Catherine Murphy
Catherine Murphy
COO

This past week, I was at the American Telemedicine Association’s annual conference, and one of the things I heard over and over was the growing need for health systems and providers to offer virtual care. But health systems are often in a difficult position when it comes to technology investments like virtual care. They need, not only to prove it aligns with their mission and organizational objectives, but that it makes financial sense.

Healthcare organizations are increasingly being asked to do more with less—to think as businesses with an aim to expand and grow revenues. In fact, non-profit health systems are often caught between their business needs, the aims of their missions, and of course, delivering high quality care to diverse patient populations. The great news is that virtual care can help bridge that gap, supporting health systems in expanding access to care, both by increasing convenience and lowering costs while aiding in expansion and growth.

The Business Case for Virtual Care

When I say that building a business case is less clear that doesn’t mean it is difficult, more that, because the technology is relatively new and evolving, health systems sometimes find it challenging to pin down how they want virtual care to impact their business. While expanding access and enhancing patient experience are mission-driven goals, they also can create impacts on the bottom line. Other facets of virtual care, like increased clinical efficiency can bring a positive impact to the bottom line, particularly for populations where the health system owns a portion of their risk (e.g., self-insured employees or other owned health plans). But the real winner in building a business case has to do with gaining market share.

Virtual Care Meets Market Share

We recently published a study with MultiCare Health System in Washington that demonstrated the patient acquisition potential of offering a virtual care service to the marketplace. Through the study, we found that 34% of virtual care users who had not received care from MultiCare in the 24 months preceding their virtual visit sought in-person care in the 12 months after their virtual care experience – more than 3 times that of a control group.

So, how do you set patient acquisition goals relative to your market? Start by figuring out how much of the market you currently have—your market share.

What’s Your Market Share?

To calculate market share, try this for a nice-round-numbers approach. You, or someone at your organization, probably have a relatively good handle on how many patients you treat per year, on average. Divide that by your approximate market size, which you can find this with a quick Google search.

Setting Market Share Goals

The 34% patient conversion rate MultiCare achieved is tied to the closely circumscribed study cohort, imagine what that could look like relative to a major metropolitan market. For example, imagine you have 12% of a market of 3 million – that’s a nice size patient panel of 360,000. But, what could increasing your market share just 1% do? Before you pull out your calculators, I’ll tell you that it would add 26,400 patients to your health system—or 1% of your market potential.

Market Potential

market potential equation

Once you know your current market share, set attainable goals. Start with an aim of increasing your market share .25%. Using our hypothetical scenario above, that translates to 6,600 new patients.

Working with the 34% conversion rate, how many virtual visits would you need to achieve that .25% increase? Once again, I’ll do the math for you. You would need just over 19,000 new patients to come through your virtual care service to gain your 6,600 new patients and .25% market share increase.

That may sound like a lot, but there are budget sensitive strategies to increase growth and virtual visit volume that can help you achieve your market share and patient acquisition goals.

Accelerating Growth

From my perspective, one of the most interesting findings of our study with MultiCare is not the patient conversion rate but the market opportunity. The independent analytics firm who compiled and analyzed the study data found that understanding the demographics of patients who were likely to use virtual care meant that targeting just 20% of the market would yield 82% of the people most likely to use virtual care. That means highly focused, targeted marketing efforts could significantly increase virtual care utilization.

It’s exciting to hear from various health system customers about how they are leveraging virtual care to reach new patients and broaden access to care. Several of our health system partners are unlocking market potential by contracting with local health plans and employers to offer virtual care to their members and employees. Combined with targeted marketing, this approach can help accelerate your health system growth and put you well on your way to achieving your objectives.

Tags: industry ROI

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