Today we explore the past and future of Telehealth. Do we agree on the opportunities and obstacles and are we ready to tackle them?
Today in health, it tele-health the path forward. My name is bill Russell. I'm a former CIO for a 16 hospital system and creator of this week health. Instead of channels, dedicated to keeping health it staff current and engaged. We want to thank our show sponsors for investing in developing the next generation of health leaders, Gordian dynamics, Quill health towel, site nuance, Canaan, medical, and current health. Check them out at this week. health.com/today.
All right. So we're doing a deep dive on a single article from the Harvard business view. The tele-health era is just beginning. Is the name of the article. Worth a read. And I'm just breaking it down over a couple of days. It was written by Robert Pearl. Who was a former CEO of Kaiser Permanente medical group.
And brian whaling is the executive director of telehealth services at Intermountain healthcare.
So in the first episode, We set it up. Here's our thesis having analyzed health outcomes, data. From the independent national committee for quality assurance, health plan member satisfaction surveys from JD power and internal data from our own organization, we are confident that full implementation of five opportunities would improve.
Clinical quality nationwide by 20% increased access to care by 20% and reduce healthcare spending. By 20%, 15 to 20%. All right. So that's their premise. Let me tell you about the opportunities that they laid out. And we talked about yesterday, opportunity, number one, reduce expensive and unnecessary trips to the ER.
The number two. Reverse America's chronic disease crisis. Opportunity number three, address disparities in healthcare opportunity. Number four, make specialty care. Faster and more efficient and opportunity. Number five, provide access to the best doctors. All right. So that is what that essentially is a summary of the first two episodes that we talked about. This.
The next is okay. This is great. We have this opportunity. We can do these things and improve access outcomes. And, , And equity across the board and costs across sport. So the question becomes all right, how do we make it happen? And they go into this at the end and it's, it's no small feat, by the way. I mean, they're, they're touching on a lot of stuff at the end of this article.
And, you know, so let's just go, go into it and then we'll talk about it. So how to spur adoption? Number one is integration, essentially the death of the independent doctor everybody's associated with a health system. And they are integrated with their electronic medical record. They're integrated with their tools.
They're integrated in a health system. There's a lot of reasons for that. Not the least of which is going to be a recommendation later on that everybody needs to be salaried and as few people as possible need to be on the fee for service model. Right. So. , integration everybody's, , operating in the best interest of health, not a financial gain.
And then the next is capitation. Most providers in the United States work for in a fee for service basis. They are paid for each test procedure and treatment. They provide. The model incentivizes them to offer services, whether or not the patient needs them. Logically doctors, whose income rides on the quality.
Our quantity of services, they provide well resist, any model that reduces, ER, visits, specialty referrals, hospital admissions. Or surgeries, right? What people get paid for. They do. And that is what this is saying. And they say the alternative to fee for services is prepaid value based. Approach known as capitation, widely supported by policy experts.
It pays a risk adjusted, fixed annual amount per patient for all services provided. Although fee for service still accounts for most us healthcare expenditures. Capitation is gaining steam, for example, 42% of Medicare beneficiaries in 2021. We're enrolled in Medicare advantage programs, which uses capitated reimbursement.
Up from just 13% in 2005 that's significant game, 13% to 42%. How does this work well, more than 90% of Intermountain members belong to one of the organizations, select health capitated insurance plans, all 95% of Kaiser. Permanente's 12.5 million members are in a capitated plan. That's how this works. It works when that is in place. It works for, , Intermountain. It works for Kaiser or for Geisinger.
, it works for a CVS Aetna. It works for, , United Optum. When you take on the risk of the population and you're getting that first dollar, you are now incented to decrease the cost. And improve the outcome. Right. And so if multiple visits. It's just more efficient. It's more efficient to do a tele visit than it is to do an insight on, on in-person visit. So if it's more efficient to do that,
And you're going to get better outcomes because you have more swings at the plate. You're more connected with how their health is actually going in. You can. , you can do an intervention at the right time, then it makes sense. That is the number one thing. Period. End of discussion.
You have to be. Getting that first dollar service. If you're not getting that first dollar. And being incentive to keep the population well. If you're getting paid an incentive based on fee for service, it's not going to work. It's not going to work because you're trading. , higher margin, higher revenue opportunities for lower margin, lower revenue opportunities. And so they're not going to do it, but if you're getting that first dollar, if you're getting that insurance dollar.
And you're also delivering on the care. It can be a highly profitable. , endeavor. And this is why you see United healthcare buying so many, , physician practices through their Optum medical group. Right. So they understand this, that the more people they sign up for these plans and they can control not only that first dollar spend that the telehealth visit spend, but also the primary care spend and then direct the care after that. , it's just a, a business model that works and it works extremely well.
So again, that's going to be the number one thing. So when, if your health system is slow to adopt telehealth, my guess is I'm going to look at it and I'm not going to see this. I'm not going to see a significant population on capitated insurance plans. It's just not going to be there. , but if it is there, then you got to drive tele-health.
