as soon as a patient arrives—whether the patient is a candidate for the therapy. This process has saved over $6,000 per patient by reducing the length of hospital stays and has added nine months, on average, to stroke patients’ lives, Stenzel says. 

Truly Virtual

Eran Orr was diagnosed with whiplash four years ago while working as an F-16 pilot in the Air Force. During his rehabilitation, he was struck with the possibility of combining rehab with virtual reality. Thus, XRHealth was born. 

Orr’s organization is a virtual reality (VR) medical company that develops applications to treat patients dealing with conditions like pain management, motor function issues, cognitive rehab and even hot flashes. Orr says immersive technology offers patients an experience very different from traditional care. “It’s immersiveness in the sense that a person actually believes that they are there,” he says. 

This can be beneficial, for example, if a person is suffering from a panic attack. Instead of just opening an app that advises the patient to breathe deeply, with VR, the patient steps into a new environment. He can choose different backgrounds and music and meditation or breathing exercises.

When using VR, Orr says, a healthcare provider can receive 500 times more data points than if the provider were seeing a patient on a regular screen. The clinician can control the environment and see exactly how the patient is interacting with the program. Each time a person uses the program, a report is sent to his physician with data, including range of motion, response time, reaction time and performance on cognitive skills tests. 

“Anything you can measure in real life that you can observe from the outside, you can measure better in VR,” he says. “People using it are healing faster…. I have no doubt that two to five years from now, we will see VR in every hospital and rehab center as a replacement for opioids.” 

The product isn’t available direct-to-consumer at this point. Patients are exposed to the technology through XRHealth’s customers: hospitals, rehabilitation centers and insurance companies. 

This is beneficial because it’s often the first time a patient has ever used a VR device, Orr says. The patient’s first encounter is in a controlled environment in which the patient can be guided through the program. Then the patient takes it home, where the patient is monitored remotely by a physician. 

XRHealth (the XR stands for “Extended Reality”) has performed close to 40,000 treatments to date. Orr says the company conducts about 250 sessions daily. Much like other areas of virtual medicine, Orr says, it’s not the technology that’s holding it back from widespread use. It’s the patients. 

“People don’t know we exist, and if they do, they think it’s for gamers,” he says. “But it’s not a gaming console. It is a certified medical device that they can see amazing benefits from using.” 

Their current focus is on VR, but Orr says the next step in virtual care is augmented reality (AR) or mixed reality. AR allows patients to see their “real world” surroundings overlaid with VR objects that feel real. This technology, Orr says, is still a couple years away from mass medical adoption. 

Orr predicts virtual reality will prove effective at managing pain and improving brain plasticity (forming new connections between neurons). At this point, XRHealth is creating programs for AR in areas like gait analysis (assessment of walking or running). 

This technology can be used to improve health, but it might also be used to identify when something is amiss with a patient, thus allowing doctors to intervene faster, possibly averting ER visits or hospital readmissions.

“This won’t just make sure people are healthier,” Orr says. “It can save money for the whole market.”

Rosen says telemedicine is widely used in his practice at the Mayo Clinic. Mayo’s patient portal acts as a means for communication between patients and nurse coordinators to schedule appointments, share itineraries, and monitor and alter medications like immunosuppressants. 

“Patients are more comfortable talking with us there, and we’ve been able to provide a lot of clinical care that way instead of calling their coordinator and going back and forth with the phone,” Rosen says. “It has really affected our practice in areas like transplantation, where there’s a lot of communication between the healthcare team and the patient. It’s less costly and more efficient.”

We can use head motion, blinks and orientation of gaze to create a very rich description of what the face is doing moment to moment, and we have begun to use it to study depression, OCD [obsessive compulsive disorder] and a wide range of other studies.
Jeffrey Cohn, professor of psychology, psychiatry and intelligent systems, University of Pittsburgh

Bill Fera, a principal at Deloitte, says telemedicine enables “more frequent, light touches” with patients while “AI is happening in the background.” In the chronic disease space, more data can be given to providers, and applications can crunch information to spot trouble before it happens. The process, he says, is more personal for patients, spans a spectrum of care, and allows for a range of team members, care managers and sometimes even family to gain access to the information. 


