CareTalk Podcast – Telehealth: Future or Fad?

Is Teleheath the future of healthcare or is it a fad? In this episode, John and David debate whether or not Telehealth is here to stay in the US.

David Williams:

John, I’m done with the pandemic and I’m done with telehealth too. I’m ready to go in and see my doctor again.

John Driscoll:

Telehealth’s not done with you, the best is yet to come.

David Williams:

Welcome to CareTalk, America’s best home for incisive debate about healthcare business and policy. I’m David Williams, president of Health Business Group.

John Driscoll:

And I’m John Driscoll, the CEO of CareCentrix.

David Williams:

John, I would say telehealth is so over, the pandemic is over and telehealth is going to be all done except for a couple Gen Z and millennials who are going to not hear that the party’s over and they actually can go back to the doctor’s office.

John Driscoll:

David, I think you’re missing yet another new tech wave. You’re sitting there and you’re on your bicycle, you’re going to miss the evolution of the car here, buddy.

David Williams:

No, I’m on my horseless carriage, John. Come on, I’m with the times now.

John Driscoll:

I disagree, I think that there’s no underestimating how the empire of old healthcare is likely to snap back and grab more share and try to solicit all of that activity that got shut down during a pandemic. But let’s be honest, people are more comfortable using a telephone, using a video chat. David, this is like the dawn of the internet. Where there were these explosions of use in things like eBay and Amazon that were just a taste of what was coming. And I think that when people… We just had a big market test, where we went from tiny utilization of telehealth to augment healthcare, to people 80% of all visits became tele and video visits, I don’t think we’re going back. I think there’s going to be a pushback from old legacy healthcare institutions, but I think the plates have moved and they’re still moving. How do you even support the notion that we’re going to go backwards, versus forwards once people…

John Driscoll:

All of the reviews are that people really enjoyed telehealth.

David Williams:

John, I’m just taking a look at the data. So we went from about 80%, as you said, it had been about 2% before the pandemic, then it went to 80% by April 2020, and now we’re back to more like 20% again, which granted is 10 times what it was before, but it’s at a low level, it may decline further. What you’re also seeing, John, is an attack on some telehealth. So I saw they allowed interstate commerce in telehealth, but now I’m seeing pushback, there’s hundreds of bills being filed in state legislatures in the country, and a number of them are about restricting interstate telehealth.

David Williams:

For example, I saw the Betty Ford Foundation, those are good folks. In Minnesota, they’re providing-

John Driscoll:

Who would know that program?

David Williams:

Well, people who need it, and they’re providing behavioral health support, among other places, Montana, which is great, people can get access. But now what, in Montana they’re saying, “No, no, no. That’s bad.” Because they’re skimming all the private pay patients and the Medicaid patients are left with nobody. So John there’s not quite as many bills as for the voter suppression laws, but same idea, same order of magnitude.

John Driscoll:

But I think, David, if you look back over the arc of healthcare innovation and reform, whether it’s around what doctors could do outside of the hospital, versus inside the hospital, the way hospitals fought that. The way individual pharmacies fought chains and then fought mail order. Once the consumer gets a taste of what they want and it solves a problem of cost, convenience, and access, I don’t think we’re going back. There’ll definitely be a pushback by the old legacy, the conservative legacy players, who are worried about their franchise, but there’s just way too much in healthcare, which costs too much and does too little.

John Driscoll:

And there’s an enormous amount of friction, which is transportation, setting up a meeting, sitting and waiting, hurry up and wait in the healthcare system. A lot of which is solved with telehealth, and virtual health, and a digital first front door. I think we’re definitely in a reaction to the big market test of telehealth, but the market exploded, tested telehealth, and it didn’t break it, it actually made it a lot more accessible. I think we’re just in the first few stages.

David Williams:

So John let’s look at this through the lens of the Amazon versus Walmart rivalry. They consider themselves, certainly Walmart considers Amazon to be its biggest rival, and I think Amazon feels similarly, at least in many areas of commerce. Now, a year ago, I actually would have said, Walmart is actually going to win this game, they’re going to knock all the primary care practices out of business, the way they knocked all the main street mom and pop stores out of business. And they’ll be the ones that are dealing with primary care and beyond that, including behavioral, including dental, and they’ll do it in their big stores, like the ones they opened in Georgia to start with and they’re going to roll that out. Now, a year later, I don’t know. I think people are still going into Amazon, they may have a chance, but they… Sorry, still going into Walmart. But they pulled back, they pulled back. And meanwhile, Amazon’s coming to the four. Does Amazon have now a better chance because of their ability to use telehealth? I don’t know, what do you think?

