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The Importance of “Soft” Value in Virtual Care ROI

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.

Virtual Care and Soft Value

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.

Brand Position

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.

Provider Satisfaction

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

Patient Satisfaction and Experience

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.

Maximizing Value from Virtual Care

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 Flip Side of ROI: Virtual Care and Cost Containment

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.

Why Revenue Still Matters

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.

Virtual Care’s Revenue Impact

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).

Cost Containment with Virtual Care

Cost containment is the flip side of the ROI coin

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:

Expense Reduction for Risk-Based Populations

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 possiTake the 2018 On-Demand Virtual Care Benchmark Surveyble – enough to cover software costs and free up budget to support important programs.

Enhancing Clinical Efficiency

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.

How to Grow Market Share with Virtual Care

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?Grabbing a piece of the market share pie

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.

Follow the Data to the Real Virtual Care ROI

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

Carrot Health CEO, Kurt Waltenbaugh

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.

The Digital Healthcare Revenue Question: Are You Blockbuster or Netflix?

When people ask me my Big Hairy Audacious Goal (BHAG) for Zipnosis, I reply: “To make the transactional cost of healthcare $0.00.” The looks I get range from quizzical to quizzical and concerned. After all, people are used to the current payment model and don’t see how Zipnosis will be able to stay in business without transactional revenue. Of course, this isn’t going to happen overnight – but the healthcare of the future is going to be paid for differently than it is today.

Remember, for a minute, Blockbuster – the prime example of a company on the wrong side of the payment and technology equation. In the Blockbuster era, renting a movie was transactional. You went to the video store, chose your movies, and paid at the counter. Until there was Netflix. Even before the advent of streaming, Netflix erased the transaction from renting movies. By selling movie rentals on a monthly subscription model, they broke the transactional payment mold and helped seal Blockbuster’s fate. The same is occurring, albeit more slowly, in healthcare.

For me, this is the most important change in the industry today – not the technology we’re developing, but the ability to help shift the pricing and reimbursement discussion away from fee-for-service and closer to value-based care delivery. And that’s really the difference between the current state (telemedicine) and the future state (virtual care) – the shift from transactions to value. This shows up in two key ways: technology and payment structure.

Transactions vs. Value: Technology

The healthcare industry has been testing out uses for Telemedicine Patient and Clinician on Tablettelemedicine for ages because it is familiar. Telemedicine feels close to our current health system/experience: I sit in front of a computer or on a phone and talk to a healthcare provider instead of in a clinic. The only difference is my location. Telemedicine technology, like video queues, call centers, and nurse line systems, have been architected to support this 1-to-1, transactional experience.

But the analog technology telemedicine brings can only scale so far. Just like video stores could only serve so many people, telemedicine has an upper utilization limit. If as an industry and society, we are truly committed to increasing access to care, telemedicine technology becomes a wall at which the number of visits will exceed the infrastructure’s ability to manage them.

The future is more on the Netflix model, where technology and workflow enable significantly higher volume than previously imagined. Another company that successfully harnesses technology to facilitate an unbelievable number of transactions is Amazon. Instead of building a massive call center to meet the needs of their shoppers, Amazon invested in a technology platform that can and does handle far more transactions than humanly possible. There literally are not enough people on the planet to process the transactions Amazon processes.

Similar to both Amazon and Netflix, for healthcare to move beyond transactions, it must adopt new technology platforms – like virtual care. Virtual care is designed to handle a stream of data from many devices and sources. If we want to even contemplate continuous monitoring or predictive care models, we must not just transform the back-end “big data” warehouses, but the last mile of care delivery so its actually available to patients and clinicians. To put a fine point on it, analog telemedicine technology cannot meet this need but digital virtual care platforms do.

Transactions vs. Value: Payment

The transition from fee-for-service to value-based-care is happening in very quantified ways using bundled payments. This is akin to a shift from the Blockbuster model of renting a video – if you want 10 videos you pay $5/video or $50 – to Netflix, where you’re paying a set fee and can consume as much content as you’d like. Netflix can do this because their transactional cost is effectively $0 for you to view the content – even back in the DVD subscription days.

This is where the technology and the payment intersect. You cannot have a scalable value-based care payment system using transactional telemedicine technology. Conversely, transactional fee models are not fit for most virtual care platforms; it’s like asking Netflix to charge you each time you watch The Unbreakable Kimmy Schmidt. They can’t, and why would you?