Though proponents gladly tout the wonders of telemedicine, there are some reasons participation remains low for both patients and physicians. One is its promise of cost savings. Urgent care service is a good example. Stenzel says it can be convenient for people but it may not necessarily save an organization money. Some research bears this out. 

The Rand Corporation looked at commercial claims data to determine use patterns for more than 300,000 people with acute respiratory illness from 2011 to 2013. They analyzed direct-to-consumer products and estimated only about 12% of the virtual visits replaced ones patients would have made to brick-and-mortar facilities. This means 88% were new users. 

“There may be a dose response with respect to convenience and use—the more convenient the location, the lower the threshold for seeking care and the greater the use of medical services,” says Lori Uscher-Pines, one of the report’s co-authors. 

Researchers also noted that people taking part in virtual visits tended to have more follow-up appointments, tests and prescriptions, increasing annual spending by $45 per user. 

An April article in Pediatrics found that direct-to-consumer telemedicine physicians tend to overprescribe antibiotics to children. Researchers analyzed insurance claims and found antibiotics prescribed at 52% of telemedicine visits, 42% of urgent care visits and 31% of primary care offices. Patients using telemedicine were also much less likely to have their antibiotics managed by a provider to ensure proper usage. (Mond Johnson contends overprescribing of antibiotics is more a systemic problem than one isolated to telemedicine.) 

Finances also pose a barrier to getting physicians on board with telemedicine. Krista Drobac, a partner at Sirona Strategies, a consulting firm based in Washington, D.C., says the main reason telemedicine isn’t more widespread is healthcare providers don’t always get paid for it. 

The University of Michigan surveyed providers and found the most commonly reported barriers to implementation for practices were indeed financial—lack of reimbursement and cost of setup and maintenance. Others included organizational leadership, workforce shortages and lack of training.

It’s much easier to adopt this in a large system
like Kaiser. It’s hard, Stenzel says, to convince doctors in a fee-for-service environment to invest in the technology and security needed when they aren’t guaranteed reimbursement. 

But with Medicare typically setting the tone for what is—and isn’t—reimbursed, there have been some wins for the industry in recent years. “Telemedicine is the first benefit in Medicare Advantage that isn’t part of the basic Medicare package,” Drobac says. “Coverage for remote patient monitoring started in earnest last year.” 

Other issues include lack of bandwidth for the technology in rural areas, which is where telemedicine was meant to be used in the first place. And there may be other barriers in these places as well. A majority of patients using telemedicine (83%) live in urban areas, according to a 2018 study in the Journal of the American Medical Association.

The Major Impediment

With all of the challenges to telemedicine, lack of insurance coverage for the service doesn’t appear to be one. According to a Kaiser Family Foundation report, three quarters of employers offered telemedicine in their health plans in 2016, and one quarter of those provided some sort of incentive for its use. But Kaiser found fewer than 1% of total outpatient care was attributed to telemedicine visits that same year.

Many people in the trenches say the lack of patients’ awareness and education has inhibited use. Alabama’s Morgan County Commission found this out the hard way. After two years of using MDLive, the commissioners voted to terminate the county’s contract with the company in late 2017. The county was paying $14,000 annually to cover nearly 400 employees, yet only 14 had used the service.

But insurance rate hikes prompted the county to give it one more try, says Ray Long, the commission’s chair. During the extension, the commission mandated meetings with all county employees at which the employees were taught why and how to use the service. 

“Most employees didn’t realize we were self-insured even though we explained it to them during orientation,” Long says. “In these classes, we told them if they are really sick, go to the ER, but not if they have a cold or flu or poison oak. That was just what they had always done and didn’t see any reason to do anything differently.”

Long says the county commission explained to employees that saving money on healthcare would benefit the county’s bottom line and its employees financially. The commission helped sign people up for the service at these meetings and ended up increasing the number of visits to 140 in just a couple of months. That year, the commission received about $700,000 back from what it paid into insurance, which was used to increase benefits and give merit and annual pay raises to employees. 

“It turned out to be a good program, but we had to push it and really let people know what it was,” Long says.

