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Thought Leaders: Virtual Healthcare

Wiliam Eggbeer was featured in the May/June edition of MCOL Thoughtleaders newsletter. The question asked was:

“What are some specific implications for consumers and providers regarding the impact of an over 70% increase of stakeholder investment in digital health during the past two years?”

The pandemic has put a spotlight on the digital healthcare market and has attracted a swarm of virtual care entrepreneurs with consumer- and provider-focused innovations ranging from personal health and fitness, to primary care, home-based hospital care, care for patients with chronic conditions, on-line behavioral health services, and nonsurgical specialty care (including pre- and post- procedural care). We have learned that for many healthcare consumers, in many circumstances, in-person provider contact may no longer be considered as important, or even advantageous, opening the door for digital innovation and the virtualization of healthcare.

We expect that digital innovation will lead to long-term disruption of the organization of healthcare services. Many services will no longer be geographically bound, and aggregators of virtual services such as telemetry, sensing, expert consultation and mental health will create new areas of competition and market reach. Provider systems have been strategic investors in digital innovations for several years now, investing in innovations that strengthen clinical and supply chain quality and efficiency. Many observers expect that local health systems will become increasingly comfortable outsourcing capabilities to national-at-scale clinical service organizations. This is not to suggest that direct physician contact will disappear. Consumers will continue to value high-touch interventions. But the long simmering issue of hospitals serving as the source of infection, and hence to be avoided, has helped build consumer acceptance in using virtual platforms for a wide range of communications. In-person physician care will still be essential for care for the very ill, procedural diagnostics and surgical interventions. But for routine well-care, uncomplicated chronic care, professional consultations, and care for isolated communities, virtual care is likely to expand as more the norm. All of this, of course, depends on maintaining adequate reimbursement for virtual visits either through CPT codes or salaries. If Medicare and other payers were to shut off payment for virtual care, we could go backward. But this seems unlikely since the digital innovations are ultimately more efficient, and the strong backing for value-based care from most major payers.

As life begins to return to normal after vaccinations take hold, provider system leaders in particular may wish to assess the strategic implications of virtualization in terms of:(i) whether their system has sufficient scale to develop virtual clinical product line capabilities that would allow them to serve a broader regional market; (ii) the impact of virtualization on the health system’s physician enterprise, particularly on independent physicians who have been disproportionately impacted by pandemic loss of business; and (iii) determining whether the system has the capacity for effective market segmentation and the ability to design and correctly price consumer- and provider-focused solutions based on that data.

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