The Future of Healthcare Revenue

Which brings me back to my BHAG for Zipnosis: driving a $0.00 transactional cost for healthcare. It’s terrifying for a Blockbuster-type payment model, but manna from heaven in a value-based world. It also creates a juicy chicken and egg problem. Do the technology platforms need to be in place before the economics? Or vice versa?

Both value-based care and virtual care technology are here and growing, but I think consumer choice will be what creates the tipping point in the industry. Our research shows that most patients don’t want video visits, and we know that transactional, video-based solutions aren’t the standard of convenience in any other industry. It’s simply not the way the rest of the digital economy works.

The good news is that health systems who have a line of sight into value-based care and are bold enough to install virtual care platforms will be the Netflixes and Amazons of healthcare’s digital age.

Telemedicine Transactions Virtual Care Value
Cost: Pay per visit – high transactional costs Cost: $0.00 transactional cost – pay for value
Back End: Human processing Back End: Platform (technology) processing
Reimbursement Model: Fee-for-service payment Reimbursement Model: Value-based care models
Volume Impact: Value is in single-purpose use Volume Impact: Scalable to meet demand

Financial Sustainability: How to Add Revenue to Your Health System with a Virtual Care Service

Recently, KPMG released a survey that found the number one barrier to health systems launching virtual care is lack of financial sustainability. Simply put, health systems aren’t seeing how virtual care produces returns. And in an environment where budgets are tight and expenditures are closely monitored, justifying the investment in virtual care technology can be challenging.

There’s just one problem with this barrier—it’s not real. The perception that virtual care doesn’t produce a sustainable financial return is rooted in the old “telemedicine” mode of thinking. In reality, health systems are seeing the financial benefits of offering a virtual care service today. This isn’t just a pipe dream – it’s backed by data.

Finding Financial Sustainability

I’ve had virtual care financial returns on the brain lately, trying to figure out how health systems are missing the ROI virtual care produces – and I think I’ve hit on an answer. The reason such a large misunderstanding around the true value of virtual care persists within the healthcare community is the focus on transactional revenue and outsourced telemedicine networks. I touched on this a recent blog post. Measuring returns by looking exclusively at transactions is an outdated way of viewing virtual care’s impact. It’s consistent with the fee-for-service mentality most health systems are rapidly leaving behind – not with modern, value-based reimbursement and digital care delivery.

Unlike traditional telemedicine, the financial return from virtual care goes beyond the individual transaction, appearing as downstream revenue impacts. This is evident in areas like diminished patient leakage, reduced cost of care delivery, and most importantly, patient acquisition.

The Real Virtual Care Value

Recent research from healthcare analytics company Carrot Health demonstrates exactly how virtual care is increasing the revenues for one Zipnosis health system client. Carrot Health followed a cohort of 974 virtual care users who had not received in-person care in the 24 months prior to their virtual encounter – matching the health system’s definition of a new patient.

In a new white paper, Carrot Health revealed that this large, integrated health system saw 25% of new virtual care users convert to health system patients by using additional, in-person services within 12 months of their online encounter. With an average annualized per-patient revenue of close to $3,000, these conversions translated to more than $700,000 in additional revenue over the study period.

In a recent article I wrote for Becker’s Hospital Review, I noted that this is just the tip of the iceberg. Applied over a longer period, or for a larger population, the revenues increase exponentially. For example, a population of 2,000 new virtual care users at the same conversion rate would produce revenues of $1.5 million. How’s that for financial sustainability?

And, the Market Says…

Have you wondered about the venture money funneled into virtual care and telemedicine software companies over the past few years? The data suggesting patient preference for online care, while interesting and valuable, isn’t enough to sway investors. It’s the ability to see the potential financial impacts virtual care can have on health systems that gets venture firms excited.

When asked about the reasons for investing in Zipnosis, Matt Hermann of Ascension Ventures noted, “In today’s environment, compelling ROI data like Carrot Health has compiled about Zipnosis’ virtual care offering will help health systems parse through the innovation noise and have confidence in making critical business decisions. We think every health system should be deploying multi-modal virtual care solutions like Zipnosis for both short term and long term success.”

