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Walk Before You Run: Driving Success with a Scalable Virtual Healthcare Business Model

When it’s time to pull the trigger on a new technology investment, particularly one with the potential to revolutionize care delivery in your health system, it’s tempting to shoot for the moon and include all the shiny bells and whistles. Like many large-scale improvements where change management is present, that is not always the best strategy. When developing a virtual healthcare business model, health system leaders need to balance the desire to employ the latest growth strategies with a systematic approach. A phased approach facilitates effective change management and the necessary checkpoints to support success.

Virtual Care Scalable Business Model

 

Change Starts from Within

Health systems frequently start their foray into virtual care by offering the service  internally to their employees. This strategy helps build acceptance and understanding of virtual care. It also helps get employees excited and become more knowledgeable about the service. Once your employees experience virtual care as a patient, they feel more comfortable recommending it to patients later on.

In addition to gaining buy-in from key employees, launching internally provides time to monitor the service and make any needed adjustments to the workflow. This means that when you are ready to expand to a broader population, your service is dialed in and working on all cylinders – for both patients and providers.

Grow With Confidence

After the initial phase, it’s time to grow your virtual care service by expanding your patient population. This may include current patients and/or the broader marketplace, depending on your acquisition and retention strategies as well as your regulatory environment.

This phase is the time to begin scaling your service beyond current patient population targets. Use your organizational strategy and virtual care goals to create a comprehensive growth roadmap.

Your plan may include adding employer and health plan contracts, integrating virtual care technology with internal systems, adding access points, or expanding the number and types of conditions that can be treated.

Whatever your scaling and integration plan includes, a methodical, step-by-step approach will serve you best. This supports analyzing the impact of each new addition and gives you the flexibility to make adjustments and optimize staffing to meet organizational goals.

Hit Your Stride

Being part of the virtual care revolution can be exciting – after all, you’re a pioneer on the forefront of innovative healthcare delivery. And, once you have a fully realized, mature virtual care service, innovation is the next step.

Virtual care is a rapidly evolving industry, and the sky’s the limit to its potential impact to your health system. Leading virtual care technology companies are beginning to expand into serving varied needs along the care continuum. For example, support for longitudinal care, such as chronic care management and post-operative care.

The growth and advance of technology is enabling ever-deeper systems integration, helping to eliminate silos and support greater connectivity throughout health systems. And expanding interoperability of your virtual care software is another way to be on the leading edge of healthcare information technology.

Moreover, by collaborating with your virtual care partner to offer the next generation of online care as a pilot site, beta tester or innovation partner, you give your clinicians and patients a voice in the future of care delivery.

Move at Your Own Pace – This Is Not a Sprint

Steady doesn’t necessarily mean slow. Following a phased plan for your virtual healthcare business model enables you to move as fast as makes sense for your health system. Healthcare leaders gain three main benefits from this strategic approach:

Change management: A systematic approach to launching, growing and optimizing your virtual care service can minimize the challenges that come with implementing a new service line. Effective change management relies on this type of phased approach. Being methodical and gathering information and feedback at every step will help set the stage for virtual care success.
Budget management: Launching a new service line means up-front investment – whether you’re going for traditional telemedicine access points like phone and video, or pushing into new frontiers with virtual care. Starting small, with a clear roadmap for scaling means more effective budget management, including the ability to strategically time capital investments.

Risk reduction: Innovation in healthcare is always a bit of a risk, but by starting small and scaling your virtual care service, you are mitigating the risk that comes with investing in something new. Starting small reduces risk by lowering up-front investment. And, using a documented plan to grow your service enables careful monitoring, which limits the likelihood of making an investment that doesn’t pay off.  

Find out how one leading health system successfully employed a measured approach to launching their virtual care service. Get the case study.

The Future of Telemedicine Will Be Different Than You Think

Like jetpacks and flying cars, telemedicine has been part of our collective vision of the future for a long time. Has that future finally arrived?

I haven’t seen any cars flying by lately, but I did gaze heavenward in July when Teladoc achieved a dreamy billion dollar IPO. While that kind of market validation is reassuring for those of us working to transform healthcare delivery, I can’t help but wonder whether investors and the media are buying into a vision of the future that won’t quite match reality.

Why am I skeptical? Because when it comes to telemedicine – unlike flying cars and jetpacks – it’s not technology holding us back. The barriers are economic. Can telemedicine make it easier for patients to get treatment and also provide a sustainable economic benefit to providers?

Telemedicine’s Jobs-To-Be-Done

Telemedicine has been available since the early days of the space program. 60 years ago NASA could diagnose and treat astronauts on space flights via video consultation. Today, video is available on any smartphone or computer, people are starting to record their personal biometric data obsessively, and connectivity is ubiquitous, so it would seem that any remaining barriers to telemedicine have finally been eliminated. Then why are we not using video en masse for diagnosis and treatment?

The simple answer is that it’s still not convenient for patients or economical for providers.  Unfortunately, few of those heralding the next great advance in healthcare delivery take the time to really pencil out the ROI and the value add. We’re so infatuated with sexy video screens and the novelty of telemedicine, we gloss over the cold, hard facts.    

