June 9, 2020: Unlike our previous News Day episodes, where we cover several stories, today is a deep-dive into a single article titled ‘Telehealth: A quarter-trillion-dollar post-COVID-19 reality’. This McKinsey article looks into telehealth research to explore its future — a key theme that we’re looking at closely here at This Week in Health IT. Before diving into the article, Bill gives some context on telehealth missteps over the last decade and why COVID-19 has accelerated the integration of telehealth. Bill discusses why he thinks telehealth funding will continue, possibly into next year, and how the past few months have been an incredible and massive telehealth that’s generated a wellspring of data. Data that will be vital in optimizing telehealth in the future. Bill then dives into the article which predicts that “$250 billion of current US healthcare spend could potentially be virtualized.” After establishing five models of virtual care, the article details five actions for payers, providers, and investors to take to figure out what telehealth means for them. While highlighting each action, Bill provides his take on the situation, as informed by the research generated by his team. Listen to this episode for insights into how McKinsey views the future of virtual care.
Key Points From This Episode:
News Day – Your Next Move in Virtual Care
Episode 263: Transcript – June 9, 2020
This transcription is provided by artificial intelligence. We believe in technology but understand that even the smartest robots can sometimes get speech recognition wrong.
[0:00:04.5] Welcome to This Week in Health IT. It’s Tuesday Newsday where we look at the news which will impact health IT. Today, I’m going to give you a little glimpse, we’re going to look at one article. I know, last week I tried to get to 10, this week I’m just going to do one. The reason we’re going to do one is because it’s a precursor to a topic that we are looking into very deeply here at This Week in Health IT and that is telehealth. What is telehealth going to do post-COVID and we’ve done a ton of research. I’ve — we’ve got some researchers looking at articles and I’m going to share a bunch of that with you today but we are only going to look at one article and really dive deep into some of the themes that we’re looking at here at This Week in Health IT.
My name is Bill Russell, healthcare CIO, coach, and creator of This Week in Health IT, a set of podcast, videos, and collaboration events dedicated to developing the next generation of health leaders. This episode and every episode since we started the COVID-19 series have been sponsored by Sirius Healthcare. It is their commitment to making the content available that has made the daily episodes possible. Special thanks to Sirius for supporting the show’s efforts during the crisis. I just want to encourage you to keep the stories coming. If you have a story that you want me to cover, please send it to me at [email protected]. I love getting the stories and we’re going to incorporate that into future episodes as we get going.
Today, as you know, we’re going to do a deep dive into telehealth, really focus again on this one story. But that’s really a precursor to what we are doing here at This Week in Health IT. What we’ve done is I have two researchers right now working who have collected just about every story we can find on Telehealth over the last year. They are bringing those together and you know, we’re reading them, we’re looking for themes, for facts, for modalities, successes, failures, growth, future plans, and all those things which may shape your plans in the future. This episode is really part of our process for research. We’re likely going to prepare or record a couple of Powerpoint decks from this research and we’re going to do that from a provider standpoint.
If you want to be a part of that, I would like some collaborators. If you want to be a part of helping me to put this together, just drop me a note, [email protected]. I will send you what we are working on once we get it complete or at least in our draft version and then you know, we would love your feedback, we’d love critique, we’d love additional content, we’d love additional slides, whatever you’re willing to contribute would be great and if you participate, you get the research as it comes out.
Thanks for doing that, again, [email protected]. All right, let’s get to it.
[0:02:59.0] BR: Let’s kick it off with – actually, the only story I’m going to look at today which is a McKinsey article. Before we go into the McKinsey article. Let me tell you where we’re at. Decided not to really waste your time with a lot of this. Here’s the 60 second version of where we are at. We meandered for over a decade or more around telehealth because the reimbursement was low, the incentives didn’t align, right? The reimbursement was low and their regulations were high. Not only that. The other thing is, the culture wasn’t ready for it, we had a lot of missteps in bringing it in. Some people did goofy things like, thought physicians could see patients here, then do telehealth, and see a patient, then they went to block scheduling and then we changed things. It’s all good but at the end of the day, we had a lot of missteps. Regulations high, reimbursements low, bad recipe. COVID-19 hit. What’s the number one thing to happen when COVID-19 hits?
