Digital-health company Zipnosis Inc. has closed on a $3 million financing round.
View the full article here.
Digital-health company Zipnosis Inc. has closed on a $3 million financing round.
View the full article here.
In our recent Benchmark Survey Report, we examined some of the trends that are shaping how healthcare organizations are deploying virtual care solutions. We examined the opportunities that exist for new players to get into the game, as well as how those that are already playing can expand their offerings. We also dove into some of the challenges that are being felt throughout the industry – whether in the day-to-day management of currently deployed virtual care platforms or the challenges that are expected by those that have yet to launch any telemedicine services. One thing was clear from our survey however, as virtual care continues to advance, the opportunities that exist in the industry greatly outweigh the challenges.
The truth is virtual care is nowhere near where it was 10 years ago, or even just last year for that matter. For example, our Benchmark Survey indicates that while the industry still leans heavily on video – one of the more traditional modes of care, video alone isn’t sufficient to meet the changing needs of today’s patients and providers. Because of this, many are turning to multi-modal care, with 61% of health systems reporting they offer more than one mode of care today. Which of these is gaining the most momentum? Believe it or not, it’s chat, with 44% of health systems saying they expect to include chat in their virtual care launch.
As technology changes, the clinical impact that these platforms provide also improves. Our study shows that virtual care solutions have the power to impact both clinical quality and efficiency. Quality reporting has always been difficult for healthcare providers, but 33% of survey respondents say their technology provider offers a reporting and analytics solution and 30% say their technology provider offers scheduled or ad hoc reporting. At the same time, virtual care is enabling providers to shorten patient visits by as much as 15 minutes – from the current patient visit average which is approximately 16 minutes to between one and five minutes, as reported in our survey. I don’t know about you but the ability to make five or ten times the health impact is an amazing opportunity I would not want to miss out on!
As much as virtual care has evolved, there are still hurdles that we need to get over before we can realize the adoption rates that we seek. What’s fascinating however is that the actual challenges providers face in their day-to-day operations are different from those that respondents anticipate they’ll encounter, which include integration, patient utilization, and claim management. Diving into each of these a bit deeper:
As patients, providers and as those with a stake in the virtual care industry, we should feel encouraged by the opportunities we have at our fingertips. Our survey shows that nearly 100% of health systems expect utilization to increase in the next 12 months – and that’s great news for everyone! So where should we focus our efforts and what can we expect? Undoubtedly, there are many applications for virtual care, but there’s a growing desire for it to be used for more complex conditions, with a big focus on behavioral health. However, to realize this in an effective way, we need increased collaboration between the technology companies that are creating the virtual care solutions and the health systems that are deploying them.
Regardless, the fact that we’re seeing such confidence from health systems when it comes to expanding their virtual care offerings in the coming year, signals to us that the industry is ripe for incredible growth. And it’s about time! Virtual care has long suffered from slow adoption rates, brought on by patients who were hesitant about leaving their trusted physicians and providers who were weary of expected financial and technological barriers. But virtual care doesn’t have to be scary and as our survey shows, many organizations have skewed ideas about the challenges that actually exist in the industry. To overcome this perception, we must educate patients and providers about the opportunities associated with virtual care, while continuing to focus on improving the patient experience. Though technology vendors may provide the platform, I believe, it’s with health systems, who are in a unique position to confidently vouch for the integrity of virtual care, and effectively market the service to truly increase adoption expand access to quality health care.
We called out our key business, technology, and clinical findings, discussed what they mean for virtual care in 2019, and hosted an open discussion about the research in our latest webinar: Top Virtual Care Trends for 2019.
Measuring return on investment – whether that comes from realized cost savings, direct revenue or long-term revenue – is important when building a business case for virtual care. If you want to get into that, we’ve got plenty of material for you (here, here and here).
A lot of time is spent discussing hard numbers with customers, so it’s easy to lose track of the softer side of ROI – what’s known as “blue sky” or “soft” value. While more difficult to measure and quantify, the softer side of ROI is just as important for organizational success. Soft value includes things like market perception, brand reputation, employee engagement and customer (or patient, in this case) satisfaction.
So, what does that have to do with virtual care? A lot. Virtual care is a key component in strategies that impact those less measurable, but still incredibly important, value drivers, including brand positioning, provider satisfaction, and patient satisfaction and experience.
When I’m speaking with customers, they often tell us that how their brand is perceived in the marketplace is of enormous importance to them. A well-publicized virtual care offering can help healthcare organizations position themselves as patient-friendly, convenience-focused, and technologically savvy. With a recent survey of patients finding that more than half of millennials would choose a provider who offers virtual care over one who does not, the brand impact of a virtual care solution can be the difference between patient acquisition and patient attrition.
In a world where provider burnout is front and center, finding ways to maximize provider satisfaction is critical. Providers remain skeptical about virtual care and adoption is slow—just 18% of physicians are interested in adding virtual visits to their practice, according to a recent Deloitte survey. However, patients are increasingly interested in virtual visits, with 57% indicating interest in online doctor visits, according to the same survey. Finding virtual tools to facilitate patient care that don’t add to providers’ workloads is critical. Virtual care, specifically store-and-forward or asynchronous modes of care, can lighten providers’ workloads while still enabling them to care for more patients. At Zipnosis, we’ve seen customers with provider satisfaction rates as high as 100% (top 3 box on a scale of 1-10).
“Zipnosis allows me to provide excellent treatment for patients with low-acuity health issues that can safely be managed without an in-person provider visit.”
-Virtual Care Provider
Spoiler Alert: In our soon-to-be-released On-Demand Virtual Care Survey Report, our team found that patient satisfaction was the most selected success metric across all respondents. Moreover, looking at the virtual care program goals, patient experience and satisfaction were the most selected reasons for launching a virtual care service. By launching virtual care health systems are demonstrating commitment to making healthcare work for their patients, instead of making patients work to get healthcare. This is vital in enhancing patients’ experience with the health system and their overall satisfaction.