John Driscoll:

Well first of all, I think Amazon’s focused on selling more pharmacy through its online, through its digital store. And telehealth, you need a doctor’s script to get a drug, and so I think the move to virtual care is at least partially to really launch their pharmacy product, which I think will be very successful. Although, it doesn’t necessarily cry that other digital pharmacies like Capsule or GoodRx, but it will definitely put pressure on the Walgreens and the independent pharmacists and the CVS’s of the world. But beyond that, Amazon has a history of testing all kinds of things. The only external board that Jeff Bezos was on, was drugstore.com, and it was a flop. Amazon has invested in onsite clinic businesses, they were flops. Amazon has invented some different technologies, some of it’s e-readers.

John Driscoll:

Amazon’s willing to take a risk and fail. And I’m not sure that I would worry about their virtual care model competing with traditional care. I think others will come into virtual care because what they’ve shown a desire to do, is extend their reach into the home, but really to drive more retail sales. So David, you’re going to hear more from them by Alexa accelerating your industrial strength purchases of Mallomars, and that kind of stuff, and I think that the groceries are going to be tied into pharmacy. But I don’t actually think of Amazon as wanting to change primary care, I think where you’re going to see that happen, is probably some of the other tech enabled healthcare services providers, who are squarely focused. The Teladocs of the world, perhaps this new merger of grand rounds and doctor on-demand, that are starting to try to merge their digital offerings with a digital first care alternative.

David Williams:

See, I think the Amazon and Walmart one is very interesting because what they have in common, is they both go into a new service line and say, “I’m just going to do it much cheaper and more conveniently than you would have thought possible before.” A year ago, Amazon wouldn’t have been able to have a credible digital first offering because the market wasn’t there. Now people are used to it, and you can actually do that, whereas, people might actually be concerned about going into a Walmart. Now you raise the question of people like Teladoc and Livongo. What’s interesting there, is that they of course go beyond just the visual component of telehealth and they add things like devices for remote monitoring. And I think it’s one thing to say, “Your doctor’s visit is canceled and you can’t come in, let’s do a video visit.”

David Williams:

It’s another thing to say, “We’re never going to have that visit in-person in the first place, now you’re going to need some devices.” Some of what you can do, of course, just with your smartphone, but other things like standard products like blood pressure monitors, pulse oximeter, a scale glucometer you can use. But then I think there’s going to see some more innovative things like respiratory monitors, voice analysis, EEG, otoscope that you can use to check the eardrums, and if people have a bit of equipment like that at home, then I think it’s wide open. Maybe for a Teladoc, maybe for an Amazon, and maybe walmart.com can get into the game too.

John Driscoll:

I think all of this is with the backdrop that traditional healthcare kind of sucks. And the average mom with a sick kid, dad with a sick child, just wants an answer, and if I could buy some basic equipment and do a quick video chat, my kid spikes a temperature, that would be hugely helpful, if I could look at a… Show them a picture of a contusion and determine whether there’s a bad bruise, whether there might be a break and it needs to go for an x-ray, we could triage much more effectively in the same way a generation ago, you had different people pumping gas into your car. And that went away when the consumer realized it was a lot more efficient to just go and pump your own gas.

John Driscoll:

I think the same thing is going to be true of telehealth and some of this new equipment to [inaudible 00:09:37], in addition to where we are right now, in terms of those basic diagnostic pieces of equipment, they’re getting cheaper and more robust and more integrated into the digital world. So you’ll be able to evaluate those situations and actually feed it back to the doctor, thereby taking some of the basic things that happen in a doctor’s office… Look, my 88 year old mother had the ability, she’d much prefer to put some simple piece of equipment on her, get the diagnostic, send them to the doctor and have a video conversation, rather than have to go schlep over to the doctor’s office, wait for a while with a bunch of other sick people… This will be a big enhancement, and you’ve got, not just the explosion of telehealth, but the emergence of a lot of low cost, digitally integrated diagnostic tools that I think are going to be woven into the healthcare system.