Safety became the priority in healthcare. During a pandemic, safety becomes the priority, go figure. Offices closed, 80s changed their policies. Chronic patients still needed to be cared for, right? Safety required us to do it from a distance. CMS opened up 80 plus codes, commercial payers followed suit, security restrictions and regulatory requirements were lessened dramatically and that was the perfect storm, right?
Safety is the priority, new codes, we could get reimbursement for it finally and then the regulatory environment came down, meaning, we could stand up the technology in whatever fashion was best for the community and quickest really for the community. At this point, it paid to do telehealth and it was a lot easier to do without getting in trouble. Visits went up 10 fold across the board for healthcare providers.
And all of that is going to be covered in the report. But what I want to discuss right now is really what’s next. Before I go on to what’s next, I have a tendency not to celebrate accomplishments enough because I’m always looking at what’s next but don’t make that same mistake. This is a huge accomplishment for healthcare, right?
[0:05:12.8] BR: We should celebrate what we’ve been able to accomplish, the clinicians coming alongside training the clinicians, standing up to technology. Working with marketing, getting the patients lined up, redoing the websites. I mean, we did an awful lot to get this done. I don’t want to minimize that but I do want to start. I do really want to start talking about what’s next because you’re being pushed for what’s next. What’s your plan for what’s next with telehealth? What you anticipate is going to be next? We have a few assumptions here at This Week in Health IT, this is what I told the team. My assumption is that the emergency funding that’s in place which will come to an end in July. It’s going to continue for probably another year, at least, another 12 months. I think it’s going to be in place because there is no agreement, there’s no general agreement that we are through the thick of this thing yet, they’re still not in agreement whether there will be a second surge or not. It will at least be in place for sure between now and the end of the year but it will likely be in place for at least 12 months and some people are predicting 18. I think that’s a little aggressive but I think for the next 12 months, we are on solid footing to support telehealth and to put the foundation in for the future.
Now, after that, I think we have to look at CMS and we have to look at the payers, the commercial payers and say, what are they going to do? CEMA VERMA and that team is giving us every indication that they are all in, right? I believe they are all in. I believe they are all in, I think they were all in before but now they have a funding source. That is the sticking point, the funding source.
[0:06:54.1] BR: CMS doesn’t have access to money unless Congress gives them access to money, okay? There has to be a bunch of past or has to be appropriations of some kind given to CMS to continue this. Now, the good news is, we just did a massive experiment, right? Over the course of a couple of months, we did a massive experiment. We’re going to be able to look at the data and determine where it’s been successful, where it has not been successful. What clinicians did it work well with? What are the specialties that it worked well with, what patient population says it works well with? Where have we seen fraud or the appearance of fraud, where have we seen people taking advantage of this? They will have a ton of data to work with and that either should be just being scoured right now and over the next six months to determine where the funds — whatever gets appropriated and some will get appropriated — gets allocated. We want to make sure that it gets allocated in the areas that have the most return for healthcare and for the population.
All right, that’s the background. That’s what’s going on. Funding is the million-dollar question. I think you’re on solid ground for 12 months starting today, June 1st to June 1st. I think you would be on solid ground, CMS is going to continue to fund, you’re going to have some rumblings from commercial payers of pulling back from this but generally I think there’s going to be an awful lot of backlash if they do pull away from this. I think you’re on solid ground for about a year and I think there will be money appropriated and then it will be strategically placed in those areas that the data tells us it had the best impact. All right, let me get to the story and the reason I chose this story, first of all is it’s recent and second of all, it gives me a good platform to talk about a lot of the things that are showing up in our research as well.
[0:08:45.6] BR: Okay, this story is ‘Telehealth: A quarter-trillion dollar post-COVID-19 reality?’ And it’s a McKinsey article, is that the best way to say this, it’s sort of like, it’s an article that talks about the research that they’ve done. Think about that. Quarter trillion dollar post COVID-19 reality. 250 billion dollars where they’re saying that’s going to come from, well, they really didn’t give us five key areas where they believe that’s going to come from.
On demand virtual, urgent care is one of the areas they believe that this is going to come from which is no surprise. Virtual office visits are a majority of it which is no surprise either. Near virtual office visits, this is what we saw during COVID, right? It is the combined virtual access to physicians consult or some kind. It’s seeing a telehealth provider but there’s still some physical access to it like in COVID, in case of COVID, they would have to go somewhere to get tested and they would have to go somewhere for care and so there’s physical that follows the virtual.
