Unlocking the Value of Telehealth


The telehealth market is primed and set to explode, or so we’re told. What’s holding it back?

Dan Shellenbarger and Health Evolution

7 min read

Telehealth has been called an “enabler” of the Triple Aim. It has the potential to unlock value within healthcare by delivering the right care, in the right place, at the right time, stitching together a longitudinal health experience that enhances efficiency at many points throughout the system. For several years now, we’ve been told the telehealth market is set to explode.

And yet, several years have come and gone, and the market is still not cruising at speed. The car is built, the parts are connected and the driver is in the seat. What is holding it back?

In a conversation facilitated by Oliver Wyman Partner Dan Shellenbarger, health industry leaders came together at the Health Evolution Summit to debate telehealth speed bumps and the road to scale. Their take-aways are summarized below. You can also read the full report here.

Consumers of all ages (not just Millennials) increasingly view convenience as trumping relationship when it comes to low-acuity issues. And they seem willing to spurn personal relationships with providers for access and value.

What’s more, more than half of all US hospitals now use some form of telemedicine; providers have shown a willingness to embrace it when it enhances care to chronic populations, and when it improves their efficiency and operations; and increasing numbers of providers are using telemedicine for provider-to-provider consults.

That’s not all: Most private insurers offer some level of telehealth benefits; 29 states and the District of Columbia require that private insurers cover telehealth the same as they cover in-person services; and Medicare Advantage members have complete flexibility in using telehealth.

But telehealth still faces significant obstacles on both the “demand” and "supply" side. Demand-side issues include:

  • Consumer awareness. One recent survey found that 40 percent of consumers have never heard of telehealth.
  • Consumer understanding. Perhaps more significant is consumers’ lack of understanding of how telehealth fits into their benefits and care options. They may be more interested if they are not worrying about whether they will have to pay for it out of pocket.

Supply-side issues include:

  • Provider reimbursement. In a world that is still heavily volume-based, there is little incentive for providers to steer patients from in-person care to virtual options.
  • Push to reduce consumption. Some payers worry accessibility could lead to overuse, and may be holding back on promoting telehealth. Further, promoting tele-services may not be welcomed by incumbent local providers.
  • Lack of integration. If someone seeks a telehealth solution but the information never makes it back to the primary provider, it flies in the face of integrated care. Uncoordinated care drives both cost and consumer annoyance.
  • Uneven regulatory terrain. State licensure laws vary widely, adding complexity and uncertainty to both physician-to-physician and provider-to-patient telehealth consultations.

But perhaps the most significant obstacle is the false “silver-bullet” expectation that many have pinned on telehealth. Telehealth is not a single solution that will unlock value for the health system. It is a platform through which many solutions for many scenarios can be accessed.

Telehealth will emerge as many applications under many models, emanating from multiple points of origin. It will not overturn the existing care delivery model, just as e-commerce has not replaced retail. E-commerce inverted retail with people doing research and shopping online, but depending on brick-and-mortar solutions for delivery, fulfillment and service.

Obviously, people cannot obtain all their care via tele-solutions; but in the delivery system of the future, healthcare may be driven by tele-engagement, with brick-and-mortar providing “fulfillment” and, support across all applications and modalities.

To realize the potential of telehealth, players need to gain an understanding of the varied applications, and concentrate on connecting individual solutions to the existing core delivery structure. This is a shift from viewing telehealth as a singular solution that will solve issues of access and cost after cost. Telehealth is a horizontal platform that needs to be woven into all delivery modalities.

Read more about demand-drive and supply-driven telehealth solutions, and what comes next on the road to scale in this report.

rEvolution Outlooks on Connected Health bring together leaders from across the industry to strengthen the leaders’ understanding of the art of the possible and how to create value by connecting with customers in new and different ways. These leaders convene and work together to identify which new technology-enabled models are creating value ... and more importantly, what is necessary to drive success at scale going forward.