What Amazon can teach us about telehealth adoption

One reason Internet shopping got established and grew as quickly as it did is that online shopping sites have enjoyed a built in tax advantage over traditional retail stores. In particular, purchasers have generally avoided having to pay sales tax on their goods. That differential was the result of technology getting ahead of tax laws. It wasn’t an intentional policy. And yet it’s had a salutary effect on the US economy by allowing an innovative form of commerce to take root. Now that the industry is maturing states are moving fairly quickly to equalize tax treatment of online and offline sales. Big players like Amazon are going along, because they are now at the point where they want R&D facilities in places like Massachusetts, and where they have the scale to justify more distribution centers closer to their customers.

Unfortunately the situation in telehealth is the opposite. The existing regulatory framework is based on in-person consultations where patient and provider are in the same jurisdiction. It didn’t occur to policymakers 50 years ago that broadband communications would allow the “virtual presence” of physicians from afar. Those rules should be changed. Slowly it will happen as pressures build to contain costs and allow new delivery models.

Since legacy rules hamper rather than facilitate the emergence of a useful new technology, perhaps it’s reasonable to look to other mechanisms to nurture telehealth’s growth with financial incentives. Here are a couple of ideas:

  • Rather than charging a comparable co-pay for eVisits and in-person visits, payers could charge a lot less or nothing for online visits
  • Payers could also pay a premium for physicians and other providers to use telehealth, such that they have a financial incentive to get over the hump

As with e-commerce, this might cost someone something in the early years. But the payoff comes down the road, as telehealth technologies enjoy faster and wider adoption than they would otherwise. It’s a facile comparison, but online visits started around the same time as e-commerce,  yet e-commerce has become mainstream while telehealth remains a novelty.


5 thoughts on “What Amazon can teach us about telehealth adoption”

  1. I completely agree that telehealth services can be evolved and developed on the lines of amazon and beyond. They should be made subscription based services, where you pay a premium for limited duration and can get unlimited or limited access to top notch health care.

    Technology has always acted as an effective bridge to lower costs and increase efficiency, so no wonder it can do the same with health care and medical services.

  2. We have no fear of increasing utilization with telehealth. The problem is spending money to offer benefits and no one uses them. We know exactly which ICD9 codes could be treated with an EVisit, we run reports to see the potential utilization and for groups with enough potential offer it. Then in turn see under 1% utilization. We could spend more money to advertise it but at a certain point we would be spending more money to advertise then we save.

    The problem is education. In any given year only a small subset of your members could utilize an EVisit. When you promote it at renewal by the time their need arises they have forgotten about it.

    For Telehealth to truly take off and be cost effective we need the doctor not the healthplan to be pushing it. The telehealth provider though usually is not the current provider so there is no motivation for the provider to push the service. If more providers offered the service they might be inclined to advertise it but I don’t see this happening any time soon.

    Staff model HMO, medical home, or plan that utilized nurse triage might have some luck but right now it just doesn’t get traction. Not for lack of healthplans wanting it to. Or lack of spending money trying.

    Office visit, when member goes cost between 40 and 80. Telehealth cost us $38. More importantly though is members getting the treatment they need. We know members put off needed care due to wait time or not being able to get an appointment.

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