Virtual care is a moving target, but there are concrete steps payors can take to position themselves for the future.
Virtual healthcare has hit the mainstream. Naturally, pandemic lockdowns accelerated this shift; according to McKinsey, 11% of US consumers had used telehealth (a subset of virtual healthcare) prior to Covid—and by 2021, that figure had leapt to 46%.
While that growth appears to have slowed with the easing of the pandemic, I believe virtual health will continue to grow inexorably over the long run. It has to—it benefits all players. For health systems, virtual health holds the promise of increased revenue and market share, judicious use of providers’ time, and enhanced consumer engagement. For health plans, it can reduce overall care costs. And for patients, it can mean easier access and increased convenience.
Just to nail down our definitions, virtual healthcare refers to the use of technology—including telephones, video, mobile apps, text messages and more—for the delivery of health services to patients.
One challenge for payors is that as of now, there is little agreement about how to pay for virtual healthcare. As the services become more commonplace, hospitals, health systems and physician practices must work collaboratively with health plans to determine a pricing framework for a broad range of services. In the US, the Centers for Medicare and Medicaid Services has set up some rules and released its Physician Pay Schedule, but policymakers and payors are still in the process of deciding whether and how much to pay for virtual care services in the future, leaving clinicians uncertain about whether they’ll be able to continue their programs.
Virtual care has astonishing potential as the first point of care; it can save time spent on transportation and decrease access-related issues. Switching from emergency department care to virtual urgent care could reduce the cost of a visit from thousands of dollars to only $50 as per health payer intelligence report.
Having said that, improved convenience also creates the potential for wasting resources, and that potential outcome is yet to be quantifiably measured. So far, it’s proven difficult to justify cost savings related to the virtual primary care benefit. I’ve taken part in many discussions around plan designs, member experience with virtual care, and the deeply integrated data and information flow across clinical and claims platforms. Add to this the fact that the very definition of virtual health is still crystalizing, and the bottom line is this: Despite its promise, virtual healthcare as it stands today is fraught with uncertainty.
So, healthcare payors find themselves in a tricky situation: Planning for, and investing resources in, a moving target. Here are steps I recommend to address both present and future:
Payors should evaluate market trends, customer preferences, and demand for virtual care services. They should then conduct a risk-based assessment of which treatments can be provided virtually and which require a physical care center.
Organizations must determine the scope of coverage for virtual care services. This includes specifying the types of virtual care consultations, such as video visits, telephonic consultations, and online messaging, that will be covered under the insurance plan.
Next, payors should define the criteria and guidelines for coverage. This may include factors such as the conditions or specialties eligible for virtual care, guidelines for when in-person visits are required, and the frequency and duration of virtual care consultations covered under the plan.
They must then ensure compliance with all relevant regulations and guidelines, such as HIPAA and state-specific telehealth regulations.
In this step, organizations should carefully draft a plan against every healthcare need, and analyze the services required for them individually. This will involve two steps.
Payors may arrive at a care management plan, which will include virtual health/home care. Based on this plan, they can tweak their percentages of virtuality/home care/hospital care.
Arrive at a service-wise breakout for each set-up to arrive at the cost of the plan.
With these steps complete, payors can determine the pricing structure and reimbursement rates for virtual care services. This involves negotiating reimbursement rates with virtual care providers and establishing fee schedules for different types of virtual care consultations.
Since members prefer to have a detailed price for easy comparison shopping, payors should devise a mechanism for ensuring transparency in pricing.
Healthcare organizations should develop educational materials and communication strategies to inform members about the availability and benefits of virtual care services. This includes explaining how to access virtual care, the process for scheduling appointments, and cost savings and convenience.
They can then establish processes for care coordination between virtual care providers and in-person providers to ensure continuity and quality of care.
It’s also crucial to monitor the use and effectiveness of virtual care services under the plan. Payors must analyze member feedback, provider performance, and outcomes to continuously evaluate and improve their offerings.
This barrage of change, despite its dizzying pace, is creating new opportunities to solve long-standing problems. Some of the new digital offers have been shown to deliver experiences that meet the expectations of today’s consumers (even young “digital natives”). Payors can also take advantage of new technologies to fully automate core processes, strengthen their partnerships with providers, and reposition themselves at the center of the healthcare landscape.