If employees are going to use telehealth, it must be offered in a way that is less expensive and more convenient than a traditional office visit. MDLive’s Berner says there is a three-step process for encouraging telehealth. First, start with no—or a very low—co-pay for telemedicine visits. MDLive sees significantly higher use when no co-pay is involved. A multi-channel marketing strategy is also required—both online and offline. Finally, the registration process for visits must be automated and simple. 

Jacobs says UPMC has spent an enormous amount of time and energy communicating its service to members as well. The company uses social media, direct ads and mailers. UPMC plans a year ahead for each marketing campaign, and it is consistent with strategy. 

“If I wanted to make any kind of major shift in my company, I would want to educate the workforce on a consistent basis,” Jacobs says. “You need to promote it—and often.”

Look for Proven Results

The telehealth industry appears to be heading toward providing an increasing number of services on consumers’ terms. Berner says allowing patients online access to a consistent clinical team—essentially a multi-specialty group—is the healthcare delivery format of the future. Patients will be able to work with doctors, nurses, dieticians and other specialists for various kinds of virtual care. 

For brokers and employers wanting to delve more deeply into this space, it’s important to look at where telemedicine has proven results. When vetting a health plan’s offerings, Matthews, of Deloitte Consulting, recommends asking about its philosophy and strategy regarding virtual medicine. A blank stare, he says, likely means the plan’s leaders haven’t thought it through. If they do have a strategy, they can help identify the most relevant opportunities to a particular organization. 

“Maybe you’re interested in general telehealth but also in managing some particular disease states that your employees have,” Matthews says. “How employers can engage in that way is going to accelerate over the next couple of years.”

Dr. Alan Pitt, a neuroradiologist at Barrow Neurological Institute, expects opportunities to continue to expand the ways employees seek care. For example, he says, video conferencing may aid people who want to attend a visit with an aging parent when they can’t get off work. An employee will be able go to a quiet conference room during the day and video chat with a therapist. And a cancer patient in rural Wyoming will be able to seek care from a major cancer center from the comfort of his own home. 

According to Austin White, about 75% of emergency room patients are not being treated for a serious, acute issue. To help stem the tide of costly ERs as primary care venues, White co-founded OnMed, a technology company based in Clearwater, Florida. In March, OnMed launched its portable, self-contained medical units. 

The units are now housed in Mississippi and Florida and planned in other states soon. Because they are portable, they can be located anywhere, from resorts to universities, hospitals and airports. The sites are set up essentially as a miniature doctor’s office, with diagnostic tools that take height, weight and blood pressure, all downloaded by a medical assistant via televideo. Thermography can detect body temperature and determine where an infection is located. A handheld camera gives a physician a view into a person’s eyes, ears, nose and throat. 

But what is most extraordinary about OnMed is its ability to dispense prescriptions at the time of service. There’s a drug formulary inside of the station that houses common medications needed for urgent care visits like antihistamines, antibiotics, inhalers and EpiPens. The medications can also be tailored to each site; if an employer has a large population with diabetes, hypertension or cholesterol, its onsite unit can be loaded with those treatments. 

The cost for a visit is typically less than a traditional office one, White says—about $75 in a fee-for-service plan. OnMed also has per-member, per-month rates, paid by the employer, that run $10 monthly for each employee and cover office visits (the units are equipped with a card swipe machine that enables employees to present their insurance card or pay with a credit card).

Aside from primary care, the units can be used for behavioral health treatments, checkups for a wellness program, or monitoring patients who are managing chronic conditions like diabetes or hypertension. 

“We can’t do what we have been doing and expect better results,” White says. “This is where the industry is headed, providing appropriate care at the appropriate time. We’re not trying to take the place of primary care doctors and pharmacists. We are just adding accessibility.”

Tammy Worth Healthcare Editor Read More

More in Health+Benefits

Are Alternative Health Plans the Future?
Health+Benefits Are Alternative Health Plans the Future?
A breakdown of these for-profit insurance startups that have the potential to ke...
Health+Benefits A Pointed Conversation on Health Tech
A candid discussion on healthcare point solutions, technology investment, and mo...
Sponsored By Ochsner Health
Human Resources Risk Is a Business Risk
Health+Benefits Human Resources Risk Is a Business Risk
We got the new CEBE chair’s insights on five risk questions.