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» Is Telemedicine the Missing Piece in Your Health Plan? Probably Not How You Think…

April 19, 2022

Digital Health, Employee Benefits, Health Equity, Healthcare Innovation, Healthcare Spending, Self-Funding, Telehealth

We’re frequently thinking about how we can put together more affordable and accessible healthcare for employers since what we can offer off-the-shelf can be very inadequate. One area of opportunity in my opinion is born out of how employers and brokers look at telehealth with a narrow perspective.

Telemedicine has lingered on the sideline for the last few years and really took off over the last two years. While some of that utilization has cooled off, it’s clear that telemedicine is here to stay.

Becker’s Hospital Review aggregated a few studies for some key insights on telemedicine use in 2021 and to inform us moving forward in 2022 and beyond.

At a high level, I think more groups should be putting their telehealth option front and center within their health plan, rather than running it alongside the plan as an accessory. Employees are open to virtual first healthcare and the financials of the arrangement make a ton of sense.

Let’s break this down.

Typical Telehealth Arrangement

While companies have traditionally tacked telemedicine onto their existing health plans as an additional offering, there is often little integration with their overall healthcare strategy. It’s one thing to offer a few health plans from a major carrier and then throw out an 800 number for your telehealth vendor – it’s another thing for employers to make telehealth a central part of their employee’s healthcare experience.

Telehealth had been kind of pigeonholed as a niche benefit and merely sat alongside plans for most of its history. But as employees demanded more telehealth services and both patients and providers got more comfortable with virtual visits, we’ve seen new opportunities crop up for how to use it.

43 percent of adults want to continue to use telehealth services moving forward – American Psychiatric Association

Telehealth has real staying power for a few reasons, one of which is how it pairs nicely with the fact that employee populations are becoming much more dispersed across the country.

Let’s get aligned on what we want employees and employers to get from their health plans and then see how telemedicine might facilitate those goals.

Rethinking Telehealth’s Place in Health Plans

Employees want affordable and accessible healthcare. If their health insurance costs hundreds or thousands of dollars a month and they have trouble seeing providers, they’re going to be seriously frustrated and see little value in their plans. And healthcare is becoming increasingly unaffordable for most Americans

Meanwhile, employers want to offer cost-effective benefits that help recruit and retain employees. Many SMB employers today are realizing that if they don’t fix their benefits, they will fail to grow and will be gone in 5 to 10 years.

So – we need affordable and accessible health plans which SMB employers can use to recruit and retain employees. How does telehealth fit in?

I think we sometimes ask too much out of the core health plan – it needs to cover services and procedures like inpatient and outpatient surgeries and also cover visits with primary care physicians, specialists, and mental and behavioral health.

We’re getting the whole suite of services with little ability to customize or tailor benefits when we select a group health policy. It’s a take-it-or-leave-it approach where the health plan has to do everything under the sun.

That’s a lot!

Given how much employees appreciate the convenience, lower barrier to interaction, and ability to replace their PCP with telehealth, why don’t we put telehealth in the middle of a health plan?

What if telehealth became the tip of the spear for a health plan? Work with a PCP virtually, get prescriptions refilled virtually, even have specialist visits virtually.

Healthcare Billing is Still Gouging People – Telehealth May Solve This

I was thinking about this today while reading this thread on Twitter about a health economist frustrated with his bill after a visit to get his insulin prescription renewed.

Here’s the summary: he’s a Type 1 diabetic and has to see an endocrinologist in order to get his insulin prescription. After the visit, he gets a $300 bill for the 10-minute visit, broken out like this:

  • $10 for a glucose check: as a diabetic, he has a CGM and glucometer, yet is required to use their own equipment
  • $40 for a test of his liver function: this is only indicated for those with T2 diabetes and risk factors like obesity, not for those with type-1 and especially not for those under 30 with no risk factors
  • Upcoding as a level IV visit as a complex patient: this requires 30+ minutes with a MD, while he was just getting a prescription renewed.
  • $75 for the MD to read his CGM data, outside of the office visit charge. Data which he brought to help the MD do their job.
  • Then he has to pay $150 a month for his insulin.

This is insane. This is wasteful spending for both the consumer and employers and frankly, it’s what is driving healthcare towards being a $6.8T industry by 2030 with trillions of dollars of waste. Trillions!

An alternative is for an employer to offer a robust primary care and urgent care virtual health option that stands outside the health insurance itself. Instead, the group pays a PEPM (per employee per month) fee for employees and dependents to access the service. Sometimes, all services are covered with the PEPM charge. In other cases, the service may charge for some services.

The top vendors in this space are seeing themselves as full healthcare solutions, rather than a call center with doctors moonlighting while off from their local hospital. The reason we see these robust solutions make sense is that they can create an integrated care model that’s been proven to improve outcomes and lower the total cost of care. They’re just doing this virtually, rather than through a multi-billion-dollar brick-and-mortar health system.

So service and care delivery are improved with telehealth if we center it within a health plan. The financials also make a ton of sense.

Something we educate self-funded employers on is how to think about how costs get allocated – when an employee goes to the doctor, you’re paying some part of that cost. So if the doctor’s office is going to upcharge for a visit, you and your employee will pay the increased costs. But telehealth utilization doesn’t come through as claims to the payer, it is absorbed by the telehealth vendor.

So a big opportunity here is to shift employee utilization away from doctor’s offices with their up charging and facility fees and towards telehealth visits when appropriate. Given that many telehealth services now offer multi-specialty services, you can see a urologist, an endocrinologist, and more virtually.

I’ve been thinking a lot lately about how we can better use telehealth vendors since employees are more comfortable with them, want to continue having digital interactions with their healthcare professionals, and how they impact overall plan spending.

My perspective on this will continue to evolve but I hope this helped you think bigger and more creatively about how we use virtual health. As I’ve explained above, I think telehealth still has a lot of promise that is being unfulfilled. It’s up to us as consultants and employers as payers to explore solutions and seek out innovation.

Let’s talk more about telehealth within health plans and how you can make more use of it! 

Posted by in Digital Health, Employee Benefits, Health Equity, Healthcare Innovation, Healthcare Spending, Self-Funding, Telehealth