It’s near virtual offices. I’m not sure I like that terminology, I’m sure it will be something better that comes up for that. Virtual home health services, I think it’s going to be — well anyway, it’s one of the areas that they believe that this quarter trillion-dollar opportunity exists. Virtual home health services is one of those areas I think it’s going to really grow significantly.
It may not be as big as virtual offices, it’s an on-demand virtual urgent care but it is going to grow probably the percentage wise, it’s going to grow the most. And then, tech-enabled home medication administration. This is the holy grail kind of thing. I hope we have a lot more ways to do this in technology. It is definitely playing a part in making this much more of a reality. But again, I think we’re still in the infancy of this and hopefully see some movements.
[0:10:49.6] BR: That’s where they think the quarter trillion is actually coming from — they talk a little bit about the money, actually, they actually do say in here; “Scaling telehealth does more than alleviate patient and provider concerns over the next 12 to 18 months until a COVID-19 vaccine is available.” They’re also talking — well, you don’t really see the telehealth funding will continue for that timeframe but they’re saying, until we get a vaccine that likely, there will be a ground or basis to continue the funding of telehealth. So that we don’t exacerbate the pandemic problem as it exists.
Where do I want to get to with this? What I want to get to is, they list out five actions for payers, five actions for providers and five actions for investors. Three groups of people that they think should be considering what telehealth means to them. I’m going to start with the payers. Even though the show is primarily for providers. Siri is trying to help me with the show, sorry about that.
Even though the show is primarily for providers, there’s an awful lot of information that they give around the payers which I think will inform what we do moving forward, okay? Let’s take a look at the five things that they give for the payers as next steps okay? The first thing. To find a value-backed virtual health roadmap, okay? What they’re saying is, huge experiment, lots of data, go through that data. Figure out where the value can be created and create those care journeys, the end-to-end care journeys if you will and drop virtual health in there where it makes sense to do so. The second thing they have is optimize provider networks and accelerate value-based contracting to incentivize telehealth. Okay, listen to that.
[0:12:52.4] BR: That’s going to go with the next one pretty closely. Optimize provider networks and accelerate value-based contracting to incentivize telehealth. What they’re looking at is, look at again, look at that continuum of care, look at your networks, look at your products and create ways that you can really optimize the value that’s been created from those networks.
Not only that. I think the next one is even more telling. Build virtual health into new product designs. Think about this. What they’re telling payers and what McKinsey speaks, people generally listen. Build virtual health and the new product designs. If you can imagine what they’re saying is, build your product designs that incentivizes telehealth from beginning to end, right?
Before you go to see your primary care physician, see a virtual physician first and determine if you even need to go there. You know, before certain types of follow up visits, it’s virtual care first. It’s use the digital front door features first instead of — our knee-jerk reaction is to go into the facility. I heard someone the other day on a webinar telling the story of they had a friend who is a Kaiser patient and something happened to their daughter and they immediately went to, “Well we’ve got to find a video console so I can see a physician,” and he was struck because he worked for a traditional health system and he was struck that the mindset of a Kaiser patient is virtual first. And that’s what they are saying for the carriers, for the payers to start thinking virtual first. Drive virtual first. If the healthcare providers were unable to build it, we will start to build it this way essentially and what you’re going to see is a whole new set of products that dictate through a certain extent that virtual health needs to be inserted at certain points with regard to their products and they will be able to drive down the cost of those products and still deliver a pretty high-level of care.
All right, so the fourth thing is to integrate virtual health into the care delivery approach and the 5th thing is to reinforce the technology and analytics foundation for this — and by the way, I think that is true across the board. The technology foundation that we put in temporarily should be one of your highest priorities right now is to figure out what the long term solution is going to be for your telehealth but think of the different modalities.
It is not just virtual visits. It is virtual consults, it is remote patient monitoring. It is Tele-ICU, it’s nurses stations, going into rooms. I mean, telehealth is a broad category and it is a holdover, I get it — from when Alexander Graham Bell said, “Come in to here Watson”, you know whatever. So yes, that was the first instance of telehealth but at the end of the day, it’s a broad category and you need to think in that broad category and then put the technologies in place that provide for the ability to deliver in a broad way broad range of areas.