And long-term success is really the name of the game. Virtual care is transitioning from being an interesting but unimportant feature to a vital care delivery channel. Health systems are using virtual care to find financial sustainability by adding patients and revenue today. And as this transition builds steam, the returns health systems will see are only going to grow.

Still Testing with Telemedicine? Virtual Care Offers Viability

A few months ago, my beloved car, Brynhyld (Bryn for short; I name all my cars), started to show signs of needing more significant repairs: New clutch, new tires, new brakes – about 50% of the value of the car. But I LOVED Bryn. She had been with me through some amazing times in my life. It’s not all the time I’m grateful for my dad’s brainwashing me into liking cars, but this was one. I had already test-driven a dozen cars—just for fun. As a car nerd, I knew exactly what it would take to replace Bryn – pricing, options, and financing terms. So, on a snowy December night, I said goodbye to my beloved Bryn and brought a new car, Petra, into my life.

Most people don’t spend an hour each day reading car blogs, so buying a car can be a stressful experience. The same is true in telemedicine. It nearly impossible to understand what “models” exist, what the right prices are, which vendors are reliable, what ROI to expect, whether patients will use it, etc. So, we do a lot of test-drives with telemedicine.

Telemedicine is Testing

Testing features; testing care delivery models; testing value propositions, patient preference, regulations, and reimbursement. The industry has been using telemedicine to test-drive the next generation of digital care delivery tools for 70 years. This testing has been vital. In healthcare, it takes those 70 years to get to a point where we are ready for a more mature, durable set of tools – ready for substantive change. But now, we’re ready.

Virtual Care is Viable

The most important thing about virtual care is that it’s more than just technology. Virtual care is a movement – a shift in how healthcare organizations and consumers view care delivery.

Virtual care incorporates the data gleaned from all that telemedicine testing to create a dynamic and personalized healthcare delivery experience – not a “one-size-fits-all” telemedicine corral to video or phone.

Virtual care is more amorphous—and durable—by its nature. The excitement virtual care offers isn’t improved patient access (that’s table stakes) – it’s all the ways technology can improve care delivery for patients and health systems. Like linking Smart on FHIR apps for seamless navigation between systems and data sources.

Virtual Care incorporates an endless and ever evolving set of devices that can help providers more accurately and rapidly diagnose and treat their patients – and help patients receive treatment in a way that better fits their lives.

Virtual care is not anchored to a single department or moveable cart – it’s on iPads, in the pockets of nurses, on the screens of your smart TV.

Telemedicine regulations dictate a specific mode (phone or video) that limits patient and provider choice. Virtual care regulation is mode-agnostic and upholds the standard of care as the basis for regulation.

The Time for Testing is Past

It’s been incredible sitting at the tip of the spear in healthcare transformation the past decade. When I started Zipnosis, people told me no one would ever get a diagnosis without going into the clinic. Today, we’re part of a rapidly growing industry.

It’s time to stop testing with telemedicine. Telemedicine is the analog past.  Virtual care is the digital future of healthcare; a future dominated by data and devices that permeate the fabric (literally) of our society.

So, when the brakes on your telemedicine cart start to fail, when the telemedicine engine seizes up at scale, and when the promises of a real ROI lose traction, consider upgrading to virtual care. It’ll be a much better ride.

Telemedicine = Testing

Virtual Care = Viable

  • Hardware: Specialized, expensive, additive
  • Hardware: Agnostic, in hands of consumers, existing
  • Regulations: Mode-specific, special standards of care
  • Regulations: Mode agnostic, standard of care
  • Payment: Right price per visit x utilization
  • Payment: Inclusion in value-based care models, $0.00 transactional costs
  • Utilization: 1 or 2 options – limited clinical use cases and patient/provider preference matching
  • Utilization: Highly personalized options for patients/providers – unlimited clinical use cases over time

Where’s the Return? How to Find Virtual Care ROI for Health Systems

For early adopters of telemedicine, the excitement of new care delivery technology (e.g., video conferences) was enough to build a business case. These days, online care has gained acceptance by both patients and healthcare organizations – it’s no longer just early adopters being lured by something shiny and new. Health systems are being tasked with meeting patient demand for online care and justifying this investment by showing its impact on their organization.

Traditionally, determining the return on telemedicine investment hasn’t always been clear. As a newer way to deliver care, it’s taken some time to develop and validate ROI models and some telemedicine companies continue to struggle with proving ROI to health systems.

