A Future for Telehealth and Value-Based Payment

Updated on June 15, 2021
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By Dr. Robert Wieland, Chief Medical Officer at Allina Health | Aetna

Finding ways to connect virtually has been vital to our physical and mental wellbeing as we have stayed home during the pandemic to keep ourselves and others safe. Even though we are physically distancing and taking extra precautions for safety, health care needs haven’t taken a back seat. As a result, while the pandemic has presented many challenges, the inspiring and unprecedented level of health care innovation, including the rapid adoption of telehealth, is unlike anything we’ve experienced before.  

Throughout the pandemic, methods for patient interaction and treatment needed to evolve to better serve individuals. As we’ve seen over the past year, these changes forced health care payers and providers alike to examine their models, find ways to simplify the health care experience, and most importantly, provide highly connected, safe solutions that care for our communities. 

But is telehealth a sustainable care solution that’s here to stay or is its rise in adoption a bandage to address the unique constraints brought on by the pandemic? While restrictions are loosening and more of the population is getting vaccinated, we have seen the use of telehealth options start to lessen, once again. To continue to make telehealth a readily available tool for patients post-pandemic, payers and providers will need to work together and collaborate to continue to make it a sustainable solution for all. 

What’s Next for Telehealth?

Telehealth isn’t new. It’s a tool that’s been leveraged by the health care industry to expand access to care and lower costs for decades. It wasn’t until the pandemic that we saw accelerated and wide adoption of its use by not only providers but patients too. Similar to what we experienced with the rise of eCommerce; the adoption of new technology takes time. Pre-COVID, the vast majority of people had never completed a telehealth visit. Now, the vast majority of patients have. 

Before COVID-19, Allina Health, for example, was performing around 50 virtual visits a week. However, in spring 2020, at its peak, it was performing more than 30,000 virtual visits weekly. Both patients and providers quickly adopted the use of telehealth during the pandemic since virtual visits provided an easy-to-use and physically distanced forum for ongoing care and in most instances was the only viable option.  

While telehealth usage has skyrocketed since the beginning of the pandemic and remains higher than it was pre-pandemic, we are already seeing its use decline since last spring. At Allina Health’s peak in April 2020, 60% of its patient visits were virtual, over the last few months, this has dropped to 15-20%.

Health care payers see telehealth as a tool to help lower health care costs and provide more options for members to seek convenient care. During the pandemic, payers reimbursing virtual visits at the same rate as in-person visits allowed for its quick adoption. If payment parity goes away, there is a risk that the use of telehealth visits will further decline, jeopardizing the momentum gained. We also know that health systems cannot re-size their fixed costs overnight to adjust for a lower payment for telehealth services. 

There is the opportunity for increased cooperation between both payers and providers to continue to accelerate appropriate telehealth use. One potential example utilizes a multi-year transition plan that starts with payment parity and then lowers reimbursements over time. Ideally, to make telehealth widely accessible and more feasible for a clinic or health system to operationalize, most of the payers in a given market would follow a similar approach to telehealth payment. What happens to telehealth parity is our short-term concern. How we leverage telehealth through value-based payment models becomes a long-term vision. 

A Call for Value-Based Payment Models

Another solution for enhanced telehealth use is through pursuing value-based contracts. Virtual visits through value-based contracts provide a lower-cost way to deliver care. Value-based payment models tie payments for care delivery to the quality of care provided and reward providers for both efficiency and effectiveness. This form of reimbursement is an alternative for fee-for-service reimbursement, which pays providers retrospectively for services delivered based on billed charges or annual fee schedules. Following a value-based payment model, parity becomes less of an issue and telehealth can remain incentivized. 

The transition to value-based payment models is happening slowly, however, like telehealth adoption, COVID-19 is accelerating its implementation, too. Finding success with value-based payment models, such as bundling, accountable care organizations and physician payment models, requires flexibility to leverage resources like telehealth. Value-based payment and the use of telehealth not only have the potential to further decrease health care spending, but also allows for improved patient satisfaction and access.

The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.