One of the things we tell customers is that their virtual care service is only as good as the marketing behind it. Realizing the benefits of soft value – as with hard ROI – means spreading the word about virtual care, with the greatest success coming to health systems that combine seasonal marketing campaigns with providers recommending the service to their patients in-clinic.
After all, it’s impossible for patients to experience the convenience and satisfaction of a virtual encounter if they don’t know it’s available. Your health system’s brand won’t be known as an innovative leader in care delivery if the marketplace isn’t aware of the innovative services on offer. And, your physicians, NPs and PAs won’t find satisfaction with a platform that their patients aren’t using.
Soft value is a real, if less tangible, benefit of launching virtual care. Health systems that want to build their brand, enhance patient experience, and support provide satisfaction would be wise to consider adding virtual care or leveraging their existing service to meet their goals.
The other day, I saw the Advisory Board released new research indicating that healthcare executives’ primary priority is cost containment, even over revenue growth. This focus shouldn’t surprise anyone remotely familiar with U.S. healthcare. Increasingly, health systems are being asked to do more with less – more patients, less staff; more innovation, less budget.
Working closely with our customers, I see first-hand the budgetary constraints and financial scrutiny that are an everyday part of operations. That’s why our team has worked hard to provide health systems with a clear understanding of the financial implications of an on-demand virtual care service, starting with revenue.
The Advisory Board’s study didn’t say healthcare executives were uninterested in revenue, just that often takes a back seat to cost containment. When it comes to effectively managing the bottom line, a two-pronged approach addressing both revenue and cost containment is vital.
As mission-driven organizations, non-profit health systems need to think about revenue. Grants and donations can only cover so much of a health system’s operating budget. In order to effectively provide services for their communities, health systems need to have additional sources of revenue.
A quick Google search yields numerous articles, seminars, webinars and other resources for health systems looking to maximize payer contracts. With the growing trend toward value-based care, effective contracting is critical to healthcare organizations bringing in revenue. Many of our customers use their virtual care services to support and enhance local payer contracts.
Traditionally, virtual care has been viewed as a patient satisfier (and sometimes market requirement) first and revenue generator second. The trouble is that revenue is seen primarily as visit fees, which often can’t cover the cost of care delivery much less software licensing. In reality, virtual care’s ability to generate revenue and return on investment for health systems lies in its utility as a patient acquisition channel. I won’t go into the nuts and bolts today, because it’s been done extensively in previous blog posts (here and here), as well as in case studies (here and here).
While revenue is important, health system executives are right to make cost containment a priority. Last year, expense growth outpaced revenue growth by 1.2%. And, just as health systems can’t achieve their missions without revenue, they can’t effectively operate in a deficit.
I really view cost containment and revenue growth as two sides of the same coin. And, while Zipnosis has been vocally focused on revenue, we have also been focused on the flip side. So, how does virtual care support health systems’ cost control initiatives? Two ways:
Health systems are also big employers, and employee compensation is one of the biggest expenses they face. To help control compensation costs, health systems are often self-insured. This creates a somewhat ironic situation where healthcare costs are actually a major health system expense.
Virtual care offers health systems a low-cost access point for convenient care delivery. When focused on risk-based populations like self-insured employees, this can translate to a major cost savings. A recent study by Humana found video visit costs paid out at approximately ⅓ the cost of in-person care while producing comparable follow-up rates and lower incidence of antibiotic prescriptions.
Looking at data from across the country, we calculate the mean cost of in-person care at $320 per visit (note: we’ve seen this as high as $500-$600). Conversely, our customers see the cost of delivering care via the virtual care platform at approximately $5. That’s an average per-visit savings of $315. On an individual visit level that may not look like much, but imagine the savings possible across an entire self-insured population. Even with activation between 5% and 10%, significant cost savings is possible – enough to cover software costs and free up budget to support important programs.
I alluded to this somewhat in the previous section. Virtual care, in particular asynchronous modalities, can produce significant clinical efficiencies. On average, providers spend 15 minutes per in-person visit and are saddled with the administrative overhead of documentation later in their day, often after hours. With Zipnosis’s asynchronous modality, the visit time is a fraction of an in-person visit and there is no documentation.
That efficiency is part of why virtual care can be an effective low-cost access point, but it also can help drive significant cost savings, since health system providers are able to grow their patient panels while avoiding the costs of adding staff, outsourcing, or the health system adding brick-and-mortar locations.
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.
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.
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.
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.
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.
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.
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.
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.
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:
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.
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.
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.
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.
As 2016 comes to a close, health systems—like most businesses and non-profit organizations—are deep into planning their growth strategy for the new year. Faced with rising consumerism in patient populations, increasing competition from traditional and non-traditional healthcare companies, and the continued transition to value-based reimbursement, leading health systems are looking to virtual care as a means of supporting organizational growth strategies.
Any way you slice it, adding a virtual care service line is a strategic business decision. Your virtual care strategy should reflect your health system’s big-picture growth strategy. But how, precisely, do the two tie together?
Every health system is different, with unique cultures, competitive environments and goals. However, many health systems face similar challenges and opportunities. When it comes to health system strategic growth planning, virtual care can help make the most of strengths and capitalize on opportunities while shoring up weaknesses and mitigating external threats.
With a virtual care platform in place, health systems can:
Launching a virtual care service line can help health systems:
Virtual care can help health systems work within internal constraints by:
Offering virtual care supports health systems through:
For more information on how virtual care can support organizational growth strategies, check out our free Best Practices Guide to Virtual Care – your handbook for successfully launching, operationalizing and growing a virtual care service.