Framing the Issue:

Hospitals increasingly are turning to telehealth as a tool to increase patient access to care, manage care better and lower health care costs.

52 percent of hospitals used telehealth in 2013, and another 10 percent were beginning the implementation process, according to the AHA.

64 percent of Americans would be willing to see a doctor via video, according to a survey from American Well.

7 percent of Americans (17 million) say they would change primary care doctors for the availability of telehealth visits, American Well found.

76 percent of patients prioritize access to care over the need for human interaction with their providers, an AHA report states.

Switching from in-person to telehealth office visits when appropriate could save U.S. companies up to $6 billion a year, according to a Towers Watson analysis.


In the not so distant past, telehealth primarily involved a patient in one health care setting talking to a clinician in another. Today, it’s that and much more, and it has the potential to change in fundamental ways how patients interact with the health care system.


Hospitals are expanding the virtual services they offer, as well as their geographic reach. And they’re embracing smartphone and tablet apps and other tools that give patients almost immediate access to providers.

The transformational forces in play throughout health care today are driving the trend — the push toward pay for value, the growth of accountable care and risk contracts, reimbursement pressure, Medicare readmission penalties, increased consumer price sensitivity, and a growing demand for care paired with a limited physician supply.

“About a year ago, the delivery side realized that if they’re going to be gradually more accountable for the well-being of their patients, they need to find a way to envelop their patients better when they leave the hospital, the practice, the clinic, and go home,” says Roy Schoenberg, M.D., president and CEO of the telehealth service company American Well. “The arrival of risk contracts has cemented the notion that if you believe that your future is only serving people through your brick-and-mortar buildings, you will be marginalized. What we’ve seen is that every delivery system out there is looking to equip itself with telehealth capabilities.”

Another motivator is hospitals’ desire to meet the Triple Aim of improved patient experience, population health and lower cost established by the Institute for Healthcare Improvement. Hospitals are using telehealth to prevent unnecessary visits and to give patients easier, quicker access to care.

“Making sure patients get the right treatment at the right time completely fits in with population management,” says Jonathan Bailey, vice president of operations who oversees telehealth at Mission Health, headquartered in Asheville, N.C. “[Telehealth] is going to help us reduce the overall cost of care, even when adding in the capital investment that’s required in technology.”

Hospitals’ initiatives run the gamut of care, including e-ICUs, telestroke programs, e-visits for primary and specialty care, tele-rounding, video-connected postsurgical transfers and follow-up, and urgent care. Some hospital systems are working toward virtual EDs and home monitoring to prevent illness.

Who owns the bricks & mortar? Who cares?

Mercy, a multistate health care system headquartered in Missouri, is banking on the future of telehealth with a $50 million, 120,000-square-foot virtual care center, slated to open later this year. The center is expected to manage more than 3 million telehealth visits in the next five years.

It will enable Mercy to expand its tele-ICU and telestroke programs to more hospitals that don’t have their own intensivists or neurologists. Word is spreading, and hospitals are reaching out to Mercy to form partnerships, says Randall S. Moore, M.D., president of Mercy Virtual. “The old structure of an integrated health system was that you owned all the bricks and mortar, but patients don’t care who owns the bricks and mortar. They want to make sure whatever care they need is available to them.”

Telehealth will help Mercy to remove barriers to care, regardless of patient location, Moore says. “With telemedicine, even though everyone thinks in terms of rural access, the key is not rural, the key is access — access to the care you need when you need it. Someone can live across the street from a world-renowned hospital and have all kinds of gaps in their care.”

For that reason, Mercy’s telehealth program includes virtual consultations with primary care physicians and a variety of specialists, and is gearing up for a future in which wearable devices will connect patients with their care teams to prevent illness, Moore says.

The e-visit program enables patients to go online via their smart devices or computers, enter a secure portal and have virtual consultations with their physicians. “That creates a whole lot more convenience. They don’t have to leave work. A lot of visits don’t have to be face to face,” Moore says.

Mercy started its e-visit program with existing patients’ using its own physicians, rather than contracting with a telehealth company. The system is linked to Mercy’s electronic health record. Eventually, Mercy could take the program a step further and bring in new patients through its virtual program. The vision is not to become a telehealth company, but to develop the full doctor-patient relationship through live, synchronous visits with video, Moore explains.

The health system also plans to ramp up its efforts to use telehealth to prevent readmissions. Mercy already uses home monitoring for discharged patients with such conditions as heart failure and chronic obstructive pulmonary disease. Under a pilot project, discharged patients will receive follow-ups virtually in coordination with their primary care physician and care team.

“The transformational view is that the patient will be continuously connected,” Moore says. “Virtual enables caregivers to continue to follow the patient after discharge through video and medical devices in order to provide a much higher level of care in the home.”