Where’s the Volume?

So let’s run the numbers.

The going price for a video consultation with a clinician runs about $40 to $50. From the consumer’s or payer’s perspective, this price is outstanding since emergency visits cost about $500 and a trip to urgent care runs about $250. Most of those visits are for minor ailments treatable by any primary care doctor or nurse practitioner. That’s why, if telemedicine was widely adopted, estimates of system-wide cost savings run as much as $25 billion.

Cost containment, however, does not a healthy market make. There’s a flip side to any exchange. Is it financially worthwhile for clinicians to perform primary care visits via video, and does the revenue model work for telemedicine businesses?

The short answer is no. Currently, most clinicians doing video visits handle about 100 to 500 a year, and the overall volume in the market is insufficient to keep clinicians working at their capacity, let alone earning the pay they would otherwise make through in-person consultations.

That reality is reflected in Teladoc’s IPO filing. A billion dollars in market capitalization notwithstanding, Teladoc’s expected revenues for the year are only around $74 million while costs are rising faster than revenue and the projected volume of customers will not make up the difference.

Although expectations around margins and profitability are generally different for emerging technology businesses, healthcare is in the throes of wrenching change to its business model. It’s unlikely that clinicians will embrace an approach that earns them even less money than they make now. It’s also hard to imagine outsourced telemedicine services like Teladoc, MDLive, American Well or Doctor-on-Demand driving growth that way, or investors continuing to back such ventures given the immense investments in marketing and infrastructure.

The Social Side of Telemedicine

Economics aside, there’s also an engagement factor to consider. Will consumers and clinicians find reasons to be drawn to telemedicine?

There’s no doubt that patients are more willing to engage with clinicians by video than they were a few years ago. Every busy parent I know likes the idea of avoiding the doctor for simple care. However, actually using video during the course of a normal hectic day is a barrier. Imagine trying to do a video call while juggling sick kids or sitting in your car. Now compare that to the ease with which you can order an Uber car or buy something on Amazon. In other industries, no thriving mobile service relies on video to conduct transactions.

And what about clinicians? Personally, I can’t imagine one 15 minute visit every four days or so providing enough activity to keep even an easy-going semi-retired healthcare professional content.

In my experience, physicians and nurse practitioners want to actively practice medicine and help patients. Their job satisfaction already wanes from struggling with crushing paperwork and cumbersome EMR data entry. Sitting in front of a row of video screens waiting for one or two visits a week would only exacerbate their dissatisfaction. Clinician satisfaction and engagement is key to any successful delivery model. Unhappy, under-paid clinicians are an anathema for change in healthcare.

The Search for a Better Answer

Instead of gazing heavenward, waiting for flying cars, let’s ground ourselves in solid economics and an understanding of what healthcare consumers and providers need to make telemedicine work.

In the next few blog posts, I want to show you how a new model for telemedicine, rooted in evidence-based care, is proving its ROI with health systems across the country. In the vision I’m going to lay out, patients get access to cost-effective, quality care in the right setting, providers are fully engaged within their workflow, and health systems get a boost to their bottom line and their market share. In the process, telemedicine starts to look a lot less like science fiction and more like another valuable convenience in our connected world.

Sources:

Resources

Webinar: Top Virtual Care Trends for 2019

ATA Webinar: Top Virtual Care Trends for 2019

We are proud to offer the Top Virtual Care Trends for 2019 Webinar, hosted in partnership with the American Telemedicine Association.

In this webinar, Zipnosis CEO and ATA Chair Jon Pearce identifies the key business, technology, and clinical findings from the On-Demand Virtual Care Benchmark Survey Report, discuss what they mean for virtual care in 2019, and host an open discussion about the research. Key callouts include:

  • Virtual care is growing fast: 96.4% of respondents plan to expand their virtual care program within the next 12 months
  • Health systems are recognizing patients as consumers: a great patient experience is the top priority for 64% of our respondents’ virtual care programs
  • Multiple modes of care is essential: 67% of respondents say they have plans to expand offered modes of care

gain-insights-healthcare-decision-makers-investing

Watch the Webinar

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eBook: Shopping the System – Consumers Find Value in Virtual Care

Shopping the System: Consumers Find Value in Virtual Care

The shift from passive customers to savvy healthcare consumers has been predicted for years, but traditional brick-and-mortar care providers have remained relatively immune. Not anymore. Shifts in the market and advances in technology, among other factors, have given patients the incentives, tools and options to make different decisions about how they receive care.

Qualities Consumers Value

  • Price
  • Convenience
  • Service
  • Quality

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eBook: Measuring Success in Virtual Care – Your Complete Guide to Return on Investment

Measuring Success in Virtual Care: Your Complete Guide to Return on Investment

How success is defined and measured will vary between health systems. Factors including organizational goals, local markets and regulatory environment will impact which metrics make sense to track and what targets health systems should aim for. This ebook is designed to help health systems identify key performance indicators for their virtual care service and develop a comprehensive program for measuring its success.

    (Don't worry–we hate spam, and won't send too many emails.)