Telehealth use falls nationally for third month in a row: Fair Health

Dive Brief:

  • Telehealth claim lines as a percentage of all medical claims dropped 13% in April, marking the third straight month of declines, according to new data from nonprofit Fair Health.
  • The dip was greater than the drop of 5.1% in March, but not as large as the decrease of almost 16% in February. However, overall utilization remains significantly higher than pre-COVID-19 levels.
  • The decline appears to be driven by a rebound in in-person services, researchers said. Mental health conditions bucked the trend, however, as the percentage of telehealth claim lines associated with mental conditions — the No. 1 telehealth diagnosis — continued to rise nationally and in every U.S. region.

Dive Insight:

The coronavirus spurred an unprecedented increase in telehealth utilization early last year. But early data from 2021 suggests demand is slowing as vaccinations ramp up and COVID-19 cases decrease across the U.S.

Fair Health has used its database of over 33 billion private claims records to analyze the monthly evolution of telehealth since May last year. Telehealth usage peaked among the privately insured population last April, before easing through September and re-accelerating starting in October, as the coronavirus found a renewed foothold in the U.S.

In January, virtual care claims made up 7% of all medical claim lines, but that fell to 5.9% in February, 5.6% in March and just 4.9% in April, suggesting a steady deceleration in telehealth demand.

The deceleration in April was seen in all U.S. regions, but was particularly pronounced in the South, Fair Health said, which saw a 12.2% decrease in virtual care claims.

The trend doesn’t bode well for the ballooning virtual care sector, which has enjoyed historic levels of funding during COVID-19. Just halfway through the year, 2021 has already blown past 2020’s  record for digital health funding, with a whopping $14.7 billion. This latest data suggests dampening utilization could throw cold water on the red-hot marketplace.

And policymakers are still mulling how many telehealth flexibilities should be allowed after the public health emergency expires, expected at the end of this year. Virtual care enjoys broad support on both sides of the aisle and the Biden administration’s top health policy regulators, including CMS administrator Chiquita Brooks-LaSure, have said they support permanently adopting virtual care coverage waivers, but returned restrictions on telehealth access could also stymie use.

Fair Health also found that nationally, mental health conditions increased from 57% from all telehealth claims in March to 59% in April. That month, psychotherapeutic/psychiatric codes jumped nationally as a percentage of telehealth procedure codes, while evaluation and management codes dropped, suggesting a continued need for virtual access to mental health services, which can be some of the rarest and most expensive medical services to find in one’s own geographic area.

Also in April, acute respiratory diseases and infections increased as a percentage of claim lines nationally, and in the Midwest and South, while general signs and symptoms joined the top five telehealth diagnoses in the West. Both trends suggest a return to non-COVID-19 respiratory conditions, like colds and bronchitis, and more ‘normal’ conditions like stomach viruses, researchers said.

ED volume remains persistently down, but at higher acuity

https://mailchi.mp/f42a034b349e/the-weekly-gist-may-28-2021?e=d1e747d2d8

As we shared recently, post-pandemic healthcare volume is not returning evenly. While outpatient volume is rebounding quickly, other settings remain sluggish, especially the emergency department. We partnered with healthcare data analytics company Stratasan to take a closer look at ED volume decline. As shown in the graphic above, nationally, ED visits were down 27 percent in 2020, compared to 2019. ED-only volume (cases that started and ended in the ED) took a large hit across last year, down nearly a third from 2019. We expect that a portion of this ED-only volume will never fully recover to pre-COVID levels, with patient demand permanently shifting to lower-acuity care settings, including virtual, and some patients avoiding care altogether for minor ailments as they learn to “live with” problems like back pain.
 
ED-to-observation volume saw the greatest decline in 2020, likely as a result both of patients avoiding the ED, and presenting in the ED sicker, meeting the criteria for inpatient admission. However, ED-to-inpatient volume, which fell only seven percent in 2020, has been returning. In the second half of 2020, the ED-to-inpatient admission rate was 20 to 30 percent higher than the pre-COVID baseline. Across all three categories of ED volume, pediatrics saw steeper declines compared to adult cases. While some further ED volume rebound is anticipated, health systems should expect that fewer, but sicker, patients will be the new normal for hospital emergency departments. 

Fewer low-acuity patients utilizing high-cost emergency care is good news from a public health perspective, but health systems must bolster other access channels like urgent care and telemedicine to ensure patients have convenient access for emergent care needs.

