Next-gen telehealth: What health system CFOs are saying

By Brian B. Sanderson
| 6/30/2020
Next-gen telehealth: What health system CFOs are saying
Telehealth and telemedicine volume spiked so dramatically at the start of the COVID-19 crisis1 that health system CFOs’ thought process about telehealth use blurred the lines between “This is our new strategy” and “This is for our survival.” The traction this alternative created has health system executives ruminating on how (or whether) to ride the telehealth wave into their near-term continuum of care approaches.
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These are among the most common operational considerations heard in the market:

  • It’s merely a stopgap. Some organizations have not yet solidified the physician cooperation, adoption, and compensation models to make a full, viable, near-term transition to telehealth. Issues with technology and patient communication have hindered some efforts, as has a leadership culture to move “back to normal.”

    Unfortunately, back to normal is not the current patient psyche. In one survey, only about 40% of patients said they are likely to reschedule their visits within the next three months. That number increases to about 80% who said they expect to reschedule in the next six months.2 But the economics of prolonged lower volumes might be untenable. More than likely, the health systems that wish to de-emphasize telehealth will need to more aggressively communicate (for example, doctors calling their patients) with their patient base regarding the safety of returning to clinical settings.

  • It’s the new low-acuity screening model. Whether a health system or large physician practice uses relative value units (RVUs), charges, or a capitation model, low-acuity patients that might not require care within a physician office or clinic might be best served with another model to access a clinician. “Virtual check-ins” and “e-visits” represent realistic (and precise coding) alternatives to face-to-face interactions, assuming all criteria for payment (for example, established patient) are met. The challenge here will be communicating how to access, schedule, and administer these visits, but once protocols have been established, initial findings indicate strong patient satisfaction.3

    The broader play here is “digital as a strategy.” The use of wearables and other technologies is improving the patient monitoring environment. Physicians, physician assistants, and other clinical staff who are able to gather appropriate diagnostic information might be able to not only diagnose a patient who is in the comfort of his or her home but also identify a change in health prior to the need for a more acute visit. Although heart monitors and related equipment already have been adopted successfully, the digital telehealth platform enables a broader capability to improve the patient experience.
  • It’s a “market share” play. Successfully executing a telehealth strategy blurs the lines of the traditional primary, secondary, and tertiary service area geographies. It also dramatically affects the retail “doc in a box” efforts, which are tied more to physical location. Now, similar to how internet access has no borders, telehealth access can expand outreach into geographies and communities that previously would have been competitor strongholds. Whereas some health systems have partnered with local pharmacies to create easy-to-access locations for patients, most health systems can create a simple-to-use telehealth model for the easiest access to appropriate care.

  • One year from now, more billboards likely will be communicating simple-to-use telehealth access versus the previous “X minutes wait time at our emergency room.” Beyond marketing, this also will create a need for additional health system infrastructure – dedicated staff, scheduling blocks, secure devices, recording and medical record updates, new referral patterns, updated managed care contracts, and more. This flips the marketing model in a manner consistent with what marketing author and entrepreneur Seth Godin says: “Don’t find customers for your products, find products for your customers.” Except in this case, it’s “Don’t bring patients to your offices, bring your offices to your patients.”

For CFOs considering a move toward increased telehealth services, here are three “Do this immediately” recommendations:

  • Perform a “cannibalization analysis.” Project the volume of patients that will move from office visits to telehealth visits, as well as the financial impact of decreased frequency of office visits.
  • Conduct an outpatient charge capture assessment. Determine what additional net revenue opportunities are missing currently that might pay for the telehealth infrastructure.
  • Update physician compensation models. Sticking with a model that does not tie physician behavior to organization goals is destined for failure.

1 Erin Brodwin and Casey Ross, “Surge in Patients Overwhelms Telehealth Services Amid Coronavirus Pandemic,” STAT, March 17, 2020, https://www.statnews.com/2020/03/17/telehealth-services-overwhelmed-amid-coronavirus-pandemic/
2 Jonathan Scott, Ania Labno, Brian Rappl, Josh Kellar, and Barry Rosenberg, “Restoring Patients’ Confidence in Elective Health Care,” Boston Consulting Group, May 27, 2020, https://www.bcg.com/publications/2020/elective-health-care-post-covid-19.aspx
3 The Rapid Transition to Telemedicine: Insights and Early Trends,” Press Ganey, May 19, 2020, https://www.pressganey.com/resources/white-papers/the-rapid-transition-to-telemedicine-insights-and-early-trends?s=White_Paper-PR

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Brian B. Sanderson
Managing Principal, Healthcare Services