Part 1 of 2
2023 year of innovation
By Michael Gorton
The growth of the virtual care industry in the last few years has been remarkable, and the outlook for continued expansion remains highly positive. In this two-part series, I’ll highlight key trends that are catalyzing further progress as digital health technologies and data-driven solutions broaden the depth and scope of available care. Brokers in the know will be better able to advise their group clients about ways to package benefits to take advantage of these advancements.
Virtual Primary Care (VPC) is a leading solution for providing healthcare
VPC is a holistic “whole person” approach. As we improve aspects of telemedicine delivery, innovations will emerge in urgent care delivery. 2023 promises to be the year of innovation as virtual care solutions providers leverage technology to enhance the member experience and improve the quality of life for patients wherever they are living and whenever they need care. These advancements can help employers ensure the best health for their workers. They include more efficient care coordination and condition management, behavioral health, genomics, in-home diagnostics — such as labs and devices data — and pharmacy plans or prescription benefit plans.
I project that these services can help achieve better health for people of all ages and advance a much needed transition from a reactive, disease-focused healthcare delivery model to proactive, preventive care.
1. Increased investment in technology to support digital health and virtual care
Innovations in digital health are expected to grow into a $56 billion global opportunity by 2025. While innovators face challenges in the adoption of digital health solutions, financial communities recognize the value of investing in the sector and funding the development of connected devices and technology that will spur digital transformation.
Analysts point to several macrotrends driving this overall curve:
a) Accelerated consumer adoption of all-things-digital that was fueled in-part by the pandemic and consumer demand for anytime, anywhere healthcare engagement healthcare.
- b) Renewed focus on self-care and do-it-yourself wellbeing and disease prevention activities that are readily accessible via virtual care and affordable to implement.
- c) Consumers appreciation for telemedicine access – especially those populations that were traditionally underserved
- d) Payers welcome employee engagement and increased reliance upon data-driven decision-making that incorporates symptom tracking and monitoring. These drive down hospital admissions/readmissions and lower the total cost of care.
- e) In the blurred line between business strategy and tech strategy, the success of this industry will be boosted by purchasing smart technology and being able to measure sustained interest by employees.
As trusted advisors, brokers can help their group clients understand these trends and metrics, and translate them into ways to ensure better health, with higher quality and lower costs.
Despite the market downturn and economic pressures, the majority of investors expect digital health dollars in 2023 to be roughly on par with 2020, bringing in an estimated $15 billion to $25 billion.
Experts predict that venture capitalists plan to make roughly the same number of health tech investments this year as compared to 2021, according to a new survey of 50 digital health venture capital investors conducted by GSR Ventures.
For context, digital health investment in 2021 was an amazing $29.1 billion, according to Rock Health, and that was a huge jump from $15 billion in 2020. Venture capital firms invested $8.3 billion in digital health startups in 2019 and many seem relatively optimistic about the sector in 2023 with bright spots for innovation.
Well-informed brokers can guide their clients
Most analysts still believe the overall ecosystem is quite healthy and investment levels will be comparable to the past few years at $15 billion to $25 billion. This is further emphasized with ongoing labor shortages and clinician burnout reaching sky-high levels. A hot sector for investors for brokers to be aware of in the coming year will be the use of virtual care technology to address workforce challenges and administrative burdens.
2. Increased insurance coverage for virtual care — especially Behavioral Telehealth
Brokers can bring to the table the broadened coverage for telehealth (telemedicine) services offered by commercial health plans in response to COVID-19. Forty-two states and the District of Columbia require private insurance providers to reimburse telemedicine. Most insurance providers cover at least some form of telehealth service.
As virtual care is more accessible and more affordable than traveling to a brick-and-mortar clinician office, telehealth insurance coverage will pay for doctor visits that are done remotely. This may via a video call or through other remote services.
Broker Tip: The big five carriers — Blue Cross Blue Shield, United Healthcare, Cigna, Aetna and Humana — all offer some form of coverage for telehealth services with options that vary. Additionally, most preferred provider organization (PPO) plans allow telehealth visits.
The overall outlook for adoption of telehealth is best captured in America’s Health Insurance Plans (AHIP) report. AHIP reports that health insurance providers are breaking down barriers for telehealth because it helps to lower patient costs, increases the availability of care providers, provides patient with more choices of doctors and clinicians and improves quality of care.
According to a J.D. Power white paper on telehealth adoption and usage, “If providers can reduce emergency department visits by 1% by increasing telehealth adoption, the average emergency department savings would be $101,920,000 annually”.
During the pandemic, telehealth for primary, chronic and acute care management emerged as an alternative to in-person visits. Make sure your clients take advantage of this trend.
Now, telemedicine is being widely viewed as complementary to in-person visits. According to Business Group on Health survey data,
- 55% of employers plan to expand their virtual health offerings in 2023.
- In fact, nearly three-quarters (74%) of the 135 large employers surveyed by the organization responded that virtual care will have a major impact on care delivery in the future.
- Remarkably, 84% believe it is necessary to integrate virtual and in-person services to ensure success. People working at most large employers will be able to use telehealth, virtual mental health and virtual resiliency offerings with virtual primary care showing the most promise.