Walmart, Amazon continue to build healthcare presence

Walmart Health: A Deep Dive into the $WMT Corporate Strategy in Health Care  | by Nisarg Patel | Medium

Late last week, retail giant Walmart announced its plan to acquire national telemedicine provider MeMD, for an undisclosed sum. According to Dr. Cheryl Pegus, Walmart’s executive vice president for health, the acquisition “complements our brick-and-mortar Walmart Health locations”, allowing the company to “expand access and reach consumers where they are”.

MeMD, founded in 2010, provides primary care and mental health services to five million patients nationally. The acquisition extends Walmart’s health delivery capabilities beyond the handful of in-store and store-adjacent clinics it runs, and follows the launch of its own Medicare Advantage-focused broker business, and partnership with Medicare Advantage start-up Clover Health to offer a co-branded insurance product. 

Walmart has been climbing the healthcare learning curve for several years, building on its sizeable retail pharmacy business, and seems to have hit on a successful formula in its latest in-person clinic model, which includes primary care, behavioral health, vision, and dental services. The retailer plans to add 22 new clinic locations by the end of this year, and its new telemedicine offering will allow it to expand its virtual reach even further.

The MeMD acquisition also represents a new front in Walmart’s head-to-head competition with Amazon, which launched its own national telemedicine service earlier this year. That service, Amazon Care, is targeted at the employer market, and right on cue, Amazon announced its first customer sale last week—to Precor, a fitness equipment company. 

Both retail giants are slowly circling the $3.6T healthcare industry, targeting inefficiencies by deploying their expertise in convenience and consumer engagement. Incumbents beware.

Asking the wrong questions about telemedicine’s impact

https://mailchi.mp/da8db2c9bc41/the-weekly-gist-april-23-2021?e=d1e747d2d8

Telemedicine – Creating Positive Impact in Healthcare – iPatientCare

A new study out this week revived an old argument about whether telehealth visits spur more downstream care utilization compared to in-person visits, potentially raising the total cost of care. Researchers evaluated three years of claims data from Blue Cross Blue Shield of Michigan to compare patients treated for an acute upper respiratory infection via telemedicine versus an in-person visit, finding that patients who used telemedicine were almost twice as likely to have a related downstream visit (10.3 percent vs. 5.9 percent, respectively).

They concluded that these increased rates of follow-up likely negate any cost savings from replacing an in-person encounter with a less costly telemedicine visit. 

Our take: so what? The study failed to address the question of whether a telemedicine visit was easier to access, or more timely than an in-person visit. Further, it evaluated data from 2016-2019, so the results should be caveated as pertaining to the “pre-COVID era”, before last year’s explosion in virtual care. Moreover, it’s unsurprising that patients who have a telemedicine visit may need more follow-up care (or that providers who deliver care virtually may be more aggressive about suggesting follow-up if symptoms change).

This focus on increased downstream care as a prima facie failure also ignores the fact that telemedicine services likely tap into pent-up, unmet demand for access to careMore access is a good thing for patients—and policymakers should consider that limiting reimbursement for virtual access to primary care (which accounts for less than 6 percent of total health spending) is unlikely to deliver the system-wide reduction in healthcare spending we need.

Virtual care for mental health is here to stay

https://mailchi.mp/da8db2c9bc41/the-weekly-gist-april-23-2021?e=d1e747d2d8

The uncertainty and isolation of the pandemic has taken a heavy toll on mental health. Over a third of adults are currently experiencing anxiety or depressionmore than three times as many as early last year. And with access to behavioral health services already challenged before the pandemic, many patients have been turning to telemedicine for support.

Health insurer Cigna found that while use of virtual care for both non-behavioral and behavioral healthcare services peaked in spring 2020, consumers have continued to use telemedicine for mental health needs, while demand for other virtual services tapered off. As of December, about 70 percent of behavioral health claims were for care rendered virtually, compared to just 20 percent across all other services.
 
The recent surge in demand for virtual mental health services has spurred an influx of investment into digital solutions. A recent Rock Health analysis found investments in the space have more than tripled since 2015. The injection of funds extends to both “generalist” companies (focused on a wide range of virtual services, including behavioral health) and “specialist” companies (focused solely on virtual behavioral health solutions). 

Virtual behavioral health not only provides much needed access to care, but patients also prefer the privacy and ready access offered by telemedicine. Moving forward, telemedicine may become the preferred alternative for patients seeking support for mental health needs. 

Doctor on Demand, Grand Rounds merge to create multibillion-dollar digital health company

Dive Brief:

  • Virtual care company Doctor on Demand and clinical navigator Grand Rounds have announced plans to merge, creating a multibillion-dollar digital health firm.
  • The goal of combining the two venture-backed companies, which will continue to operate under their existing brands for the time being, is to integrate medical and behavioral healthcare with patient navigation and advocacy to try to better coordinate care in the fragmented U.S. medical system.
  • Financial terms of the deal, which is expected to close in the first half of this year, were not disclosed, but it is an all-stock deal with no capital from outside investors, company spokespeople told Healthcare Dive.

