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Convenience, cost savings drive hospitals' interest in telehealth

Once driven mainly by employers and insurers, more hospitals and medical systems, including Community Health Systems Inc., are allowing patients with conditions such as the flu to see a doctor from their home instead of having to visit an overcrowded emergency room — a practice known as telehealth.

The percentage of hospitals that connect patients and doctors via video or plan to do so in the following year rose to 78% from 72% between 2014 and 2016, according to an American Hospital Association, or AHA, survey in April.

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Only 0.3% of patients receiving outpatient care under the government's Medicare health insurance program made telehealth visits in 2016, according to a March Medicare Payment Advisory Commission report . Even so, telehealth visits were up 79% compared to 2014, reaching 300,000, the report found.

That growth has meant more business for telehealth companies, such as Koninklijke Philips NV of the Netherlands, InTouch Technologies Inc. and MDLIVE Inc., with American Well Corp. estimating that its hospital and healthcare business has grown by about 150% in the last few years.

InTouch Technologies, doing business as InTouch Health, which works with medical systems such as Providence Health Services in Oregon, has seen remote visits increase 34%, to 380,000, since the beginning of 2017, according to the telehealth company's CEO, Joseph DeVivo. Telestroke calls, in which stroke specialists assess patients in the critical moments after an episode, have risen 35% in the last year "and [have] become almost the standard of care," DeVivo said in an interview.

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Initially, telehealth was adopted mainly by insurers and employers as a benefit for workers, Sylvia Romm, vice president of medical affairs for telehealth company American Well, said at the 2018 Health Datapalooza event in Washington on April 27.

But in recent years, "the highest adoption has been coming from providers. And this is the tip of the iceberg," she said at the annual conference organized by AcademyHealth, a policy and research group.

In interviews, hospital administrators said their interest in the technology is mainly driven by a desire to improve patient care.

Under the CareConnect program started by the nonprofit Nemours Children's Health System in Delaware, Florida, Georgia, New Jersey and Pennsylvania in October 2015, parents download a free app to their computer, mobile phone or tablet.

On average, they have had to wait in a virtual waiting room for only 2 minutes and 11 seconds for a Nemours pediatrician to appear on the screen, according to a March 19 study published in Telemedicine and e-Health by Shayan Vyas, Nemours Telehealth's medical director.

If telehealth is deemed appropriate, the doctor observes the child's eyes, nose and throat. If anything needs to be examined hands-on, the doctor talks the parent through it.

The exam, which on average takes 12 minutes and 10 seconds, was used most often on weekends. Nearly two-thirds of those surveyed for the study said they would have otherwise gone to the emergency room, where they would have spent an average of two hours.

The cost, which can be as much as $59 for those without insurance and less for those who are covered, was also a fraction of the average $909 cost for emergency room visits in Florida, the study found.

Growing competition

Meanwhile, hospitals face growing competition to serve patients. New options that make care more accessible are "definitely on their minds," said Michael Farrell, senior vice president and general manager of MDLive's hospitals and health systems business.

Walgreens Boots Alliance Inc., which offers exams starting at $89 in about 400 of its stores, has been turning over more of its operations to healthcare providers such as New York-Presbyterian. The retail giant and the healthcare system in December 2017 announced a collaboration, in which shoppers will be able to reach Weill Cornell Medicine emergency medicine physicians via video conference kiosks at Duane Reade drugstores in New York.

"Care is all over the place. You go to a Walmart and there's a clinic. You go to a CVS or a Walgreens, and there's a clinic," Farrell said.

"You can go online to book a flight, deposit a check online," Nemours CareConnect's operational vice president, Carey Officer, said in an interview. "We're meeting patients and parents where they are."

Health systems have been offering MDLIVE's $59-a-visit service to their own employees as well as marketing it to those identified as uninsured or underinsured, to divert visits for less severe conditions, such as a sinus infection or seasonal flu, from stressful emergency rooms and clinics, Farrell said.

Hospitals are also seeing an opportunity to save money at a time when the AHA estimates that Medicaid and Medicare, which cover low-income and older Americans, respectively, pay only 87 cents out of every dollar that it costs to treat people under the programs. That led to a $68.8 billion shortfall in 2016, the group said.

"In the U.S., what we're seeing is health systems working harder with less," said Karsten Russell-Wood, head of global marketing patient care analytics for Philips. "Reimbursement has not increased [to] where hospital margins are as high as in past years."

Hospitals can save the cost of transporting a patient from a small rural hospital to a main urban hospital staffed by specialists if they can be treated closer to home with telehealth.

Despite Nemours' experience, the Medicare Payment Advisory Commission questioned whether telehealth really saves money and recommended that Congress be careful in increasing Medicare reimbursements for the technology.

The commission in its March report to Congress noted that some telehealth services could actually increase healthcare spending because more people would seek medical help for minor illnesses such as a bad cold.

Some health systems disagree.

"That's not what we've seen," Nemours' Officer said.

In addition, the federal government and private insurers are moving away from the traditional fee-for-service approach, in which providers are paid based on how many procedures they perform, to one that rewards providers for improving patients' health.

Under the Affordable Care Act, for example, hospitals face a penalty in their Medicare payments if a large number of patients must be readmitted once discharged from the hospital.

But telehealth helps avoid readmissions by making it easier for patients to follow up with questions. Increasingly, hospitals are using remote monitoring, such as taking regular readings on weight and blood pressure, to keep track of their patients' health.

"Fee-for-service is changing very rapidly," Officer said. "As we prepare for the future, we're taking steps now to develop the right models of care."