2020 Hero Health Innovation Alliance Virtual Care

Keep costs down to keep telehealth growing

The coronavirus pandemic has upended everyday life. Many have turned to distance learning and working, home deliveries of groceries and voting by mail to avoid infection and to comply with local restrictions. We are also seeing a digital revolution play out in how we pay for, deliver and receive health care. Rather than travel to a physician office or hospital, patients are logging on to an array of apps and tools to visit health care professionals via video.

As we seek to incorporate telehealth and remote monitoring into an ongoing transformation of everyday care, we should not make the blunder of mandating the same payment for virtual care that we do for visits in the physician office. Doing so will make telehealth services more costly and constrain telehealth’s growth at the very point in time we need to ensure its robust uptake.

I run the Health Innovation Alliance, a multi-stakeholder advocacy coalition in Washington, D.C. In just the past week, I’ve had two telehealth visits for routine care with my physicians. This has worked well for me and the doctor—it was fast, convenient and effective. It also took both of us less time. One of our health plan members reports a five-fold increase in telehealth visits in the first six months of 2020, from about one million visits for all of 2019 to about five million visits. And that’s just among patients covered by Medicare.

Providers turned to telehealth to protect themselves, their staff and their patients from the risk of viral transmission posed by in-person visits. To provide the needed flexibility and support the sudden increase in demand for telehealth services, the Health Innovation Alliance has been fighting to change the policies that inhibit the use of telehealth in Medicare and other programs. And in response, federal and state officials have rallied to make rapid—but temporary—changes to ensure that providers and patients are allowed to connect using the technologies they have available to them.

Notable reforms include modifying some standing state licensure requirements to allow certain providers to practice across state lines, allowing different methods, to be used for telehealth encounters (e.g., phone calls, asynchronous, audio-visual, etc.), and paying the same rate for certain services as an in-person visit.

But most of these changes expire as soon as the COVID public health emergency expires. We must prevent that from happening.

As policymakers consider what needs to be made permanent to support an efficient, effective health care system, it is clear that not all changes made for the public health emergency should be made permanent. Nowhere is this more evident than on the issue of payment parity—that is, paying medical professionals the same reimbursement for a telehealth visit as they receive for delivering in-person care.

Proponents of payment parity argue that it is necessary to motivate medical professionals to use telehealth instead of maintaining an exclusively in-person practice. But reimbursement is not the sole motivating factor for using telehealth. Patients and health care professionals have both become much more comfortable with telehealth over the course of the pandemic, and, in many cases, telehealth is preferable to, and more efficient than, in-person care (for instance, when a patient is making a routine visit or can be remotely monitored for things like weight gain in heart failure patients).

And by maintaining the legacy of the outmoded fee-for-service system inherent in payment parity, we lose an opportunity to harness the power of technology such as telehealth to drive value and bend the cost curve. As of 2014, the average estimated cost of an in-person doctor visit was $106, compared to the average estimated cost of $40 to $50 for a health care encounter via telehealth. The differences in these costs make sense because there is less overhead and time spent for a virtual encounter. And despite the Congressional Budget Office’s long-standing opinion that telehealth will result in increased use of services and costs to the health care system, a recent study by the NCQA Taskforce on Telehealth Policy found that initial data from the pandemic shows that total utilization of services remained constant.

Payment parity may also slow the much-needed transition to health care payments that are tied to the quality of care and a patient’s improved health, rather than the number of services or procedures performed. Instead, telehealth presents an opportunity to improve engagement with patients and should be factored into payments that are linked to better management of care.

Overall, payment parity makes sense on a limited basis for the duration of the public health emergency, but should not be adopted permanently. The U.S. health care system is too expensive, and telehealth provides a potential avenue of cost savings, while simultaneously making it easier for patients to access the care they need. We should be encouraging both cost-savings and greater access to care, not inhibiting them.

2020 Headshot Health Innovation Alliance Joel White 2
Joel White Executive Director Health Innovation Alliance

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