For families, virtual rounds

Jefferson University Hospitals, headquartered in Philadelphia, has begun using telehealth to bring patients’ family members into daily hospital rounds. Virtual rounds are conducted using a commercial videoconferencing application for smartphones and tablets. The goal is to relieve the frustration family members feel when they aren’t able to attend rounds and don’t know what’s happening with their loved ones’ care.

Jefferson has worked out technical details, has done virtual rounds with 25 patients and families, and is now working on scaling it up so any patient and his or her family can participate, says Judd Hollander, M.D., telehealth program director.

Hospitals also are using telehealth in urgent care. They’re finding that virtual visits can prevent unnecessary emergency department visits, says Jeff Levin-Scherz, M.D., national leader, health management practice at Towers Watson. “That’s a good thing from a public health perspective.”

Avoiding unnecessary ED visits is one motivation behind Jefferson’s telehealth program for unscheduled acute care. The system is working with American Well to create 24/7 access to Jefferson emergency physicians using an app called JeffConnect. “The underlying premise is to provide care where and when the patients want it, rather than where and when there is a doctor in the office,” Hollander says.

Nationwide, millions of people each year get their unscheduled acute care from EDs, retail clinics and urgent care centers because their primary care providers aren’t available or they don’t have one. JeffConnect aims to provide an alternative. “I don’t ever want to be reacting again to Wal-Mart and Walgreens [having done] things that provide easier care for consumers because we didn’t do it,” says Jefferson President and CEO Stephen K. Klasko, M.D.

The initiative is expected to launch in July, initially with Jefferson employees and the system’s accountable care organization. Using the app, a patient within minutes would be able to reach an emergency physician who would walk him or her through a process to determine whether further diagnostic testing is needed, whether a prescription could keep the patient at home or work, or whether the patient needs to go to the ED.

The initiative can save patients from long, exhausting, unneeded and expensive trips to the ED, while relieving pressure on overcrowded emergency departments and, in some cases, sparing other patients from exposure to communicable diseases. The growth of high-deductible health plans in the state exchanges and elsewhere will make virtual urgent care attractive, Klasko says.

Jefferson officials also are in the early stages of developing a virtual ED. It would build on the unscheduled acute care virtual program by partnering with a network of imaging facilities and laboratories that would accept patients that had been determined in an e-visit to need further diagnostic testing. “Our goal is to be able to provide the care without the patient’s spending several hours in an ED waiting room,” Hollander says.

The reimbursement conundrum

Provider reimbursement has long been a barrier to telehealth adoption, although the payment picture is beginning to improve. Twenty-two states and the District of Columbia have laws that require private insurers to pay the same amount for telehealth as face-to-face care, although restrictions still apply in six of those states, according to the American Telemedicine Association. Forty-seven states offer some type of telehealth coverage in Medicaid, though limitations often exist.

Traditional Medicare covers some services, but only in rural areas and not from the patient’s home. A bipartisan coalition in Congress is working on legislation to improve access to covered telehealth services in Medicare.

Even when telehealth is covered, its potential to drive down utilization by preventing hospital visits and promoting better care management carries the risk of financial losses for health systems that embrace it. “If hospitals remained purely interested in top-line revenue, [telehealth] could be very bad because we’re substituting telemedicine for services that hospitals used to offer,” Scherz-Levin says.

Alternative reimbursement models, however, turn that dynamic on its head because they create the incentive to avoid unnecessary care and to keep people well. But alternative contracts, such as bundled payment, accountable care and risk contracts, remain the exception and fee-for-service payment the norm. In 2013, 18 percent of hospitals participated in an ACO and 9 percent in bundled payment, while slightly more than 92 percent of hospitals had no patient revenues based on capitation, according to the 2015 edition of AHA Hospital Statistics.

Early telehealth adopters are counting on that to change. “You have to decide to stay stationary or skate to where the puck is going to be,” Hollander says. “Right now, telehealth is under-reimbursed, if reimbursed at all, so we are subsidizing our telehealth program for the time being. But, if one believes five years from now that patients aren’t going to want to drive to Center City Philadelphia to get their care and that payment models are going to catch up, then we’re ahead of the game.”

That viewpoint got a boost with Health & Human Services’ January announcement that it has set a goal to dramatically increase the percentage of Medicare payments through alternative payment models in the next few years.

Telehealth has business advantages in the here and now, Mercy’s Moore notes. It makes the hospital system more attractive to payers and patients by offering convenience, quality and savings.

Telehealth gives health systems an opportunity to establish a brand using devices that most doctors and patients already use. “Everybody has a phone in his or her pocket, everybody has access to a browser,” Schoenberg says.

Health care will be unable to continue to avoid consumer demand for online services that already have transformed other industries, Jefferson’s Klasko predicts. “The younger generation is not going to tolerate it. They’re going to want to understand why they can’t do in health care what they can do in every other part of their lives.”

