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Biopharma Insights: Virtual Visits: Now Coming to Homes, Doctors and Pharmacies

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Biopharma Insights – February 2018

 

Virtual Visits: Now Coming to Homes, Doctors and Pharmacies

 

By Jocelyn Keegan, Senior Consultant

One of the biggest trends for 2018 is virtual visits, in which patients receive remote diagnosis and treatment.  These can be done through a variety of arrangements, including kiosks at pharmacies connected to some of the nation’s finest medical centers or video visits at home from specialists through use of computers or mobile phones.  Use of virtual visits is growing rapidly, so it is important to understand the impact and opportunity for pharmaceutical manufacturers.

Long seen as some future state, the use of “telehealth” by innovative organizations continues to grow and mature. As tools and business models have evolved, their use is accelerating beyond connecting to a limited number of patients in rural areas. Major payers, including Anthem, Aetna and United Health Group, now routinely pay for virtual visits for traditional medical care.  Early adopters of virtual medicine, like Kaiser Permanente, are now seeing more patients remotely than in brick-and-mortar offices. In 2015, 52% of patient transactions at Kaiser Permanente were conducted online, by virtual visits or through the health system’s apps. In the public sector, the Department of Veterans Affairs (VA) is leading the way with one of the nation’s largest virtual visit programs, which served 700,000 veterans in 2016. Through VA Telehealth, veterans can virtually access some 50 clinical specialties, from dermatology to intensive care. Both public and private payers are looking to virtual visits to increase access to mental health services. Certainly, this year’s flu season is causing hospitals and practices to look for ways to increase the volume of visits and lower the risk of flu spreading by patients traveling to office or emergency room (ER) visits.

Drivers for virtual visits.  There are many drivers for why virtual visits have become so popular. They include:

  • Costs of care. The average virtual visit costs around $40, in contrast to $125 for an in-person office visit. In addition, virtual visits are expected to reduce costs of care, hospitalizations and ER visits for chronic illnesses, especially diabetes. Diabetes is one of the most common chronic illnesses, with treatment costs significantly higher than other diseases. Moreover, government statistics show that complications from diabetes result in 7.1 million hospitalizations and 14.2 million emergency department visits each year. The vast majority are considered preventable.
  • Scarcity of physicians. The doctor shortage is real. The United States could lack between 46,000 and 90,000 physicians by 2025. The biggest gap is for primary care doctors. There also is an inequitable geographic distribution of physicians (particularly specialists), with rural areas hit the hardest.
  • Strategic adoption by pharmacies. Pharmacies are ramping up use of virtual visits as part of a strategic move to offer more direct patient care in clinics and pharmacies. For example, New York-Presbyterian (NYP) and Walgreens are teaming up to provide remote access to NYP physicians on Walgreens’ website and kiosks at certain Duane Reade drugstores in New York City. CVS similarly is exploring direct-to-consumer virtual visit opportunities. Virtual visits are perceived as a way to create competitive advantage as well as bring patients into stores.
  • Physician payment penalties. Because many hospitalizations and ER visits are preventable, payers — particularly Medicare — are reducing reimbursements for readmissions. This is driving providers to adopt virtual visits to prevent readmissions and related payment penalties. In addition, the move toward value-based care also can negatively affect reimbursements if providers do not meet outcomes and other quality targets. Providers are responding, with over half investing in virtual visits to improve patient outcomes.
  • Expanded access to care. The explosion in electronic technologies has created a wide availability of options for virtual visits. Now virtual visits can be done just about anywhere and anytime through kiosks, tablets, mobile devices and other applications. Virtual visits also can add expert capacity across health care systems and individual providers.
  • Global use is expanding. Money talks, and investment in domestic and global telehealth is quite revealing. Virtual visits are here to stay. They are becoming a mainstay of care in all parts of the world. In 2015, the global telehealth market was valued around $18 billion; it is expected to hit over $40 billion by 2021. Domestic spending on telehealth should account for nearly a quarter of the total.

Leveraging virtual visits. Pharmaceutical companies are just beginning to evaluate the impact of virtual visits across practice settings. It will be imperative to understand how to leverage the new care setting in order to gain a competitive edge or risk losing market share. Emerging opportunities include:

  • Facilitating clinical trials. Virtual visits can help identify those patients who may be candidates for clinical trials. They can enhance recruitment by making it easier for patients to participate and not have to travel long distance several times a year to visit a trial sponsor. This can be especially important for patients with rare diseases, whose small populations tend to be scattered geographically. Virtual visits also can help monitor patients and provide more frequent and accurate data to facilitate research.
  • Going “beyond the pill.” Just about everyone in health care is being pushed to show that their goods and services provide value. Pharmaceutical companies are no exception. Both payers and consumers want medications to provide value in the form of improved outcomes. Virtual visits can help provide data and feedback to assist in outcomes measurement.
  • Getting in sync with changing medical practice. The practice of medicine is changing, with a huge assist from technology. Virtual visits are changing the mix of the care team by providing remote access to specialists. It’s not only physicians who are participating; it’s also midlevel practitioners, such as nurse practitioners and physician assistants, and pharmacists. Pharmaceutical companies must understand the technology because it is guiding decisions in the identification, treatment and follow-up with patients by a host of new health care providers.
  • Outreach to high risk patients for adherence and drug review. Under value-based care contracts, practices and care teams need to focus scarce resources on identifying patients across their practice for potential shifts in regimen or react to signals that patients are not adherent. The ability to schedule a virtual review with a patient makes many more complex programs within cost and time reach for practice staff focused on care coordination and management.
  • Connecting with patients. Technology, along with such government requirements as meaningful use, are enabling patients to become more active and self-directive in their care. In fact, consumers are becoming more involved in designing their treatment and therapeutic options. As a result, pharmaceutical companies need to develop digital engagement strategies to connect with patients to increase targeted services and products — as well as develop and maintain brand loyalty. “B2C” — or business to consumer — will become a new acronym and business model for brand teams.

It is clear that virtual visits are rapidly becoming part of the new health care landscape, even though issues related to adoption, reimbursement and legalities must be sorted through to smooth the transition. Point-of-Care Partners has done a deep dive on what that looks like, as well as opportunities and gaps. We look at the support payers and pharmaceutical companies can provide to assist practices in developing their pathways for virtual visits. We think virtual visits will be an important technology growth area for pharmaceutical companies to consider, especially with regard to treatment of chronic conditions. Let me know if you want to learn more.  You can reach me at jocelyn.keegan@pocp.com.