In every aspect of your organization, because it's where your efficiencies are going to be gained. And it's where better outcomes are going to be gained and access and equity are going to be gained. As we talked about the opportunities yesterday. So they go on the ideal model for the future of us medicine. One.
To replace or at least significantly augment today's fragmented fee for service approach is tele driven health. And integrated prepaid tech enabled system in which teams of primary care and especially physician work together to deliver exceptional care. All the systems physicians have the same financial incentives to keep people healthy. They aim to provide convenient, expanded access via telemedicine.
They're rewarded on the basis of quality of care delivered to a defined patient population and the cost savings is achieved. All right, this is what Amazon cares about. This is what Amazon is trying to do. Right. So they are they're hiring physician groups. It is tech enabled. They're going to try to get some aspect of a dollar. This is why I made the case. Five years ago, seven years ago. It feels like it was a long time ago.
That's about seven years ago, I made the case that I believe eventually Amazon was going to be in the insurance game, in the healthcare insurance game. Right because Amazon is big. They have to grow. Healthcare is what, 15 to 20% of our economy in order to be a company of those sizes, you have to touch that 20% at some.
, at some point and they are in the pharmacy business. And, , even the device business, but at the end of the day, they want to grab more of it. This is their play to do that. And we will see how it plays out. I mean, there's a lot of things that. We'll make or break that, but that's, this is the direction they're going. The most logical candidates to drive the creation of such a system are employers.
This is the, this is where they lose me. The most logical candidates to drive. The creation of such a system are employers who currently provide health insurance coverage to 155 million Americans. Nearly half of the country's population. All right. So the first thing I would say is the employers. Don't provide army. They provide health insurance coverage, but this is essentially saying they should create a health system.
And they're not in that business. I would strongly recommend against doing that. , if you're a large enough business. Essentially this model that they're talking about, you can do through someone like transparent. So it doesn't make sense. The smaller people, you're going to have to find some way.
To get aggregated. And if you can aggregate enough, you can create the same kind of model that transparent is, which essentially is a. And Glen gets upset when I say care navigation, but essentially. It is a, , it is a way of. Delivering care to your employees at a much more efficient manner. Much better outcomes, much more transparency into the overall process and they get paid to reduce your costs. They actually get paid over and above it.
I don't want to do a transparent commercial, but essentially that's what you're going to have to do. I don't think employers are going to build this out. I think they're going to enable it. They're going to enable companies like transparent and copycats to that who are going to come in and come alongside them and, , create a model where.
, health is incented. That's what we're looking for here. They talk about that fact. , they think it's going to happen through purchasing groups, purchaser business group on health. I could leave the way P B G H represents a Goliath like Walmart, Costco, Microsoft, and Intel, and already formed division focused on reducing the cost of healthcare.
, there's also a consortium like the north star network out of Rochester, New York. We changed the lower costs for all employers. So this is, this is that, that aspect I was talking about. Somebody is going to serve the large employers. Somebody needs to aggregate and serve the small employers. And that's what we're talking about here.
I'm going to close up the article with this. Let's see. , Kaiser and Intermountain's experience suggests that 30 to 50,000 enrollees are needed to support the requisite hiring. , primary care and specialty physicians, few businesses have that many employees. And again, given geography. Or the financial ability to make the necessary changes themselves, but 15 to 20 companies together could achieve this critical mass.
Again, I'm not sure this is where I feel like they jumped the shark. And they lost me a little bit, but I will go back to some of the things they did say, which I, I agree with significantly. I think it's about capitation. I think it's about. , getting that first dollar. I also think a fee for service has weird incentives.
And always has had weird incentives. So you need to go to a different model. I think that people who are delivering care. , cannot be incentivized in any way. Other than health. And so for that matter, that's why I think there is. A salaried position for the physicians, which is the best way to make sure that everybody's working towards that same thing. And I think it's going to be tech enabled.
I think at the end of the day, it's not only tech enabled from the video visit, which is the obvious aspect of it. But it's an integrated delivery across the board and the ability to pull in specialists when you need to, or dish the call to a specialist when you need to. So, , if your system is right in the middle of this right now.
And you're trying to figure out how to take it to the next step. I would look around. I would look around and say, do we have the right business environment until you have the right business environment? This will sputter it'll get used. It'll get used and you can put it into different areas. To improve the patient experience, but mostly it will be driven by improving the clinician experience.
Until you move from a fee for service model in some way, shape or form, you are not going to accelerate your tele-health program. So that's how I'm seeing it today.
So as the CIO in those situations, What I would be looking for is the places where I could implement it. It would not be a system-wide let's push this. Why aren't we moving forward? Kind of thing. You can understand the business realities. If you're in a fee for service model.
We're not going to trade a set of revenue. That is more profitable than another set of revenue that is lower profitability, which is tele-health. So that's not going to happen, but if you have the business situation in place in play, Then you should be pushing this as quickly as you possibly can, because the more efficiencies you drive.
The better outcomes you drive, the more healthy you drive and the cafeteria environment, the better you are doing for your community. All right. that's all for today.
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