[0:16:14.3] So we are going to talk about that in a minute, let’s talk about health systems, right? So McKenzie comes up with five things that health systems should consider. I need a drink, hold on. — All right, so the first one, accelerate development of an overall consumer integrated front door — and you know this is something we’ve been working on for a while but I think we have the wrong mindset when we go into this. A lot of health system technology people that I talk to, when they think of the digital front door they think of a portal, they think of a singular app and they’re like, “Well, my EHR provider gives me this digital front door,” or “We have an app,” I hear that all the time.
The reality is, it is not just an app. It is a series of technologies that form the foundation for interacting with your patients in a virtual setting, right? And so that can be an app, it could be a settop up box. It can be a phone. It can be information that’s being collected by a device that doesn’t even have a screen and sending it back to the EHR or some sort of set of clinicians who are looking at that data and responding via telephone, right? There is a whole host, there is a foundational set of technologies that we should be thinking about and putting in place that is going to enable us to do all sorts of modalities for delivering virtual care. And now the digital front door is — when we say ‘app’, it is so limiting. Because it can be multiple apps, it could be apps based on your condition and it could be apps based on the types of data that we are actually interacting with but people have to self-select. So it has to be easier than that but at the end of the day, you’re going to need to be able to put home monitoring in place. You’re going to need to be able to put a patient-generated data in place as well. So accelerate and development of the overall consumer integrated front door.
[0:18:22.2] With that being said, I think the other thing there we’re touching on is you have to be able to tell your populations how to interact with you from a digital standpoint. This is what Kaiser has done. Kaiser had educated their entire population on this is how you interact with us. So this isn’t just a technology project. It is far from just a technology project. This is a technology project. It is an operations project, it is a clinical operations project. It is a marketing project, right? Your marketing team has to get the word out there, “This is how you interact with us. We are now a digital company. We learned through COVID to do these things effectively and we are going to continue to do them for the good of our community and for the good of our population” and I would create campaigns and get the word out there. You do not want people to think, “Oh that was just a COVID thing” and then snap back to the old types of behaviors if you will.
Especially once we start to integrate virtual care and we are going to get to that. So that’s number one, digital front door. Number two, segment the patient populations. For example, with specific chronic disease and specialties, whose remote interactions could be scaled with home based diagnostics and equipment, right? I think that is one of the things that’s changed pretty dramatically is that people want to interact with the health system differently.
I am going to give you a short story on this, which is we had dinner last night with neighbors. The first time we’ve done that in months and we just moved to a new place. A new neighborhood. I haven’t really met our neighbors, our next door neighbor set up a dinner with multiple neighbors and we were scheduled to go over there. We went over there, it was just them, the other neighbors did not come over because they are varying degrees of comfort with social interactions still.
[0:20:08.7] As they should be, right? And everybody has to step back into the world at their own pace. Well, that is going to be true for our health system as well and we have to take into account that there are some people that we’re going to have to care for in a home setting. All right, what technologies do you need? We’ve learned so much the first time we did this back in 2011, I believe it was. You know we have put devices into people’s homes. We had to learn how to go into people’s homes, which is not easy in and of itself, right? So you’re now going into their homes. You need permission to go into their homes. We had to set up technology in their homes, something we were not adapted to yet at that point. We had to set up technology that they couldn’t mess up, right? At first we gave them some technologies and they move it around and it would lose Wi-Fi connection and the diagnostics we were trying to get back, we didn’t get back.
We have to think through this. Think through the populations. Think through the continuum of care and what technology are we going to use and then think through solutions that are really bulletproof for use in the home.
The third thing, build the capabilities and incentives of the provider workforce to support virtual care, all right. If you don’t align incentives, there is no reason to do anything. Incentives, the financial incentives have to align. You need your clinicians to be excited about delivering virtual care in all of its forms. So figure out how to align with those incentives and make sure that the workforce is aligned with blocked scheduling — whatever else needs to happen in order for them to feel comfortable doing it.
