Many virtual healthcare delivery solutions in a variety of configurations are coming to market – and many have already arrived. Understandably, employers are asking about the financial impact of these solutions. Seeing that many technological improvements in the healthcare space have failed to lower employer costs in the past – and in some cases even pushed them higher – the question is an important one.
We see these emerging virtual solutions as having the potential to mitigate costs through three main channels:
- Replacing higher-cost services with lower-cost services (for example, when a virtual visit replaces a trip to the urgent care center or emergency room). While some care will undoubtedly still need to be delivered in-person, we’ve seen estimates that between 65% and 80% of visits eventually will be able to be conducted virtually.
- Greater engagement in personal health and the health care system following from improved access to care. Front-end costs may increase in the short term, but higher utilization of quality primary care is expected to deliver long-term health care savings.
- Better outcomes achieved via digital monitoring and other mechanisms aimed at improving treatment compliance. In a recent study, 70% of providers surveyed reported that virtual care made patients’ continuity of care better or much better.
However, virtual solutions also have the potential to increase costs. The three primary risks are that virtual care solutions may:
- Create unnecessary utilization from members as a result of lower financial barriers and increased convenience
- Lack clinical oversight needed to prevent providers from driving excessive utilization of medical services
- Generate channel confusion for members, leading to sub-optimal experiences and outcomes
Given that virtual solutions present both opportunities and risks, it’s important to be able to recognize the characteristics of promising solution sets. Successful solutions will have longitudinal elements of engagement, in which individuals can develop trusted provider relationships and engage with their care team more frequently than in traditional provider/patient relationships. They will offer integrated experiences, where regardless of the service modality – AI chat, text, video call, in-person visit – information is shared seamlessly across interactions, leading to more efficient care and a better member experience.
And finally, financial incentives for providers must align with the goal of delivering quality, cost-effective care.
So how should employers look at making investment decisions, at least from a financial perspective? Typically, we would recommend comparing competing solutions and giving priority to those offering the greatest return over the next one to three years. But because the health care system of the future will almost certainly include many virtual pathways to care, employers may want to take a longer-term perspective and pursue opportunities that only break even in the short-term. While new healthcare technologies have been a significant driver of cost growth in the past, virtual care may lead us to a more cost-efficient health care system.
By: Sunit Patel, Agnes Quiggle and Christopher Smith, ASA