Dive Insight:

The digital health boom stemming from the coronavirus pandemic resulted in a flurry of high-profile deals last year, including the biggest U.S. digital health acquisition of all time: Teladoc Health’s $18.5 billion buy of chronic care management company Livongo. Such tie-ups in the virtual care space come as a slew of growing companies race to build out end-to-end offerings, making them more attractive to potential payer and employer clients and helping them snap up valuable market share.

Ten-year-old Grand Rounds peddles a clinical navigation platform and patient advocacy tools to businesses to help their workers navigate the complex and disjointed healthcare system, while nine-year-old Doctor on Demand is one of the major virtual care providers in the U.S.

Merging is meant to ameliorate the problem of uncoordinated care while accelerating telehealth utilization in previously niche areas like primary care, specialty care, behavioral health and chronic condition management, the two companies said in a Tuesday release.

Grand Rounds and Doctor on Demand first started discussing a potential deal in the early days of the coronavirus pandemic, as both companies saw surging demand for their offerings. COVID-19 completely overhauled how healthcare is delivered as consumers sought safe digital access to doctors, resulting in massive tailwinds for digital health companies and unprecedented investor interest in the sector.

Equity funding in digital health globally hit an all-time high of $26.5 billion in 2020, according to CB Insights, with mental and women’s health services seeing particularly fast growth in investor interest.

Both companies reported strong funding rounds in the middle of last year, catapulting Grand Rounds and Doctor on Demand to enterprise valuations of $1.34 billion and $821 million respectively, according to private equity marketplace SharesPost. Doctor on Demand says its current valuation is $875 million.

The combined entity will operate in an increasingly competitive space against such market giants as Teladoc, which currently sits at a market cap of $31.3 billion, and Amwell, which went public in September last year and has a market cap of $5.1 billion.

​Grand Rounds CEO Owen Tripp will serve as CEO of the combined business, while Doctor on Demand’s current CEO Hill Ferguson will continue to lead the Doctor on Demand business as the two companies integrate and will join the combined company’s board.

Amazon Care goes nationwide with telehealth, courts outside employers

Dive Brief:

  • Amazon is expanding its virtual care pilot program, Amazon Care, to employees and outside companies nationwide beginning this summer in a major evolution of its telehealth initiative, as the COVID-19 pandemic continues to drive unprecedented demand for virtual care.
  • Amazon will also offer its on-demand primary care service to other Washington state-based companies and plans to expand its in-person service to Washington, D.C., Baltimore and other cities in the following months, the e-commercebehemoth announced Wednesday.
  • Amazon Care launched 18 months ago as a pilot program in Washington state offering free telehealth consults and in-home visits for a fee for its employees and their families.

Dive Insight:

The nationwide expansion, and the potential of the e-retailer’s heft and technological know-how leveraged in the medical delivery space, threatens existing telehealth providers and retail giants like CVS Health and Walgreens that maintain their own networks of community health clinics.

Amazon Care has two main components: urgent and primary care telehealth with a nurse or doctor via an app, and in-person care, along with prescription delivery, to the home. The Seattle-based company says it will offer the gamut from preventative care like annual vaccinations, to on-demand urgent care including COVID-19 testing, to services like family planning.

Amazon plans to roll out the virtual care offering for its employees and third party companies nationwide this year, but in-person services will only be available shortly after in Washington state and near its second headquarters in Washington, D.C., and Baltimore, a spokesperson said.

Making Amazon Care available to outside companies puts Amazon in direct competition with virtual care giants like Teladoc, Amwell and Doctor on Demand, which bring in a sizable chuck of their revenue through deals with employer and payer clients.

Amazon is in discussions with a number of outside companies on supplying Amazon Care, the spokesperson said.

It’s unclear what differentiates the virtual care offering alone from other vendors. Most telehealth platforms are available to consumers right now at little to no cost and offer relatively short wait times, though Amazon contends it provides free access to a medical professional in 60 seconds or less and will eventually link telehealth with in-home care across the U.S.

The timing for the broader U.S. rollout couldn’t be better for Amazon, as telehealth has seen exponential growth during the COVID-19 pandemic. As a result of historic consumer demand and investor interest, virtual care giants have spent billions to gobble up market share and build out their suite of services.

