Market demands for “care everywhere” have brought telehealth to the forefront, and the outlook is quite positive. Utilization is up. Policy and payment details related to telehealth are being ironed out, and value-based models are ready to pay off for providers who engage their patients on digital channels.
Even with significant year-over-year growth trends, however, telehealth still only accounts for less than 1% of line items in the commercial market today. That includes provider-to-provider encounters as well as patient-to-provider. (FAIR Health)
When will telehealth reach critical mass? It’s impossible to say. Every stakeholder has their own definition for what constitutes critical mass, and each of those marks are wildly moving targets.
That being said, we’ll be particularly interested to watch telehealth’s performance in the Smart Health Market. Here are a few blips that have appeared on our radar recently.
1. Thirty-somethings and urban communities are the most frequent users of telehealth.
While the youngest, most tech-savvy consumers might seem like ideal adopters of telehealth, they don’t have that many care needs. So, the 20-somethings actually aren’t the telehealth champs you might expect. A recent review of commercial insurance claims by FAIR Health showed that those in the 31 to 40 age group used telehealth services the most, accounting for 21% of claim lines between 2014 and 2018.
Urban locations account for the most telehealth claim lines overall, and they have shown more significant growth than rural locations. FAIR Health notes an increase of 1,289% in urban areas compared to 482% in rural areas from 2012 to 2017.
Keep in mind one defining advantage of telehealth is its ability to bring care to the underserved — especially in rural areas. There’s clearly more work to be done.
2. Physicians are embracing telehealth just as much as patients.
In a survey, Doximity found the number of physicians reporting telehealth as a skill has increased 20% per year over the past three years. That’s pretty impressive growth in a short amount of time. (Doximity)
When examining U.S. metro areas, the survey also found that docs in the biggest of the big cities — San Diego, Miami, Atlanta, and New York — show the most interest in telemedicine. Radiology and psychiatry top the list of medical specialties engaged in telemedicine use.
3. Telemedicine is gaining traction in behavioral health.
Several states are enacting regulations that allow more behavioral providers to use telehealth. For example, regulators in New York recently updated a set of rules to broaden the list of licensed professionals who qualify. Now psychologists, social workers, mental health counselors, marriage and family therapists, art therapists, and psychoanalysts can use telehealth. Previously, only psychiatrists and psychiatrist nurse practitioners could connect with patients on digital channels. (New York Office of Mental Health)
And it’s clear that behavioral health — with its serious provider shortages across the country — could benefit from any tool that would allow licensed professionals to extend their reach.
4. The Federal Communications Commission is looking to enable telemedicine.
When a federal authority gets behind an idea, you know there’s going to be market impact. In July, the FCC proposed a three-year, $100 million pilot program for low-income patients, tribal populations, and veterans. Essentially, the Connected Care program would defray the costs of purchasing broadband Internet access for patients by 85%.
We also couldn’t help but notice that FCC Chairman Ajit Pai in his written statement cited the nation’s $3 trillion annual healthcare spend and typed out every single one of the 12 zeros in that staggering figure: $3,000,000,000,000! Pretty sure cost savings will be on his mind once the project gets off the ground. (FCC)
5. It’s uncertain how much financial impact telehealth adoption could have.
Determining the ROI for telehealth is a challenge. The “yes, but …” situation appears quite often in cost-benefit studies.
For example, the GAO determined new telehealth coverage for Medicare Advantage that begins next year could save patients $557 million over a decade. Savings would come from reduced travel time, according to the analysis. And yet the office also warns of some $80 million in other costs, attributed to the reclassification of telehealth benefits. (GAO)
A separate study notes that telemedicine might actually inspire extra utilization of health services. Researchers found that 16% of patients who would have otherwise “done nothing” about their health concern ended up using a telemedicine service, suggesting that telemedicine’s availability might have caused new utilization. However, patients avoided more costly emergency department and office visits, producing net savings overall. (AJEM)
Our Take: With a market that’s expected to exceed $130 billion by 2025, telehealth represents an opportunity that checks a lot of boxes, including consumer preference, holistic care, and (potentially) cost savings. We haven’t reached the tipping point for telehealth, but trends are certainly on an upward slope.