Virtual care, which includes traditional telemedicine tools in addition to its suite of transformative digital health solutions offers an alternative. Leading health systems are building out their digital healthcare programs with virtual care and seeing the organizational and financial benefits.

Beyond the Bottom Line

As with other strategic initiatives, virtual care’s return is not just financial. Patient perception in the marketplace and brand positioning are both impacted by launching a virtual care service line. Health systems that offer virtual care and communicate that offering effectively to the marketplace are more likely to be seen as a leader in patient access and technology. With 46% of consumers in a recent survey stating they would choose a health system that offers virtual care over one that doesn’t, this can have a big impact on position in the marketplace and your bottom line.

Virtual care and telemedicine can also play a big role in supporting long-term organizational strategy and building a foundation for the care delivery of tomorrow. The contribution of virtual care to achieving, say, improved patient access or greater operational efficiency goes well beyond any financial returns. Additionally, launching virtual care in support of long-term, strategic objectives can mean that the true financial impact takes time to materialize – think lifetime value.

How to Find Your Virtual Care ROI

Virtual care ROI has many lenses. The best return on investment approach is the one that fits your goals and organizational strategy. Effective goal setting, identifying the right KPIs to measure performance, and developing a reporting process and cadence are vital steps to understanding and measuring the success of your virtual care program.

Metrics like total visits, number of new patients, clinical guideline adherence, clinician work time and patient satisfaction combine to tell the story of a virtual care service. Is it helping bring new patients to the health system? Is it providing high quality medical care? Is it driving operational efficiencies? Do patients like it? These are some of the true measures of virtual care success.

Finding Financial ROI

Of course, there are the numbers…

Calculating the financial return on investment is more than just subtracting costs from revenues. If you want to see the impact virtual care could have on your bottom line, check out our interactive ROI calculators:

ROI through preventing patient leakage

ROI through cost shift in a value-based environment

And, download our latest eBook, Measuring Virtual Care Success: Your Complete Guide to ROI, for more information on quantifying the impact virtual care could have on your health system.

2016 Telemedicine Predictions

Another banner year in virtual care/telemedicine.  Last year I ventured out with some predictions [read here]…you be the judge on my accuracy, but I think I could potentially play baseball for some minor league amateur softball team with my average.  If it was slow pitch.  Maybe.

So time to sharpen my dull pencil again and commit to some good laughs at 2017’s New Year’s party!

1. The Whole Virtual Care Kitchen includes Async:

Consumers and physicians have spoken clearly that video is not the preferred method for virtual interaction for simple conditions; this despite some massive legislative machinations from industry insiders to orient telemedicine legislation around video-based encounters.  As I have preached for years, this video fad is just that – it will pass as the economic value of asynchronous visits becomes mainstream.  Look for 2016 to be the year when asynchronous visits account for more than 25% of all virtual encounters across the country.

 2. #value is Telemedicine v2:

As the market matures around telemedicine and virtual care, so will the ability to calculate a true ROI around virtual care.  With so many companies grappling for consumers, providers and payers, having just another video solution with a clinical network won’t be enough.  Vendors who can’t demonstrate an ROI will be left in the dust.  The handful that can will find receptive buyers.  The hashtag for ATA this year won’t be #features but #value.

3. Prove it! Series A Investment will Wane:

The VC community will pull back for a bit on higher risk Series A investment in virtual care/telemedicine companies as they evaluate how the market begins to settle.  Start-ups that are in a proof of concept/beta phase will need to demonstrate true market adoption or transformative product differentiation to attract growth capital.

4. The Yellow Brick Road to Profitability:

Some telemedicine companies are touting adoption rates 3-5x actual utilization.  This will start to backfire on them as more transparency around adoption becomes available to the market.  Healthcare providers and payers will hone in (per #2) on facts/data in 2016 and orient investment/partnerships accordingly.  The halcyon days of hope will become a distant memory.  To this end, there is no wizard of Oz for driving consumer adoption – but there are viable business models that will weather this transition.  The companies investing in basic economics and product/market fit will survive or be acquired at a premium.

There you go.  Perhaps a little more vague than last year, but I sense the market truly maturing in 2016, especially on the health system side.  Of course, I’ll look forward to being surprised along the way.  Agree/disagree?  Love to hear your thoughts.  Here’s to a dynamic 2016!

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

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Watch the Webinar

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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.)