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.
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.
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.
Throughout the COVID-19 pandemic, experts have been warning of the dangers of postponed health care services. In January, the American Cancer Society, the National Comprehensive Cancer Network, and 73 other organizations, including many major health care systems, issued a statement stressing the urgency of preventive care. “We urge people across the country to talk with their health care provider to resume regular primary care checkups, recommended cancer screening, and evidence-based cancer treatment (PDF) to lessen the negative impact the pandemic is having on identifying and treating people with cancer,” the groups said.
That was sound advice not everyone could follow, as ProPublica’s Duaa Eldeib reported last week in a tragic story about Teresa Ruvalcaba. The 48-year-old single mother of three worked for 22 years at a candy factory on Chicago’s West Side. During the pandemic, disaster struck. “For more than six months, the 48-year-old factory worker had tried to ignore the pain and inflammation in her chest. She was afraid of visiting a doctor during the pandemic, afraid of missing work, afraid of losing her job, her home, her ability to take care of her three children,” Eldeib reported.
“Even though her chest felt as if it was on fire, she kept working. She didn’t want to get COVID-19 at a doctor’s office or the emergency room, and she was so busy she didn’t have much time to think about her symptoms,” Eldeib wrote.
Ruvalcaba’s pandemic fears were typical of patients across the nation, surveys revealed. A 2020 CHCF poll of 2,249 California adults revealed that even when people wanted to see a doctor for an urgent health problem, one-third did not receive care. Nearly half of those surveyed didn’t receive care for their nonurgent health problems.
Nationally, more than one in three people delayed or skipped care because they were worried about exposure to Covid-19, or because their doctor limited services, according to an Urban Institute analysis of a September 2020 survey.
The toll of this disruption in care — the forgone cancer screening, the chest pain that isn’t reported — will devastate some patients and families. Ruvalcaba had to face a diagnosis with a terrible prognosis, inflammatory breast cancer. “If she would have come six months earlier, it could have been just surgery, chemo and done,” Ruvalcaba’s doctor told Eldeib. “Now she’s incurable.”
“Unfortunately, we know we’re going to see some tragedies related to the delays,” Wiley Fowler, an oncologist at Dignity Health in Sacramento, told Ibarra.
Consequences of Delayed Care
Public health messages early in the pandemic urged people to avoid public places, including doctor’s offices. In April, as Hayley Smith noted in a Los Angeles Times story, the US Centers for Disease Control and Prevention (CDC) and the Centers for Medicare & Medicaid Services “both published guidelines recommending the postponement of elective and nonurgent procedures, including ‘low-risk cancer’ screenings, amid the first wave of the pandemic.”
Patients and doctors listened. Appointments were canceled. “Nonurgent” procedures encompassing a wide array of treatments and operations, including cancer surgeries, were delayed.
Preventive cancer screenings dropped 94% over the first four months of 2020, Eldeib reported. The National Cancer Institute expects to see 10,000 preventable deaths over the next decade because of pandemic-related delays in diagnosis and treatment of breast and colorectal cancer. Screenings for these cancers, which account for about one in six cancer deaths, are routine features of preventive care.
I know I should get another check soon, but the anxiety of COVID feels like more of a priority than the anxiety of cervical cancer.
—Molly Codner, a Southern Californian who received an abnormal Pap smear last summer
In California, cancer deaths have remained roughly the same as prepandemic rates, but that stability is not expected to last. Based on the National Cancer Institute data, Ibarra calculates that an additional 1,200 Californians will die from breast and colon cancer. The National Cancer Institute estimate is conservative “because it only accounts for a six-month delay in care, and people are postponing care longer than that,” Ibarra reported.
Nationally, death rates from cancer are expected to increase in a year or two. Slow-growing cancers will remain treatable despite a delayed diagnosis, Norman Sharpless, MD, director of the National Cancer Institute, told Eldeib. Yet for conditions like Ruvalcaba’s inflammatory breast cancer, delayed care can be disastrous.
Women, People of Color Disproportionately Affected
For women across Southern California, appointments have been delayed, exams canceled, and screenings postponed during the pandemic, Smith reported in the Los Angeles Times. “Some are voluntarily opting out for fear of encountering the virus,” Smith wrote, “while others have had their appointments canceled by health care providers rerouting resources to COVID-19 patients.”
Before Pap smears became part of routine American health care, cervical cancer was one of the deadliest cancers for women. Today, as many as 93% of cervical cancer cases are preventable, according to the CDC, and screenings are a crucial component of preventive care. Yet during the first phase of California’s stay-at-home orders, cervical cancer screenings dropped 80% among the 1.5 million women in Kaiser Permanente’s regional network, Smith wrote.
The effects of the pandemic shutdown extended beyond delayed Pap smears. Women who spoke to Smith said that “mammograms, fertility treatments and even pain prevention procedures have been waylaid by the pandemic.”
Sometimes, obstacles other than the pandemic are continuing to interfere with access to care. One woman had an appointment delayed and then lost her job and her health insurance, Smith reported.
“Molly Codner, 30, has needed a checkup ever since she received an abnormal Pap smear last summer,” Smith wrote, “but like many Southern Californians, the trauma of the last year still weighs heavily on her mind: Nearly a dozen people she knows have had COVID-19.” Codner told Smith that “I know I should get another check soon, but the anxiety of COVID feels like more of a priority than the anxiety of cervical cancer.”
