I am a firm believer in the power of data – not surprising considering my role as CEO of a data analytics company. In my experience, successful business decisions don’t happen by accident; they’re a direct result of careful evaluation of a large amount of information.
Recently, my company, Carrot Health, had the opportunity to work with a large health system to explore their virtual care service. Historically, the impact virtual care service lines and technology have on a health system hasn’t been very clear and there’s been a lot of debate about virtual care’s return and long-term financial sustainability. So, when a client came to us wanting help in evaluating their virtual care service, we were intrigued by the opportunity. What we found was surprising.
Virtual Care ROI – The Data Has Spoken
Beyond insight into who was using the service, we stumbled onto data that showed the behaviors of patients following a virtual visit – and then, the downstream impact on the bottom line. But first, let me share our methodology.
Looking at all virtual care users over a 12-month period, we narrowed down our pool to those who met the following criteria:
- Men and women over 18 years old
- Had not received care from the health system within the 24 months prior to their virtual encounter
- Could be matched to a patient record in the health system’s EMR
Ultimately, we ended with a cohort 974 virtual care users. Of that cohort, 24.8 percent, or 242 virtual care users, had converted to in-person care within 12 months of their virtual encounter. By tracking the services these patients received through EMR data, we found that on average, these new patients had 3 in-person visits and generated $2,972 in revenue. That translates to more than $708,000 in incremental annualized revenue.
Virtual Care Revenue Potential
At first glance, $708,000 may not seem like a significant number. But looking purely at the conversion percentage and average revenue per patient, this impact potential for virtual care becomes much greater.
Remember, we took a very conservative approach in the creation of our data set. Let’s say that we’re looking at 10,000 virtual care users, 30% of whom are not current health system patients. At the 24.8 percent conversion rate and $2,927 average annualized revenue, that translates to approximately $2.2 million in incremental revenue.
Driving Conversions with Data
So, how does a health system get 3,000 new patients to use their virtual care service so they can see those kinds of revenue returns? The answer is, of course, data. Understanding consumer behavior using social, behavioral, and clinical variables enables health systems using virtual care to acquire patients to more effectively target marketing efforts at demographic segments most likely to use virtual care.
Health systems today are at a crossroads: Today’s data-rich environment gives health systems an unprecedented opportunity to make informed decisions that produce successful results. The organizations that take advantage of the information and technologies available are those that will be best positioned to thrive now and in the future.
About the Author
Kurt Waltenbaugh, Founder and CEO, Carrot Health
Kurt has built successful analytic solutions, products, and companies in the healthcare, retail, manufacturing, education/credentialing, and fundraising industries. His previous companies were sold to Oracle and Pearson Education. Most recently, Kurt was responsible for product strategy at Optum, Inc. (United Health), building data analytic businesses for the provider, payer, and employer markets.