Two Very Different Reasons for Implementing Telemedicine

Why do hospitals launch technology-based telemedicine services?  To extend their geographic reach? Because doing so is the latest trend?  Because they can?  Because their competitors have similar programs?

Last week, I had the privilege of moderating a panel called “Achieving Provider Buy-In for Connected Healthcare Programs” at the Care Coordination and Technology Congress in Atlanta. We focused largely on why hospitals start telemedicine programs.

The first order of business was defining terms.  “Telemedicine” can mean:

·         Traditional use of technology for real-time clinical visits to patients in a remote location


·         Any type of health activity – such as remote patient monitoring, app-based care, etc. –  conducted using technology

Our discussion focused primarily on the first definition.

Unfortunately, a family emergency prevented one of our scheduled panelists attending.  However, we got rich insights from the other two experts.  I especially enjoyed their insights into two very different reasons their organizations implemented telemedicine programs.

Rob Marchuk, Vice President of Ancillary Services for Adventist Health on the West Coast, described how traditional telemedicine has allowed his system to address the health needs of its rural population spread throughout three states.  With about 20 hospitals and 300 rural health clinics, Adventist is California’s largest provider of rural health.  Its rural outreach fits the classic model for telemedicine:  extending the reach of specialists into areas that would otherwise go underserved.  Since the program began about four years ago, Adventist has expanded it to include other non-video modalities.  And Adventist’s telehealth program has emerged as a critical element of the system’s integrated care model.

The other panelist – Erich Fogg, PA-C, MMSc. EM-CAQ – is Director and Lead Provider at York Hospital Virtual Care Walk-In Clinic in York, Maine.  Since York is essentially part of the Greater Boston market, patient access is not an issue.  Instead, York developed the virtual care program as a cost avoidance and ER throughout management program.  

York Hospital offers three levels of immediate care: 

·         Standard ER services – at full ER prices

·         Low-intensity walk-in care – at $125 per visit

·         Virtual visits – for a $39 flat fee

Patients access the York website and describe their medical situation.  If the triage process identifies the patient as a potential candidate for the virtual visit program, they are offered the option of a video conference with a clinician using their smart phone, tablet or camera-enabled computer.  Less complex problems such as headaches, rashes, sprains, and seasonal allergies are good candidates for virtual visits.  This program has proven to be a convenient, cost-saving care option for patients who otherwise would have incurred much higher costs – and would have increased unnecessary traffic –  through more conventional care delivery channels.

The audience at the Care Coordination and Technology Congress was impressed by the effectiveness of these very different applications of telehealth care, each tailored to the health systems’ respective market needs.  As virtual care continues to proliferate, we can expect to see more and more examples of how it continues to transform healthcare delivery in creative and cost-effective ways.


What Do Powdered Wigs and the ACA's Cadillac Tax Have In Common?

At 18% (and growing) of GDP, healthcare remains one of the biggest targets for reform.  The word “unsustainable” is regularly bandied about, and I wouldn’t disagree.

I have been in this field long enough to have seen numerous restructuring initiatives promising to tame the healthcare beast come and go with only limited impact.  DRGs, HMOs, PPOs, Provider-Sponsored Organizations, ACOs, and a host of other concepts were all designed to create new incentives to increase efficiencies and lower costs.  Although each has had some impact, few people would argue that the industry has been significantly transformed.  

As the Affordable Care Act was being debated in 2010, a phrase often heard was “bending the cost curve.”  Despite some positive aspects of the ACA, there is little evidence that the cost curve has significantly changed. 

Why is achieving meaningful improvement so difficult?  There are many, many reasons, and I wouldn’t even begin to try to rank-order them or even identify them all.  Having said that, though, I do believe one factor is that policy makers often – either intentionally or through obliviousness – neglect to factor in changed behavior when incentives shift.

One simple example is the nosedive in revenue from the ACA’s so-called Cadillac tax.  The ACA tax bakes in a 40% tax on every dollar above a predetermined premium level.  This concept has been unpopular with payers and employers from the start, so many found a way around it.

Modern Healthcare reported in March 2015 that the Congressional Budget Office had lowered its estimate of the total revenue generated by the Cadillac tax by a full 41% between January and March 2015.  Plus the January 2015 number was already down significantly from the original pre-passage 2010 numbers.  

Why this dramatic decline?  Here’s Modern Healthcare’s take:  “Many employers have started to scale back benefits in anticipation of the excise tax.”  So a big portion of the ACA’s original revenue will never materialize.

At the risk of being rude, let me say, “Well, Duh!”  People are smart.  When you change the rules, people recalibrate their behavior to optimize their personal outcomes.

This is not a new phenomenon.  The January/February issue of Mental Floss magazine cites an amusing anecdote from the late 1700s:

Powdered Wig.jpg

Britain Wigs Out:  With ever more foreign wars to wage, British Prime Minister William Pitt hit upon a heady idea to raise funds – place a tax on wig powder.  Rather than generating cash, the tax unintentionally changed men’s fashion, and by the 1820s, powdered wigs were considered so 1790s.

You would think politicians would learn.

Special Posting: MODERN HEALTHCARE Comment Letter

The November 6 issue of Modern Healthcare featured an opinion piece entitled What’s behind America’s epic fail on diabetes care in which Editor Emeritus Merrill Goozner describes recent efforts around public awareness, prevention and treatment efforts, none of which seem to be having a significant impact.  He also asks a question that prompted me to submit an idea that could potentially result in real improvement for this and other prevention-oriented issues.

I’m please that Modern Healthcare published my piece.  Here it is:

In Merrill Goozner’s article What’s behind America’s epic fail on diabetes care (November 6) he astutely asks, “In our fragmented insurance system where people are constantly changing plans or aging into Medicare, why spend money today when the benefits will accrue to some other payer down the road?”  He’s exactly right under the current system.  

