How Telehealth Adds to the Bottom Line

“Real knowledge is to know the extent of one’s ignorance”
— Confucius

A Brief History of Telehealth Use

For over two decades many clinicians and healthcare leaders, especially in smaller health systems, smaller clinics, or behavioral health agencies have not taken telehealth (“delivering care at a distance”) seriously.

Before the Covid-19 health crisis, telehealth had a fringe existence focused on giving rural patients access to specialists at academic medical centers. In the early 2010s a few forward-thinking health system leaders recognized telehealth’s (minor) relevance and started investing in building their own telehealth expertise. Starting with video visits, some programs expanded into remote patient monitoring and store-and-forward solutions.

But for the most part, prior to the Public Health Emergency (PHE), utilization was fairly low and limited to trailblazing clinicians of the “early-adopter” kind.

And that was despite Medicare continuously adding new billing codes for telehealth reimbursement on an annual basis (though their hands were tied to lift the ban on telehealth visits originating from the patient’s home), most Medicaid programs reimbursing the basic telehealth visits and RPM, and commercial payors in most states being required to reimburse for telehealth, in some even at parity.

(A valid excuse for FQHCs and RHCs was that the rules prohibited them to provide any kind of patient care to their patients, though they were “allowed” to facilitate video visits with others, mostly academic medical centers).

Fast forward to March 2020 when suddenly everyone was forced to switch to telehealth – though due to the lack of clinician training on webside manners, a lack of Telehealth TechChecks to powerfully prepare patients, and a “here’s a webcam and a video software login” approach to “support & training” by IT staff, most “telehealth” visits quickly turned into (much less efficacious) phone calls.

Utilization quickly rose, then fell, then rose again during Omicron and the rise of other variants in 2021. But in 2022 the numbers (except for a number of behavioral health teams) plummeted back into the single digits as a percentage of overall visit volumes.

For the most part, many healthcare executives were (and are) completely oblivious about the actual utilization — with little to no preconceived notion what level of telehealth was “good” or “desirable” for their organization and their patient population. As they say: “Ignorance is bliss.”

The Multifold Value of Telehealth

I strongly believe that “every system is perfectly designed to get the results it gets”.

With that mindset, I further believe that the lack of attention to telehealth by healthcare leaders is simply a lack of understanding how much value telehealth can add to the bottom line.

As outlined above, many healthcare leaders think of telehealth merely as a Covid stop gap measure. Or as something that only some young millennials would want (but not their aging patient population).

With so many healthcare organizations being concerned with their financial situation, I thought it would be helpful to highlight how telehealth as a clinical tool and as a strategic tool,

So here are a few ways how telehealth can add to the bottom line by increasing revenue, avoiding losses, and decreasing expenses.

Using Telehealth to Increase Revenue

Telehealth can add to the bottom line through an increase in revenue in multiple ways:

• Increasing Patient Loyalty
• Geographic Expansion
• Filling Schedule Holes
• Reducing cancellations
• Reducing No Shows
• Expansion of Services

Increasing Patient Loyalty: The modern healthcare consumer of today expects a very different service experience from the “patient patient” of the past. Even those living close by are nowadays living full, busy lives and appreciate the convenience of a video visit from the comfort of their home, during a break at work or even from the parking lot at the grocery store. These days most “maintenance care” needs to fit into the healthcare consumers’ schedules, and not the other way around. An increase in loyalty will almost ensure a higher number of visits over time.

Geographic Expansion: Televisits offer the great opportunity to serve currently underserved populations. These could be areas that are currently not served by any healthcare providers or where patients would have equally long travel distances to the “closest” provider. In addition if your clinic offers a unique expertise, telehealth provides a great opportunity to promote that expertise to a larger region. Patients have a choice (see patient loyalty below) and if a healthcare organization is going out of their way to make it easy and convenient for telehealth use will increase.

Filling Schedule Holes: Given healthcares’ current financial strains and most providers being a “fixed cost”, not having clinicians maintain a full schedule greatly undermines the profitability of any healthcare organization. And I’m not talking about pre-scheduled time for expected administrative tasks or education. I’m talking about any white space on the clinical schedule that was not filled. Telehealth visits offer a wonderful opportunity for same-day visits, because it does not involve the extensive logistics on the patient’s part to carve out 1-2 hours for a 10-15 min visit. Thoughtful process design can create the win-win of full schedules and a satisfying patient experience.

Reducing cancellations: One source of schedule holes are appointment cancellations or appointments rescheduled on short notice. By offering patients who are calling to reschedule the option to switch from an in-person meeting to a telehealth visit, a number of cancellations or reschedules can be avoided. Oftentimes it is not the time of the appointment that is the problem, but the time before and after the appointment to get to and from the provider’s office.

Reducing No-shows: Similarly no-shows can be avoided by including the option to convert the in-person visit into a telehealth visit. In addition, if a patient does not show, but can be reached by phone, the visit can still be conducted as a telehealth visit (as oftentimes providers are running behind schedule). Similarly, telehealth no-shows are oftentimes avoided, as patients may have simply forgotten the visit — and now, thanks to a call 5 minutes after the time they were supposed to log in, they can still “show up” on time.

These are just a few ways how telehealth can increase billable visits either with the existing patient population or with a completely new population.

Expansion of Services: This is definitely a topic for a separate article to explain the large universe of telehealth beyond video visits. Suffice it to say, that the additional revenue opportunities here lie in expanding access to specialty care services (e.g., genetic counseling, physical or speech therapy, etc.) and the whole world of remote physiological monitoring opening up opportunities for chronic care management, readmission prevention, and population health management to achieve the goals of value-based arrangements.

Beyond Increased Revenue

Increasing revenue through telehealth is but one of three benefits of telehealth that can add to an organization’s bottom line. In a future article I’ll explore how telehealth can be leveraged to avoid losses (including penalties and unmet value-based care goals) and to decrease cost (including client and patient retention).

What is your favorite example of how telehealth adds to your organization’s bottom line?