The race to offer end-to-end telehealth offerings has resulted in a flurry of recent M&A, the most notable deal being Teladoc’s $18.5 billion acquisition of chronic care manager Livongo last year. In February, Cigna’s health services arm Evernorth also bought vendor MDLive for undisclosed amount. The insurer plans to sell MDLive’s telehealth offerings to third-party clients and offer it to beneficiaries. And just on Tuesday, telemedicine company Doctor on Demand announced plans to merge with clinical navigator Grand Rounds to try and better coordinate virtual care.

Shares in publicly traded telehealth vendors dove following Amazon Care’s announcement Wednesday. As of late morning, Teladoc’s stock had dropped 7.4%, while Amwell was down 6.7%.

But heft doesn’t necessarily translate to disruption in healthcare. Earlier this year, Amazon, J.P. Morgan and Berkshire Hathaway disbanded their venture to lower healthcare costs after three years of stagnancy. One reason was a failure for its initiatives to take precedence at its three separate parent companies, all pursuing their own avenues to cut costs.

Now going at it alone, Amazon has a slew of independent initiatives to reshape the U.S. healthcare industry. The $386 billion company bought and launched its own online pharmacy, PillPack, a few years ago, and also partnered last year with employer health provider Crossover Health to offer employee primary care clinics. Currently, Amazon and Crossover operate clinics in 17 locations across Arizona, California, Kentucky, Michigan and Texas.

However, though Amazon Care does give patients the option to fill prescriptions through Amazon Pharmacy, it operates independently of the other services. It remains to be seen how Amazon Care could tie in with these other businesses, but the answer to that question could have major ramifications for current market leaders.

The home-based care space heats up

https://mailchi.mp/05e4ff455445/the-weekly-gist-february-26-2021?e=d1e747d2d8

Home Healthcare Market Size, Growth Report, 2020-2027

This week Brookdale Senior Living, the nation’s largest operator of senior housing, with 726 communities across 43 states and annual revenues of about $3B, announced the sale of 80 percent of its hospice and home-based care division to hospital operator HCA Healthcare for $400M. The transaction gives HCA control of Brookdale’s 57 home health agencies, 22 hospice agencies, and 84 outpatient therapy locations across a 26-state footprint, marking its entry into new lines of business, and allowing it to expand revenue streams by continuing to treat patients post-discharge, in home-based settings.

Like other senior living providers, Brookdale has struggled economically during the COVID pandemic; its home and hospice care division, which serves 17,000 patients, saw revenue drop more than 16 percent last year. HCA, meanwhile, has recovered quickly from the COVID downturn, and has signaled its intention to focus on continued growth by acquisition across 2021.
 
In separate news, Optum, the services division of insurance giant UnitedHealth Group, was reported to have struck a deal to acquire Landmark Health, a fast-growing home care company whose services are aimed at Medicare Advantage-enrolled, frail elderly patients. Landmark, founded in 2014, also participates in Medicare’s Direct Contracting program.

The transaction is reportedly valued at $3.5B, although neither party would confirm or comment on the deal. The acquisition would greatly expand Optum’s home-based care delivery services, which today include physician home visits through its HouseCalls program, and remote monitoring through its Vivify Health unit.

The Brookdale and Landmark deals, along with earlier acquisitions by Humana and others, indicate that the home-based care space is heating up significantly, reflecting a broader shift in the nexus of care to patients’ homes—a growing preference among consumers spooked by the COVID pandemic. 

Along with telemedicine, home-based care may represent a new front in the tug-of-war between providers and payers for the loyalty of increasingly empowered healthcare consumers.

Stop thinking of telemedicine as a “substitute” for the office visit

https://mailchi.mp/41540f595c92/the-weekly-gist-february-12-2021?e=d1e747d2d8

Image result for thinking

“I don’t think we have good enough information to show how we should be deploying telemedicine,” a physician leader recently told us. “If we can’t show that a virtual visit can adequately substitute for an in-person visit, then we should be focusing on making sure patients know it’s safe to come in.” It struck us that viewing telemedicine as a direct substitute for an office visit was a narrow and antiquated way to think about virtual care.

Moreover, the argument that telemedicine visits are potentially cost-increasing if they are “additive” to other care interactions, rather than “substitutive”, is rooted in fee-for-service payment: more patient-provider interactions equals more billable visits, and with more visits, we run the risk of increasing costs.

Telemedicine (both video and phone visits) likely taps into pent-up demand for access by patients who would otherwise not seek care. Some patients could be aided by more frequent, brief encounters; this is considered a failure only when viewed through the lens of fee-for-service payment. (Honestly, with primary care accounting for less than 6 percent of total healthcare spending, it’s hard to argue that additional telemedicine visits will be responsible for supercharging the cost of care.) Of course, there are many clinical situations in which in-person interaction—to perform a physical exam, measure vitals, observe a patient—is fundamental. Patients know this, and understand that sometimes they’ll need to be seen in person. But hopefully that next encounter will be more efficient, having already covered the basics. 