- About 32% of those surveyed said they will offer virtual primary care (VPC) services in 2023, and
- 69% said they may offer such services in 2025.
This shows the high value that employers place on VPC: a one-stop resource which integrates all their vendor solutions in one central location to relieve “vendor fatigue” with a “complete care” solution. VPC provides a seamless, single point patient experience, delivering health services that are digitally optimized as a benefit of a member’s health plan — whenever care is needed and wherever the patient is located — regardless of time or distance.
Virtual mental health is popular with employees
A notable trend is rapid payer adoption of Virtual Behavioral Health (VBH). Healthcare stakeholders are continuing to flock to telehealth for behavioral health services. An analysis of data conducted by Fair Health from January 2020 to March 2022 shows that mental health conditions were the most common telehealth diagnoses at the national level.
- In addition, this data shows that in the first quarter of 2019, 32.4 percent of all telehealth visits were related to behavioral healthcare.
- That figure jumped to 59.9 percent by Q1 2022.
- This data, along with the ongoing mental health crisis in America as noted by the Kaiser Family Foundation, signifies the importance of providing virtual care options for behavioral healthcare.
These findings reflect the position of employer-sponsored health plans. Despite concerns about rising healthcare costs, data suggest that the use of telehealth for behavioral health conditions resonates with both patients and providers and may be a vital component to continue to include in benefit packages offered by employers to support the well-being of their employees. Expanded telehealth benefits and reduced cost sharing for telehealth visits among self-insured plans and other commercial insurers in some states incentivized the uptake of telehealth in the early months of the pandemic.
Employers can be part of the solution
The continued expansion of access to behavioral health services via telehealth is an important consideration for employers. It can help address the increase in the reported prevalence of behavioral health conditions during the pandemic, continuing disruptions to the workforce due to resignations and work-from-home policies, and evidence of increased burnout overall.
3. Regulatory changes favorably position telehealth industry
To overcome obstacles to telehealth adoption and use, including licensure, reimbursement, and eligible services, and in response to the coronavirus outbreak, the U.S. Department of Health and Human Services (HHS) sweepingly approved the use of telehealth services as part of the Coronavirus Preparedness and Response Supplemental Appropriations Act. As part of this newly granted permission, most Medicare payment requirements were waived and recipients were able to access remote care, regardless of where they live. During the pandemic, telehealth services were also charged at the same rate of in-person medical services, or at parity. The move to accelerate the use of telehealth services also included other exemptions, including some HIPAA exceptions for providers when Facetime or Skype was used by doctors to communicate with patients.
Brokers can expect technology providers to step up in 2023 as existing state and federal policies are likely to more fully embrace telehealth. As new policies are given priority in addressing evolving concerns related to reimbursement policies and licensing laws, expect to see payment models that reward value in the remote delivery of services, rather than paying providers at capped rates (regardless of the service) as a way to encourage providers to utilize telehealth as a service.
The outlook to further streamlining of the credentialing process with standard requirements is clearly ahead. This will also allow physicians to apply for credentials at multiple hospitals at once, which leads into the next barrier to adoption.
Expanded internet access with reach rural communities
Finally, rural broadband gaps will increasingly be remediated with successful implementation of telehealth among rural communities that requires the expansion of broadband internet access. Almost all forms of telehealth initiatives require an internet connection. The lack of broadband access disproportionately affects rural areas — although urban and suburban areas may also have subscribers who experience challenges getting online. Improved access to high-speed broadband networks will enable a large portion of rural populations to participate in virtual medical care.
4. Two-Year Extension of Telehealth Flexibilities
The enactment of new legislation will ensure that telehealth flexibilities remain in place for at least the next two years. The goal is to give regulators more time to determine which flexibilities should be made permanent and there is every expectation this will happen. Accordingly, telehealth waivers will remain in place through Dec. 31, 2024.
Flexibilities will include
- eliminating geographic restrictions on originating sites for telehealth services,
- enabling Medicare beneficiaries to receive services from any location, and
- allowing federally qualified health centers and rural health centers to continue providing telehealth services.
This extension addresses today’s economic and employee benefits environment where Virtual Primary Care (VPC) is rapidly gaining the interest and adoption among health plans, insurance companies and self-funded companies.
5. Virtual Primary Care Will Dominate Digital Health Environment
VPC accommodates not only fully insured and self-insured employer groups, but also uninsured and underinsured workers. This modern healthcare delivery experience is tailored specifically to complex medical realities:
- the primary care needs of an exploding population coupled with a shortage of primary care physicians;
- a demand for more convenient access to care; and ever-increasing measures to reduce costs.
These challenges are powerfully addressed by VPC, a beneficial evolution of telemedicine that is a true digital health solution. It presents opportunities to enhance condition and care management, reduce exacerbations resulting in lowered cost of care, close gaps in coverage and remove barriers to care.
Michael Gorton, CEO of Recuro Health is a quintessential entrepreneur and company builder. As CEO of Recuro Health he leads a team which includes several leaders from Teladoc, where he served as the founding CEO and pioneered an industry-changing health care model that created a new efficiency paradigm in healthcare.