Telehealth at a Crossroads
By Kïrsten Staveland, Dione Fugere and Brian Parkinson
Health Watch, January 2022
Before COVID-19
Two years ago, before COVID-19 changed everything about how we provide and receive health care, telehealth was largely provided by third-party vendors to treat a narrow range of acute one-and-done conditions. The value proposition was simple: a fast and easy member experience would drive satisfaction and engagement; high member satisfaction and engagement would drive health plan savings and member retention.
Carriers and employers contracted with these vendors—which include familiar names such as Teladoc, Doctor on Demand and MDLive—as a low-cost supplement to their existing brick-and-mortar provider networks. Telehealth vendors brought their own providers with them—licensed doctors and clinicians who provided video, telephone or text-based visits from the comfort (and lower cost) of their home offices.
Telehealth providers were limited to treating simple conditions that could be confidently diagnosed without an in-person exam, but many common conditions still fit this bill. Surely patients would recognize the convenience of telehealth (e.g., asynchronous texting about a child’s suspected pink eye between work meetings, or video conferencing on demand in the middle of the night about a stomachache) and turn to telehealth as a first-line treatment option.
If each telehealth visit would otherwise have been an urgent care or emergency department visit, as these vendors pitched, it’s easy to see how widespread telehealth adoption could have resulted in cost savings, especially since telehealth vendors were largely contracted on a fixed per-member-per-month expense basis.
But going into 2020, telehealth utilization remained low.
During COVID-19
No adage summarizes telehealth’s transformation during the COVID-19 pandemic more than the one about necessity being the mother of invention. When COVID-19 hit the United States in the early spring of 2020, the fact that virtual care was the primary domain of standalone telehealth vendors became a real problem for clinics and facilities that saw a near-total drop-off in patient volume.
The problem was simple: facilities were prohibited from providing nonessential care, and members were scared to go in even for care that was deemed essential.[1] Even after the nonessential care limitations were lifted, an estimated 40 percent of Americans continued to defer care out of caution.[2] The result was a financial crisis for America’s providers and a health crisis for its insureds. Not only were complex patients going without critical care, but numerous patients risked missing out on preventive care. And less care meant less revenue for providers.
In response, clinics and hospitals scrambled to offer virtual care, a herculean effort of time, money, and training. Not only was there technical infrastructure to purchase, install and integrate, but facilities also had to figure out which services to provide via telehealth and how to staff those appointments.
Many insureds, faced with no other options, turned to virtual care for the first time.
To facilitate the expansion of telehealth, America’s state and federal health care regulators took several steps to expand access: relaxing coverage rules for Medicaid and Medicare patients,[3] temporarily relaxing licensing requirements,[4] mandating payment parity for providers[5] and instituting cost-share relief for insureds seeking COVID-19 testing and vaccinations and, in some cases, even treatment.[6]
Indeed, by summer 2020 most insured Americans had expanded access to telehealth. Analysts calculated a 78 times increase in office visit and outpatient telehealth usage from February 2020 to April 2020, and from February 2020 to July 2021, a 38 times increase.[7] While uptake varied by specialty—with mental health and substance use disorder treatment leading the way—most clinics found some way to integrate telehealth into their practice.
Clearly, from the perspective of utilization, telehealth—as a viable alternative to in-person care during a pandemic—worked. And with COVID-19’s nudge—or was that a push?—toward cultural acceptance, the health care system is in a better position to capitalize on telehealth’s original promise of expanded access, lower cost and better outcomes than it was two years ago.
But in the wake of the pandemic, it is just as clear to us that if telehealth is to live up to its full potential, some changes are needed. Following are five ideas for improving the delivery of telehealth going forward.
Tomorrow
First, to capitalize on the promise of lower cost, telehealth needs to both cost less than in-person care and be reimbursed at rates reflective of the lower cost. While the impromptu and urgent way telehealth had to be built by traditionally in-person providers as a response to the pandemic may not have cost less than in-person care (indeed, it may have cost more in some situations), going forward there is an opportunity to redesign telehealth infrastructure so that it does lower costs. For example, providers could work from home or be consolidated in fewer locations so the overhead costs of support staff, medical supplies and building expenses are eliminated or spread out over more providers.
Second, to incentivize members to use telehealth as a first-line treatment option, insurers and employers could make telehealth the standard of care for low-acuity services and use health plan coverage rules and benefit designs to steer members and physicians. For example, these types of services (which might include prescription refills, postsurgical check-ins and rash consults, and which can be addressed with a 5- to 10-minute consult) could be covered at a $0 copay if provided via telehealth, but not covered otherwise.
Third, existing technology platforms could be improved for the benefit of both patients and providers. To support high-quality and uninterrupted video visits, patients need reliable, high-speed internet access and a device they can confidently use. There is an opportunity to be thoughtful here and design devices that facilitate access by people of all ages, (dis)ability levels, economic backgrounds and geographies, all of which have historically impacted access to health care. To support the delivery of integrated, nonduplicative and holistic care, clinics need a platform that allows them to seamlessly transition patients between virtual and in-person care.
Fourth, to ensure telehealth provides high-quality care, connected devices could become the standard for the telehealth treatment of chronic conditions. Blood pressure cuffs, blood sugar monitors and heart monitors that let patients track and share their information already exist, and developers are only increasing what can be done via remote monitoring.[8] The more providers can integrate connected devices, the more in-person services can shift to lower-cost remote delivery.
Fifth, states could relax licensing laws and allow physicians to deliver care virtually across state lines when safety isn’t compromised. State regulators could consider whether the benefits of allowing providers to practice across state lines (for example, continuity of care when physicians or patients move, and access to specialists) are worth getting rid of redundant licensing requirements.
During the Next Health Care Crisis
The pandemic has taught us that our health care system must be more flexible and willing to meet people where they are. By integrating a sustainable and robust telehealth delivery system into our health care culture, not only can we make positive strides in American health care, but we can also alleviate strain on our provider system and put ourselves in a position to better weather the next crisis that impacts health care delivery.
Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the editors, or the respective authors’ employers.
Kïrsten Staveland, ASA, MAAA, is a principal in the Actuarial and Financial Group at Mercer. Kïrsten can be reached at kirsten.staveland@mercer.com.
Dione Fugere, MBA, CEBS, is a principal and senior consultant at Mercer specializing in strategy development for self-funded employers. Dione can be reached at dione.fugere@mercer.com.
Brian Parkinson, FSA, MAAA, is an associate actuary with Mercer’s Actuarial and Financial Group focusing on employer group health plans. Brian can be reached at brian.parkinson@mercer.com.