The ideal care model will look different for different patients, and different kinds of clinical problems—but will likely be a blend of both virtual and in-person interactions, maximizing communication, information-gathering, and patient convenience. 

‘Really difficult nut to crack’: MedPAC torn over telehealth regs post-COVID-19

https://www.healthcaredive.com/news/really-difficult-nut-to-crack-medpac-torn-over-telehealth-regs-post-covi/593466/

Dive Brief:

  • Members of an influential congressional advisory committee on Medicare are torn on how best to regulate telehealth after the COVID-19 public health emergency, hinting at the difficulty Washington faces as it looks to impose guardrails on virtual care without restricting its use after the pandemic ends.
  • During a Thursday virtual meeting, the Medicare Payment Advisory Commission expressed its support of telehealth broadly, but many members noted snowballing use of the new modality could create more fraud and abuse in the system down the line.
  • Key questions of how much Medicare reimburses for telehealth visits and what type of visits are paid for won’t be easily answered, MedPAC commissioners noted. “This is a really, really difficult nut to crack,” Michael Chernew, MedPAC chairman and a healthcare policy professor at Harvard Medical School, said.

Dive Insight:

Virtual care has kept much of the industry running during the coronavirus pandemic, allowing patients to receive needed care at home. Much of this was possible due to the declaration of a public health emergency early 2020, allowing Medicare to reimburse for a greater swath of telehealth services and nixing other restrictions on virtual care.

However, much of that freedom is only in place for the duration of the public health emergency, leaving regulators and legislators scrambling to figure which new flexibilities they should codify, and which perhaps are best left in the past along with COVID-19.

It’s a tricky debate as Washington looks to strike a balance between keeping access open and costs low.

In a Thursday meeting, MedPAC debated a handful of policy proposals to try and navigate this tightrope. Analysts floated ideas like making some expansions permanent for all fee-for-service clinicians; covering certain telehealth services for all beneficiaries that can be received in their homes; and covering telehealth services if they meet CMS’ criteria for an allowable service.

But many MedPAC members were wary of making any concrete near-term policy changes, suggesting instead the industry should be allowed to test drive new telehealth regulations after COVID-19 without baking them in permanently. 

I don’t think what we’ve done with the pandemic can be considered pilot testing. I think a lot of this is likely to go forward no matter what we do because the gate has been opened, and it’s going to be really hard to close it,” Marjorie Ginsburg, founder of the Center for Healthcare Decisions, said. But “I see this just exploding into more fraud and abuse than we can even begin imagining.”

Paul Ginsburg, health policy chair at the Brookings Institution, suggested a two-year pilot of any changes after the public health emergency ends.

However, it would be “regressive” to roll back all the gains virtual care has made over the past year, according to Jonathan Perlin, CMO of health system HCA.

“These technologies are such a part of the environment that at this point, I fear [it] would be anachronistic not to accept that reality,” Perlin said.

Among other questions, commissioners were split on how much Medicare should pay for telehealth after the pandemic ends. 

That parity debate is perhaps the biggest question mark hanging over the future of the industry. Detractors argue virtual care services involve lower practice costs, as remote physicians not in an office don’t need to shell out for supplies and staff. Paying at parity could distort prices, and cause fee-for-service physicians to prioritize delivering telehealth services over in-person ones, some commissioners warned.

Other MedPAC members pointed out a lower payment rate could stifle technological innovation at a pivotal time for the healthcare industry.

MedPAC analysts suggested paying lower rates for virtual care services than in-person ones, and paying less for audio-only services than video.

Commissioners agreed audio-only services should be allowed, but that a lower rate was fair. Commissioner Dana Gelb Safran, SVP at Well Health, suggested CMS should consider outlining certain services where video must be used out of clinical necessity.

Previously, telehealth services needed a video component to be reimbursed. Proponents argue expanded access to audio-only services will improve care access, especially for low-income populations that might not have the broadband access or technology to facilitate a video visit.

Another major concern for commissioners is how permanently expanding telehealth access would affect direct-to-consumer telehealth giants like Teladoc and Amwell. If all telehealth services delivered at home are covered, that could allow the private companies to “really take over the industry,” Larry Casalino, health policy chief in the Weill Cornell Department of Healthcare Policy and Research, said.

Because of the lower back-end costs for virtual care than in-office services, paying vendors the same rate as in-office physicians could drive a lot of brick-and-mortar doctors out of business, commissioners warned.