David Williams:

John, this is healthcare, so we would be remiss without a conversation about reimbursement. And after all, the reason that the use of telehealth went from 2% to 80% is a combination of necessity, people couldn’t come into the doctor’s office, but plus reimbursement. Because all of a sudden it was on par and could be offered across state lines. Now, my inbox is filling with tons of emails, now that the new HHS Secretary has been confirmed, everybody is congratulating him and saying, “And by the way, here’s what you should do about telemedicine reimbursement.” How is that going, that jockeying?

John Driscoll:

I think what’s Interesting about the reimbursement battle, is you’ve got a couple of different things going on. You’re going to see regulars like they do with mail order pharmacy thread of throw up blocks that you were talking about before. You’re going to see health insurance companies worry about the downside of making telemedicine too attractive and thereby getting more visits virtually as well as in-person. So they’re probably going to put some restrictions and you’re going to have the providers start to worry about, well, for my… Forget which basic E&M codes that they get to charge for, is it more efficient and higher margin to do it virtually? But all of that is a little bit of a… We’ll be sorted out in the mosh of the politics and economics of healthcare. But effectively, if the digital first front door becomes more efficient and effective, if it’s easy for customers and patients, whether they’re chronically ill or have an episodic need, this will be emerging as real competition for your friends in legacy healthcare institutions like hospitals.

John Driscoll:

And as Toby Cosgrove talked about in an earlier podcast, they, the Cleveland Clinic, found that they could do a better job at managing complex diabetics using a digital first alternative and managing more of that care at home, and it actually leveraged the hospital. I think the innovators are going to win and the folks who stand still or fight it are going to lose.

David Williams:

John, it has become a truism that all healthcare is local, but with telehealth, that’s not necessarily the case anymore. And I think that this cross border example is very pertinent and you see, it raises a lot of questions. So we are talking about before, how the Betty Ford Foundation, for example, is offering mental health services from its base in Minnesota to other states like Montana. That was great during the pandemic, but now the providers in Montana are saying, “Hey, I don’t like the competition.” But of course that’s not how they frame it, they say Betty Ford is skimming the commercial patients that are well reimbursed and leaving the local providers with just the Medicaid population, where they don’t make enough money to make it possible for them to see the patients. So this brings up a lot of interesting questions.

John Driscoll:

I think at the end of the day, what you’re going to see, is that the virtual care providers… Look at mental health, where we’ve got so much more demand than we’ve actually got in inpatient resources, in-person resources to sport, whether it’s across veterans, or younger folks with depression, or women with postpartum. Pick your category, people who are depressed, or anxious because of the pandemic folks who are suffering after our traumatic loss. We just do not have the resources to be able to slot everybody into an in-person meeting, but if you can expand the aperture and do much more virtually, you dramatically expand the capacity to serve. And I think this argument over reimbursement is a sideshow relative to the capacity, expansion, simplicity, and convenience of telehealth. I think what’s going to be interesting is, do the incumbent telehealth providers rapidly accelerate and innovate so that it’s more than just an episodic drive by consult by the doc.

John Driscoll:

And they turn it into one that’s more integrated into in-person visits and is more substantive, and they can show more value. I think if that’s true, the fact that it costs probably less than half of a cost of an in-person visit to provision, that’s where people are going to go, because it is more convenient, and patients want feedback, and they want things that are simple, and lower cost. I think the virtual teams are going to win and the reimbursement issues, which I’m sure that the folks are going to fight over, is going to be a sideshow relative to competition between a system that’s not convenient and not integrated. And one that is convenient and can be integrated, not just into your care loop, but digitally into your life.

David Williams:

Well John, just like in the olden days when they had the circus, some people liked to be there in the big tent and see the three rings, and some of us liked to be outside and see the sideshow or the freak show. Yeah, I’ll be with the freak show, you can go in and sit in there. In any case, that’s it for yet another edition of CareTalk, I’m David Williams, president of Health Business Group.

John Driscoll:

And I’m John Driscoll, the CEO of CareCentrix, and I have no idea where David and the circus ended up into this podcast. But in any case, if you liked it or not, please give us feedback and please subscribe.