However, here’s an idea.  We know that some preventive care is truly cost-effective if you look over a multi-year horizon.  Although I’m not normally a fan of increased regulation, requiring all insurance companies to cover those preventive services that are known to be not only clinically effective, but also cost-effective over time would eliminate the impact of insurance churn.  If Insurance Company A pays for truly cost-effective preventive care for Patient 1 who subsequently moves to Insurance Company B, it is just as likely that Patient 2 might switch from Company B to Company A, thereby balancing the economic scales.  At that point, it becomes a market share issue, introducing another element of competition where those insurance companies that achieve the highest level of patient care and satisfaction come out ahead through enrollee retention.  

Of course, paying for additional preventive services would result in short-term cost increases for the overall system, but the benefits should balance out if only those preventive services that are cost-effective over the long term are covered.

What If You're Selling to Hospitals and You Have Minimal Healthcare Experience?

“I’ve spent the last seven years in the automotive industry, streamlining logistics.  Our company has figured out that hospitals aren’t very efficient, so we’re bringing business principles to hospitals.”

So announced the head sales guy of a startup during the early Internet days as he sat across my desk, hoping for Georgia Hospital Association’s endorsement.  As Executive Vice President, I was the first stop for companies seeking a working relationship.   

There were two things wrong with his approach.   First, his arrogance was palpable.   Although few people point to hospitals as sterling examples of efficiency, his approach betrayed a serious lack of respect for members of the hospital community.  Physicians, therapists, nurses, executives, and others have devoted many years of formal education and, in many cases, years of hands-on experience dealing with highly complex clinical and patient care management issues.  Having a brash, young-ish sales person puff his chest out, announcing that he is there to “fix” hospitals, does not go over well.


His second problem was broadcasting through his naiveté his “outsider” status.  Although there are times when an outside perspective can breathe new life into systems, it’s also helpful to have a basic knowledge of those systems.  This guy wanted to demonstrate how the newly introduced Internet could streamline the procurement process.  “Do you want me to demonstrate how easy it is?” he asked.  “What should I order?  Bandaids?”  

What physician would ever get on the Internet to buy “bandaids”?  In my 24 years of meeting with vendors hoping for association endorsements, I could usually sniff out a healthcare newcomer within about four minutes.

Any time someone is selling a clinical product or service, tipping their hand as a hospital “outsider” can be a real impediment.  Many within healthcare are rather unforgiving when it comes to tolerating “foreigners” who implicitly claim clinical expertise.

So, what should you do if you have limited healthcare experience and are offering a clinically related product or service? 

·         First, treat hospital personnel with utmost respect.  Although they may lack certain technological or executive skills, they are in their position because of expertise developed over many years.

·         By all means, learn as much as you can about the area your product touches.  Don’t mispronounce terms.  Learn important definitions and the meanings of relevant acronyms.  And for goodness sake, remember that HIPAA is spelled with one “P” and 2 “A”s.

·         If your product touches patient care and you personally don’t have much of a clinical background, it’s vital to point to others on your team with the credentials and credibility to get you past the front door.

·         Recognize the need for clinical and/or operational verification of your product or process.  Blinded research studies validating your methodology are the gold standard but are difficult and expensive to arrange.  Lacking that, being able to point to referenceable pilots or demonstration projects will go a long way.

So respect, humility and preparation will serve you well as you interact with the clinical world.

Is Technology Really a "Solution"?

Last Friday, I was honored to moderate a panel on emerging, disruptive technology for the Ohio State University Graduate Program in Health Services Management & Policy Alumni Society annual Management Institute.  Panelists were:

·         Dr. Nikhil Shah, Chief of Minimal Access and Robotic Surgery, Piedmont Health Care

·         Justin Gernot, Vice President Business Development, Healthbox

·         Chris Coloian, Senior Vice President Revenue and Growth, Verscend


Each one of them offered great insights, and I heard many glowing reports about how effective the panel was.

One of my questions dealt with why senior healthcare executives sometimes are less than enthusiastic about adopting technology.  The panel agreed that sometimes vendors create unrealistically high expectations of what their products or services can do and often call them “solutions.”  

Part of me gets that.  The developers have worked hard to identify a specific problem and craft a methodology and technology to solve that problem.

But I also have mixed feelings about calling these technologies “solutions.”  The classic non-tech definition of “solution” is something that completely fixes a problem.  Until the issue is fully resolved, it really hasn’t been solved.  An algebra problem isn’t solved until “x” has been identified and the student runs the value of “x” through the original problem and verified that all the numbers check out.  Rubik’s Cube isn’t solved until each face shows only one color.

But healthcare problems are typically much harder to tame.  Justin pointed out that, when it comes to most healthcare applications, software is only part of the equation.  The other two crucial elements that must be addressed are:

·         Identifying, documenting, and optimizing the underling workflows that drives the process being addressed – Without this, all you are doing is becoming more efficient in carrying out a dysfunctional process.

·         Getting buy-in from all people involved in the process – Many hospital personnel have developed heel-dragging into an art form.

It’s only when all three elements – the technology, the process and the people – are aligned that you can say the problem is on the way to being truly solved.  I realize that I am nit-picking.  Perhaps this is the old English major in me rearing its head.  

Dr. Shah observed that failing to recognize a challenge’s complexity can create the impression that the vendor views their product as the proverbial silver bullet that will fix all the hospital’s problems.  Seasoned clinicians and executives have heard it all and can sometimes be jaded about overblown vendor claims.  

Bottom line:  I urge my clients to carefully consider whether or not to refer to their products as “solutions.”  It’s not the kiss of death, but I believe it can make them come across as “salesy” and glib and can undercut their credibility.