Checking in on telemedicine adoption

November 16, 2017 Matthew Arnold

by Matthew Arnold, Principal Analyst

Telemedicine was supposed to change the practice of medicine in the U.S. How’s it coming?

Well, in policy terms, ever so slowly, as my DRG colleague Chris Silva notes in a new post. Despite a lot of lip service at the federal level (it was a topic in the last presidential election and enjoys a bipartisan fan base among national lawmakers), it’s a different story at the state level.

“Standing in the path of widespread telemedicine adoption is a patchwork of state laws that dictate how services delivered via telemedicine are reimbursed,” Chris writes. “States with full or robust telemedicine parity have regulations in place that require coverage and reimbursement be comparable to in-person services.”

Those states are surprisingly diverse, as you can see in this heat map our market access crew drew up -- ranging from rural states like Maine to heavily urbanized states like California to those that, like Virginia and Colorado, feature both big cities and wide open spaces. But they’re not yet a majority of states, despite some heartening progress in recent years, notably in notorious telemedicine holdout Texas.

The legislative foot-dragging on telemedicine seems a little surprising in light of substantial interest (and not insubstantial use) from physicians and healthcare consumers alike. Consider that:

  • Per Manhattan Research 2017 data, 1 in 4 U.S. adults (24%) had used a virtual consultation with a healthcare professional in the past 12 months – up from 20% in 2016 -- and interest was high across a number of use cases, from renewing a prescription (42% interested in using virtual consults for that purpose) to urgent care consults (42%) to second opinions (39%).
  • Meanwhile, 11% of physicians reported having conducted a virtual consult in 2017, with another 37% interested in doing so, according to our physician research. Among the top clinical decisions made as a result of these visits were medication adjustments, new prescriptions and switches. Top conditions include cystic fibrosis, atopic dermatitis, psoriatic arthritis and type 1 diabetes.

Ultimately, what’s driving early adoption is our achingly gradual shift away from a volume-focused fee-for-service system toward one in which payers and providers are rewarded for holding down costs while improving patient care. Large health systems and retail pharmacy giants are piecing together scalable systems for remote patient consults and tinkering with pilot efforts at remotely monitoring their patients (Amazon has taken note), and a plethora of tech startups and established telehealth vendors is iterating furiously to that end. For ACO participants, in particular, keeping patients in the loop and engaged in their care is essential to meeting benchmarks, and telemedicine holds great promise to help keep patients on therapy and in network.

For our pharma clients, the rise of telemedicine poses challenges – how to market at the point of care when the point of care shifts from a bricks-and-mortar doctor’s office to a mobile app? It also opens up opportunities to boost pharma’s standing as a partner in care to physicians – for example, by providing supporting materials, such as disease or treatment education, in easily sharable digital formats for physicians conducting virtual consults to give to their patients.

We’ve been heartened by these hearty early adoption numbers, and to see bold experimentation on the provider side. Some states may yet have a way to go, but many hospitals, IDNs and insurers aren’t standing around waiting for them to catch up.     

Clients, for more on this topic, take a look at our recent reports on patient and physician adoption of virtual consults and connected care.

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