The Enduring Impact on Healthcare Delivery

Over the past few years, many of our established healthcare clients have considered telemedicine or virtual health capabilities. Yet, in many cases, they’ve perceived these investments as unattractive due to the required new technologies, provider adoption challenges, reimbursement and credentialing roadblocks, and a limited, perhaps even awkward, experience.

Yet, COVID-19 marks a pivotal moment for the use and adoption of virtual health. Harvard Business School professor Clayton Christensen coined the term Disruptive Innovation—one popularized by his book The Innovator’s Dilemma. The phenomenon explains that disruptive innovation transforms markets fraught with complications and high costs by bringing simplicity, convenience, accessibility, and affordability. Driven by COVID-19, virtual health may prove to be the next Disruptive Innovation that redefines the industry. The disease is catalyzing the adoption of virtual health—adoption that’s further accelerated by government and regulatory support. For example, to increase access to medical care and ease the burden on traditional care channels in the wake of COVID-19, the Centers for Medicaid and Medicare Services (CMS) has recently relaxed HIPAA constraints on the use of private communications tools (e.g. Zoom and FaceTime) in the delivery of healthcare.

Enter a Disruptive Force

To combat COVID-19 and to respond to the new environment it’s created, recent changes are driving the adoption of virtual health to promote safety, range, capacity, and flexibility beyond the walls of physical facilities.

Structural changes: Virtual health is on the national agenda due to its convenience, potential capacity enhancements, and reinforcement of social distancing behaviors. As a result, the government has adjusted regulatory barriers to virtual health. These changes may become permanent as consumers, regulators, and the healthcare industry grow to appreciate the benefits of telemedicine, and as payment models adjust to reflect virtual health models. Several recent structural changes include:

  • The U.S. government’s declaration of a national emergency with $100B in Federal stimulus funding targeted to healthcare providers; Additional funding is likely to surpass $500B in total stimulus packages
  • Reduced restrictions on licensure and credentialing related to the practice of telemedicine across state lines
  • Relaxed HIPAA requirements to support the increased use of virtual health and new technologies in healthcare
  • Reduced origination (site of care) restrictions including homes and personal devices

Patient adoption: As of 2019, fewer than 10 percent of Americans had used telemedicine, yet patients are now trying these technologies out of necessity. The assumption that patients must visit a physical facility for care is no longer valid. Take China for example, which moved 50 percent of all medical care online due to COVID-19. And recent studies in the U.S. suggest that virtual health will continue to be a viable and sustainable path for COVID-19 care by reducing ER visits, saving physical hospital space, and slowing disease spread.

Provider adoption: Providers must respond to the pandemic while experiencing staff and revenue headwinds due to cancellations of non-urgent services and pandemic-related delays. Health leaders are actively encouraging patients to utilize remote triage and screening services. At the same time, health systems and providers across the U.S. are suddenly scrambling to reach patients, including virtual follow-ups visits for procedures such as post-surgical joint replacements, diagnostics for dermatology, and wound care assessments. In addition to upholding continuity in patient care, these visits have the added benefit of reducing revenue leakage, a boon to hospitals and medical offices strapped for cash with all non-essential and elective procedures on hold.

Payor adoption: Many commercial payors are waiving fees and proactively communicating with members to encourage virtual health. The current environment is also escalating payor contracting with telemedicine vendors, a trend that will likely expand and increase competition in the virtual health sector.

Embracing the Future

Surgery and high-touch appointments will continue to require in-person care for the foreseeable future, yet healthcare companies must still adapt to this new dynamic. In the future, many patients will likely favor the ease of immediate virtual care over having to call, schedule, drive, and wait for an appointment, which could take weeks. Consumers have an increasing number of healthcare options, and potential patient leakage alone presents a compelling business case. All else equal, the organizations that best deploy technology within their operations and ways of working to enable convenient, personalized, and quality patient/provider experiences will solidify their position as future industry leaders.

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To adapt ahead of this disruptive trend, where should you get started?

  • Shift your culture: Reinforce to physicians that the industry’s underlying assumptions are changing. Engage physicians in the development of virtual health models to ensure they support clinical practice, workflows, and their ability to engage in a personalized manner with patients. Proactively communicate with patients about how you’re applying technology to support their health and access to care.  
  • Prioritize and roadmap: There are many departments, services, and options to consider in the move towards virtual care. Identify the top virtual health services that matter most to your organization and your patients as you consider and prioritize implementation strategies. Begin to develop long-term plans to implement more robust solutions after the COVID-19 crisis subsides. Align those long-term plans and actions to an overarching vision and set of goals.
  • Focus on experience: While we may tend to get bogged down in the technology, we cannot forget that technology’s end goal is to connect people: the provider and the patient. Involve clinical teams in evaluating, developing, and deploying solutions to support buy-in and adoption of virtual health solutions—ultimately driving the experience for patients and providers.
  • Plan for scalability: To support a sustained bump in demand during and post-COVID-19, solutions should include both scalable infrastructure (platform, bandwidth, integration) and support services (troubleshooting, administration, scheduling, training).  Ensure that physicians and staff have established connections to real-time IT support and build in collaboration tools to support scheduling functionality by remote teams.  
  • Evaluate service providers: Conduct the appropriate due diligence on prospective virtual health service providers, including understanding the true operating capabilities, constraints, and experiences. In your evaluation, consider experience, ease of interoperability, and integration capabilities with existing technologies.

COVID-19 opens the door for organizations to question long-held assumptions and place every aspect of the business and clinical operations on the table for scrutiny and evaluation. In this climate of disruption, hospitals and health systems are exploring strategies that radically transform traditional, physical models of care delivery. The pandemic has fundamentally altered the ways that patients receive healthcare, and in response, healthcare organizations that deploy virtual health will both adapt in the near term and sustain longer-term durability.