In a move hoped to ease the path toward telehealth, the Federation of State Medical Boards last September issued model legislation aimed at speeding interstate medical licensure in participating states. As of January, the model legislation had been introduced in nine states, and 25 medical and osteopathic boards had expressed support for it, according to the federation.

As more states approve the measure, Schoenberg predicts, nationally known health systems will begin to compete for patients across the country via telehealth. Meanwhile, local systems might prove to be more agile in telehealth offerings and carve out virtual markets of their own. “You are looking at the point in time where the play for patient traffic is going to truly change,” he says.

Klasko envisions JeffConnect eventually becoming a national brand. As an early adopter, Jefferson University Hospitals hopes to attract hospital systems that don’t want to create their own virtual programs. Jefferson would partner with those hospitals to offer unscheduled acute care to their patients.

Big bumps, bigger benefits

Despite the bullishness on telemedicine, change won’t come overnight. Getting a telehealth program up and running takes time. Hospitals have to determine what types of services to offer, create new types of shifts for physicians, and come up with internal reimbursement models, Schoenberg says.

Working out shifts for 24/7 access to physicians is particularly difficult because doctors in some specialties aren’t accustomed to that kind of schedule. Mercy is evolving to the point where primary care physicians will be available for e-visits 24/7. A patient might not be able to get his or her own physician at a moment’s notice at night, but will reach another member of the doctor’s team instead. “It would be like the on-call doctor now connected at a much higher level,” Moore says.

Mercy also is working on being able to virtually connect specialists into primary care office visits within minutes of the primary care doctor’s request. The technology is there, but logistics need to be figured out.

“It’s workflow re-engineering, clinical re-engineering, operations re-engineering, change management, repurposing and retraining staff,” Moore says. “We have to teach people how to sit in front of a computer monitor or video screen versus walking into somebody’s room live.”

While telehealth poses some staffing challenges, it also brings opportunities. If virtual care meets its promise of avoiding unnecessary hospital visits and mitigating or eliminating the progression of chronic diseases, it would open up hospital capacity for patients who need hospital care, Moore says. The system then could shift some of its providers who were taking care of patients with heart failure, emphysema and diabetes in the hospital to virtual, person-centric care, he says.

In the case of a heart failure, use of telehealth to prevent a patient from deteriorating to the point of needing hospitalization not only cuts the cost of the condition, but also improves the patient’s quality of life and maybe prolongs life, Moore says. “We take part of that cost savings and shift it into care teams and other ways to optimize people’s health.”

Telehealth also could help to recruit and retain physicians, Moore says. Small hospitals have difficulty attracting highly specialized physicians but, with virtual care, communities have access to a higher level of care. In addition, a physician who’s been practicing for decades and wants to wind down practice could shift to taking more patients via telehealth at home. “That doctor can be the perfect person to support partners who are busier in the office,” Moore says.

Telehealth can enable hospital systems to provide more care with their existing staff, regardless of location. For example, American Well is rolling out software that allows physicians to plug into the telehealth system when they’re available for e-visits on their smartphones.

“If there is a need somewhere for a neurologist, our system would prompt them on their phones. If the physician is busy, he or she can just ignore it, and the system will hunt for the next one,” Schoenberg says.

That capability means hospitals could expand to new locations with fewer in-person providers, Schoenberg says. “The whole rationale about where you operate, how quickly you can increase your footprint, changes because you can project those services through the technology.”

While the telehealth revolution has begun, it likely will never end. “The journey for us is going to be an ongoing, forever [question of] how do we use technology more and more outside the hospital environment, make it as easy as possible for people to use, and move away from sickness care and toward health optimization,” Moore says.

Geri Aston is a contributing writer for Hospitals & Health Networks.



Executive Corner

A January 2015 AHA Trendwatch report on telehealth details three ways hospitals are using this technology.

1 Access and convenience for rural patients

About 20 percent of Americans live in rural areas without easy access to primary or specialty care. Telestroke, tele-ICUs, cyber surgery and remote monitoring can fill access gaps. Telepharmarcy and telepsychiatry also offer convenient access to needed services.

2 Improved quality and patient satisfaction

A growing body of research shows that telehealth can improve patient care. A study of 120,000 adult patients at 32 hospitals found that ICU telehealth interventions improved adherence to best practices, reduced response times and encouraged use of performance data. The Veterans Health Administration’s use of telehealth home monitoring of vital signs resulted in a 51 percent reduction in hospital readmissions for heart failure and a 44 percent drop in readmissions for other conditions.

3 Access to specialty care

Telehealth can fill the need for critical health care services in a variety of specialties. Acute respiratory illness and skin problems are two of the most common conditions for which patients seek telehealth. With a nationwide shortage of psychiatrists, telepsychiatry expands access to needed behavioral services and reduces emergency department demand. The list of possible uses for telehealth continues to grow, and patient demand is expected to increase.