People who face disparities in treatment and care are most likely to be hard hit by pandemic delays. That includes Black people, who were already more likely to die from cancer than any other racial group. Cancer also is the leading cause of death among Latinx people. Breast cancer is the most common cancer diagnosis for Latinx women. Overall, more Americans die of heart disease.
Black adults are more likely than White or Latinx adults to delay or forgo care, according to researchers from the Urban Institute.
Telehealth Solved Access Issues for Some, Not All
Telehealth was a boon for patients during the pandemic year. Yet, as Ibarra notes, “there’s only so much that doctors and nurses can do through a screen.” Dental visits, mammograms, and annual wellness checks were also put on hold by the pandemic.
Latinx, Asian, and Black respondents did not use telehealth as often as White respondents. USC researchers attribute these differences to “disparities in income, education and access to any kind of health care.”
Researchers at the Urban Institute report similar findings: “Black and Latinx adults were more likely than White adults to report having wanted a telehealth visit but not receiving one since the pandemic began, and that difficulties getting a telehealth visit were also more common among adults who were in poorer health or had chronic health conditions.”
After controlling for socioeconomic factors and health status, patients with limited English were half as likely to use telehealth compared to fluent English-speaking patients, the Urban Institute said. “Much work remains to ensure all patients have equitable access to remote care during and after the pandemic,” the researchers wrote.
Whether telehealth is conducted by video or phone may be crucial to ensuring access to care. A study of telehealth use at Federally Qualified Health Centers in California in 2020 found that “more primary care visits among health centers in the study occurred via audio-only visits (49%) than in-person (48%) or via video (3%). Audio-only visits comprised more than 90% of all telemedicine visits.”
Public health efforts might need to focus on two goals at the same time as the US recovers from the pandemic: increasing vaccine uptake to keep COVID-19 in check and proactively managing the fallout from delayed care.
“As we focus on recovery, we have to ensure that we get vaccinated,” Efrain Talamantes, a primary care physician in East Los Angeles, told Ibarra. “But also that we have a concerted effort to manage the chronic diseases that haven’t received the attention required to avoid complications.”
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 alsorepresents 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.
Though consumers say they’re increasingly confident in returning to healthcare settings, hospital volume is not returning with the same momentum across the board. Using the most recent data from analytics firm Strata Decision Technology, covering the first quarter of this year, the graphic above shows that observation, inpatient, and emergency department volumes all remain below pre-COVID levels.
Consumers are still most wary about returning to the emergency department, with volume down nearly 20 percent across the past year. Meanwhile, hospital outpatient visits rebounded quickly, and have been growing steadily month over month, finishing March 2021 at 36 percent above the 2019 level.
Meanwhile, a recent report from the Commonwealth Fund shows that no ambulatory specialty fully made up for the COVID volume hit by the end of last year. But some areas, including rheumatology, urology, and adult primary care, have bounced back faster than others.
With continued success in rolling out vaccines and reducing COVID cases, we’d expect a continued recovery of most hospital visit volume. It may be, however, that some areas, such as the emergency department, will never fully recover to pre-COVID levels. To the extent those visits are now being replaced by more appropriate telemedicine and urgent care utilization, that’s welcome news.
But the continued lag of inpatient admissions indicates that some of the loss of emergency volume is more worrisome—warranting continued efforts on the part of providers to reassure patients it’s safe to use healthcare services. Stay tuned as our team continues to dig into this data.
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 care. More 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.
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 depression—more 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.
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.
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.
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 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.
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.
About 36% of nonelderly adults and 29% of children in the U.S. have delayed or foregone care because of concerns of being exposed to COVID-19 or providers limiting services due to the pandemic, according to new reports from the Urban Institute and Robert Wood Johnson Foundation.
Of those who put off care, more than three-quarters had one or more chronic health conditions and one in three said the result of not getting treatment was worsening health or limiting their ability to work and perform regular daily activities, the research based on polling in September showed.
However, the types of care being delayed are fairly routine. Among those surveyed, 25% put off dental care, while 21% put off checkups and 16% put off screenings or medical tests.
The early days of the pandemic saw widespread halts in non-emergency care, with big hits to provider finances.
In recent months, health systems have emphasized the services can be provided in hospitals and doctors offices safely as long as certain protocols are followed, and at least some research has backed them up. Groups like the American Hospital Association have launched ad campaigns urging people to return for preventive and routine care as well as emergencies.
But patients are apparently still wary, according to the findings based on surveys of about 4,000 adults conducted in September.
The research shows another facet of the systemic inequities harshly spotlighted by the pandemic. People of color are more likely to put off care than other groups. While 34% of Whites said they put off care, that percentage rose to 40% among Blacks and 36% among Latinos.
Income also played a role, as 37% of those with household incomes at or below 250% of the poverty level put off care, compared to 25% of those with incomes above that threshold.
Putting off care has had an impact industrywide, as the normally robust healthcare sector lost 30,000 jobs in January. Molina Healthcare warned last week that utilization will remain depressed for the foreseeable future.
Younger Americans were also impacted, with nearly 30% of parents saying they delayed at least one type of care for their children, while 16% delayed multiple types of care. As with adults, dental care was the most common procedure that was put off, followed by checkups or other preventative healthcare screenings.
The researchers recommended improving communications among providers and patients.
“Patients must be reassured that providers’ safety precautions follow public health guidelines, and that these precautions effectively prevent transmission in offices, clinics, and hospitals,” they wrote. “More data showing healthcare settings are not common sources of transmission and better communication with the public to promote the importance of seeking needed and routine care are also needed.”