[0:21:41.5] The fourth thing, measure the value of virtual care by quantifying clinical outcomes. This gets back to that metrics and analytics foundation that we need to have in place. We need to be so good at the numbers and if we are going to rely on CMS to say, “Hey, here is what is effective and here is what’s not effective,” we are missing the boat. We should be able to generate the same kinds of numbers around telehealth that CMS is going to be required to do. That commercial payers, I guarantee you, are already doing. We should be able to look at how effective have we been, you know what level of outcomes are we seeing? What kind of follow-ups are we seeing? This will fundamentally change how we look at risk, how we look at care, how we look at cost and so we need the analytics and the tools around it.
And then the fifth thing that he says is consider strategies and rationale to go beyond Telehealth. And they talk about clinic visit replacement that is to drive growth in new markets and population and scale other applications. For example, Tele-ICU, post-acute care integration. Now with that being said, if you are going to stand up at Tele-ICU and start offering it out in the community, someone recently talked to me about this and I said, “Look, there is a handful of companies that are doing this but their income on it really requires them to get a sales force and sell it to other health systems.” It’s one thing standing up for yourself, it’s another thing to actually take it to market. You know doing Tele-ICU for yourself is almost a must have. I am not sure why you’re not doing that today. It is more efficient, more effective but if you are going to really think of it as another source of revenue, you are going to have to sell it to a bunch. That is a different business model all together. Just understand what you are stepping into.
[0:23:26.1] And then — what was the other thing I was going to say — that clinic replacement strike growth in the new markets. So this has been effective for some health systems in going in new markets. Now because of the state barriers that we used to have for clinicians practicing across state lines, it was tricky. It’s always been tricky because of that but within the state, we have seen some effective programs and I talk a little bit about Baylor Scott & White going into Austin, Texas.
So investors, I will cover these just because they’re here and worth looking at. I am a little over anyway. Investors in health systems — in health services and technology firms should consider. Number one, develop scenarios in how health, virtual health will evolve and when. Assess impact across virtual health solutions service types, develop potential options, identify the assets and capabilities to implement these options and number five, execute, execute, execute. “The next normal will rapidly take hold and those who can best anticipate its impact will create disproportion of value. Don’t underestimate the potential of the network effect.”
I will say as I read that, one of the things I am reminded of is many health systems just look at it and say, “Well, we’re going to go out and sign up with…” fill in the blank provider. I would be really careful. I remember when we were looking at these, a handful of solutions came to us. I looked at it and read the contracts and I was new to healthcare so I had that clean perspective and I am looking at it going, “Hey, what’s going to keep this company from competing with us for patients in the future? You know, what are we doing around the data to make sure that they are not utilizing the data for a future endeavor that will compete with us?” I mean, there is a whole host of questions that need to be asked before you just say, “Well, our telehealth provider is Telehealth R’ Us.” Read that contract closely, understand what their rights are with your patients because at the start of the contract they are your patients and you potentially could be handing access over to them. So that is something that you should consider, keep in mind or to consider. I am not going to make a new word.
[0:25:45.0] That is all for the news for this week. Again, if you want to participate in the research and the reports that we are creating around telehealth, I would love to have you do that. We are generating the reports right now and just drop me a line, [email protected]. I am really looking for health system providers, people who work for health system providers who want to be a part of seeing that data and provide us some feedback.
Special thanks to our sponsors, VMware, StarBridge Advisors, Galen Healthcare, Health Lyrics, Sirius Healthcare and Pro Talent Advisors for choosing to invest in developing the next generation of health leaders. This show is a production of This Week in Health IT. For more great content, check out the website, thisweekhealth.com or our YouTube channel.
If you want to support the show, the best way to do that is to share with a peer. Second best way, sign up on our YouTube channel. I want to make you aware of the fact that we are actually pulling back a little bit from the daily shows so that we can do a couple of other things. We are getting back to our mission. I thought it was important to do the daily shows during the COVID crisis but now, I think it’s equally important for us to do research.
Like the research we’re doing on the telehealth, get back to some of the collaboration events we were doing between health systems and providers or between health systems, executives and other executives and some of the things around insights and staff meetings that you guys have signed up for and drove. So I want to get back to producing some of those and getting some of those out. So we are not going to be putting out as many shows on a daily basis.
But we are going to be producing great content for you as we move along. So please check back often, we’ll keep dropping shows probably on a schedule of Tuesday and Friday definitely, probably one on Wednesday or Thursday as well. We’ll continue to drop three a week and then scale back to our normal schedule of Tuesday and Friday. Thanks for listening. That is all for now.