Alternative payment models advancing telehealth use

Alternative payment models that incentivize value and improve population health management are a catalyst increasing telehealth’s acceptance. Employers also realize the potential cost-saving advantages of offering telehealth benefits under alternative payment models.

In her article “Telehealth under alternative payment models,” Milliman’s Susan Philip highlights some alternative payment models adopting telehealth services to improve the quality and delivery of care. In addition, she discusses how an assessment of these solutions can help organizations gauge their prospective returns on investment (ROI).

Here is an excerpt:

Cost savings and efficiency gains under alternative payment models will be driven by delivery system transformation and successful population health management initiatives. Telehealth has the potential to boost the impact of population health management initiatives while improving access and convenience of healthcare delivery.

Telehealth’s potential is not lost on investors and employers. In 2014, companies focused on telehealth technologies received about $285 million in venture capital funding, a substantial increase from less than $100 million in 2013.6 A recent employer survey indicated that about a third of employers expect to offer or are considering offering telemedicine consultations to employees as a low-cost alternative to emergency room or physician office visits for nonemergency health issues.7 The same survey found that telemedicine has the potential to deliver close to $6 billion in savings to U.S. companies.

Such high expectations must be calibrated. To conduct appropriate ROI evaluations, telehealth solutions and programs should be designed to consider the purpose of the solution. In general, we think of telehealth solutions for one of three primary purposes: improve access to specialty care, support care management, or provider nonemergency acute care services….

By design, telehealth programs intended to provide convenient access to a limited set of nonemergency, acute care services can be expected to increase the use of those services. Vendors such as Teledoc, American Well, or Doctors on Demand typically offer 24/7 video visits for common symptoms that may require consultation with an advance care practitioner or a physician. Examples include UTIs, skin issues and rashes, diarrhea and vomiting, and cold and flu symptoms such as sinusitis, or bronchitis. These services are not designed to substitute for an ongoing relationship with patients’ primary care providers but rather to provide an alternative to urgent care or ER visits for nonemergency conditions. Robust evaluations of the potential return on investment should consider whether services merely drive up total use and cost of healthcare for a given population, or whether the telehealth services successfully replace other, more costly services such as emergency care or urgent care visits.

Health insurers, purchasers, and investors will look to properly designed evaluations to assess return on investment and metrics related to utilization, costs, access, and quality of care.

For perspective on how telehealth technologies are being used within microinsurance schemes in sub-Saharan Africa and rural health clinics in California, read the article “m-Health: Remote access.”

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