Tag: medical costs

eVisits: the 30 year march?

July 16th, 2014 by
This guy moves faster than eVisit adoption
This fella moves faster than eVisit adoption

When I first started working in healthcare I was told that innovations can take a long, long time to be adopted. Now I’m old enough to have experienced it for myself.

The big news in the Seattle Times this week?

“To cut medical costs and diagnose minor ailments, WellPoint and Aetna, among other health insurers, are letting millions of patients get seen online first.”

“In a major expansion of telemedicine, WellPoint this month started offering 4 million patients the ability to have e-visits with doctors, while Aetna says it will boost online access to 8 million people next year from 3 million now.”

This has been a long time coming, and we’re still at the early stages of adoption, with plenty of naysayers remaining. I first worked on eVisits (or webVisits) in 2001, when Healinx (now RelayHealth) commercialized them. Researchers at Stanford and UC Berkeley studied the webVisit and concluded that their use cut total medical costs while improving patient and physician satisfaction. Here’s a press release from January 2003 on the study (Final Results: webVisit(SM) Study Finds RelayHealth Reduces Cost of Care While Satisfying Doctors and Patients).

Here’s what I said about it five years ago (eVisits continue their slow, steady rise) –before the iPad, Meaningful Use, or the Affordable Care Act:

It’s interesting to be in late 2009 and see e-visits described as a “disruptive innovation” that “the medical establishment is fighting.”  It’s a sensible concept, fairly straightforward to implement, efficient, and effective for certain situations. Yet growth has been slow. Part of the issue is that it’s health care we’re talking about, where innovation tends to be retarded when it involves changing physician practices. Another, related problem is that there’s no great financial incentive for the physician or patient to make a change. Health plans that do cover e-visits often charge the same co-pay for patients as for in-person visits, even though they often reimburse physicians at a lower rate.

My guess is that over the next decade we’ll see e-visits become common. Why?

  1. Adoption will follow the typical S-shaped curve, and we’ll soon get to the steep climb almost regardless of other changes
  2. More patients and physicians will simply expect to communicate online, as they do in every other area of their personal and professional lives
  3. Payment systems will evolve to support e-visits, rather than penalize them
  4. Adoption of electronic systems in physician offices in general will enable e-visits
  5. Supporting technologies will evolve and emerge. These include remote monitoring, higher bandwidth, personal health records, and mobile applications

Enjoy the next decade and don’t expect things to change too quickly.

Halfway into the decade these five factors are still playing out. Having said that I could probably have just reposted the article and changed the date and no one would have noticed.

Will things speed up dramatically over the next five years? In 2019 will we still be reading articles about this “novel” approach? I hope not but fear that we may.

photo credit: Nasitra via photopin cc

By healthcare business consultant David E. Williams of the Health Business Group

 

 

Is medical inflation coming back to bite us?

June 25th, 2014 by

PWC made a pretty big splash yesterday with its projection that medical costs will rise at a faster rate next year than they have in the recent past. The story was picked up by major media and I was on TV last night to discuss it on Al Jazeera’s Real Money with Ali Velshi.

In truth, the story is not so dramatic. The PWC report focuses only on larger employers. Costs are expected to rise around 6.8 percent (versus 6.5 percent in 2014) and most employers are responding similarly to how they have for the past several years: shifting more costs to employees, implementing high deductible health plans, and spending money on wellness programs. These approaches are surprisingly unimaginative and not likely to be terribly effective.

High deductible plans cause patients to be conscious about the first couple or few thousand dollars of costs. After that, they don’t really care since they’ve reached their out-of-pocket max. And high deductible plans are harsh on lower income employees who have a hard time paying the first dollars out of pocket. Upper income employees barely notice the difference.

And wellness programs? PWC didn’t go so far as to endorse this strategy, which is a smart move to preserve their credibility. Some of these programs are nice benefits but it’s awfully hard to find one that is going to reduce medical costs.

What would work better? How about offering employees plans that reward them financially for choosing lower cost, high quality providers?

Even if employers are paying more, things are not necessarily so dire for those buying insurance in the individual market. Average premiums are likely to rise for 2015, and the plans with the biggest market share are raising premiums the most. But thanks to the Affordable Care Act consumers are now dealing with a competitive market in insurance. As long as they are willing to switch plans, in many cases they’ll actually be able to reduce premiums. We’ll see in a few months just how savvy exchange shoppers are.

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By healthcare business consultant David E. Williams of the Health Business Group