Virtual care has remained a steady force on the front lines of the ongoing COVID-19 pandemic. The initial driver for the uptick in virtual visits was the ability to access care without risk of exposure to COVID-19, but today patients and providers have come to see the broader value of virtual care in healthcare delivery. Industry experts believe that patients will continue to access care virtually, at least in some capacity, forever.
Now that virtual care has proven its worth there is a large question that still remains: what is the fair price for a virtual care visit?
Let me pose two examples from outside the realm of healthcare as we try to answer this controversial question:
Snail mail—or price as a function of COST
It costs $0.55 to send an “old fashioned” letter via snail mail and almost nothing to send a virtual one (email). Which begs the question—is the physical delivery of a message really worth exponentially more money?
In the case of the stamp, price is a function of cost. It’s expensive to deliver a letter, just ask the Postmastermaster General. Kidding aside, cost plus pricing is too often the default in healthcare as well.
Trolls World Tour release—or price as a function of VALUE
Earlier this year, I noticed a charge for $21.56 on my personal credit card from Amazon for the digital delivery of Trolls World Tour (I’ll save my movie review for another time). Does the fact that it only costs Amazon pennies to deliver the movie over my Roku mean that I’m being priced gouged?
In this case, we see a value-based pricing model. The value of the movie was at least $21.56 for my family on that day, regardless of the fact that it only took pennies on the distributor’s side to deliver the service. Prior to COVID-19, we started seeing some examples of this value-based model in healthcare (for example: Medtronic and their Value Based Healthcare).
So let’s look at the added values of virtual care from the patient lens:
- No transportation barriers or fees
- No parking fees
- No hospital acquired infections
- Reduction in need for patients and caregivers to miss work or school
- The ability for caregivers in different locations to participate in patient visits
Why would we, as a society, pay less for a virtual visit than an in-person visit when you look at all the added value created? Just like snail mail isn’t inherently more valuable than an email message because it’s more expensive to deliver, and the digital delivery of a movie provides more value than the cost to Amazon to deliver it—convenience shouldn’t mean low-value or free.
So, what is the fair price of virtual care? Virtual care should be reimbursed at (at least) the same level as in-person care because it should be reimbursed based on the VALUE provided, not the COST of care. Not only during COVID-19, but permanently.
Now, back to Trolls World Tour…