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How McLaren's Virtual Care Offerings Generated $6.4M in Revenues

Analysis  |  By Jack O'Brien  
   January 28, 2021

Bart Buxton, CEO of McLaren Health Management Group, details how the affiliated 15-hospital health system stood up its virtual care services prior to the pandemic and continues to look for opportunities to expand.

For many health systems, the COVID-19 pandemic served as a catalyst for establishing a telehealth program and fully embracing virtual care services.

In light of the temporary cancellation of elective procedures due to the outbreak, hospitals stood up virtual care services to meet the care demands of their respective patient populations.

However, for McLaren Health Care, the 15-hospital health system headquartered in Grand Blanc, Michigan, telemedicine had been a key part of its business strategy for years prior to the pandemic.

Bart Buxton, EdD, is CEO of McLaren Health Management Group, the system's "home health, palliative care, hospice, home infusion, long-term care pharmacy lab services arm." In an interview with HealthLeaders, he said that McLaren began its virtual care services journey in 2015.

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The system first unveiled a remote patient monitoring and neuro-stroke program that year, then established a direct-to-consumer 'McLarenNow' partnership with Teladoc in 2018. This year, McLaren launched its 'McLarenCareNow' retail partnership, which operates 11 virtual care clinics with Walgreens, resulting in savings of more than $3 million due to the use of existing medical staff.

The organization's partnership with Walgreens was originally budgeted to handle around two patients per day and lose $3.5 million in its first year, Buxton said. When the partnership began, he said McLaren serviced 29 patients on its first day and has been seeing around the same number of patients every day since.

Buxton attributed the heightened patient surge to the immediacy and accessibility of the care received through telemedicine. Given the unexpected response from consumers, Buxton said the original deficit projection is now expected to either result in a break-even first year or a black bottom line.

Buxton said that McLaren Health Care, along with other health systems, is trying to keep pace with the influence of consumerism and how patients expect to receive care.

"As we began to look at the changing role of consumerism, we also began to look at the areas where we didn't have penetration and the providers that we needed, and we looked at virtual care as a way to solve that," he said.

Telehealth: Good for the patient and bottom line

Buxton said that once an organization makes an investment in its telehealth infrastructure, which can be as simple as connecting the EMR to a patient's cell phone, then it can build off of a stream of virtual visits.

McLaren's clinic-to-clinic telehealth program launched in late 2018 and only peaked at 951 visits in March 2020. However, following the emergence of COVID-19, McLaren provided 19,100 visits in April, and 18,400 visits in May. The organization's most recently available data from September showed telehealth visits were down to just over 6,000 during the month but still well above pre-pandemic highs. 

Buxton said that McLaren's clinic-to-clinic telehealth operations in 2020 resulted in $6.4 million revenue generation, after expenses, based on virtual care reimbursements alone. 

Related: Digital Medicine: How It's Shaping the Future of Healthcare

While the positive financials related to the organization's digital health offerings has been rewarding, Buxton said the focus has always been on delivering timely and meaningful care to patients.

"My position has always been, 'If you take care of your patient, the bottom line takes care of itself,' " Buxton said. "When we rolled this [program] out, our focus wasn't on how much money we were going to make; our focus was on how we were going to take care of these patients and link them into our system. What we found was a great return on investment and we took great care of our patients."

Virtual care expansion opportunities

Given the success McLaren has had establishing its presence in the telehealth space, Buxton said that the system sees opportunity for expansion in the future.

Most of the services offered at the clinic-to-clinic locations have been lab work as well as point-of-care and COVID-19 testing, according to Buxton.

Currently, the clinic-to-clinic specialty programs include psychiatry and behavioral health, perinatal/neonatology, pediatrics, dermatology, sleep medicine, rheumatology, and ENT.

Some potential program expansions include employers, school programs, prison programs, ICU/NICU, and sitter programs.

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"We're going to continue to see more virtual care services at all levels, and I expect partnerships to be able to drive that," Buxton said.

He added that McLaren wants to be out ahead of millennials and younger patients who have more immediate care expectations compared to older populations. Utilizing technology to adapt to changing consumers in the healthcare space is an important aspect to achieving this, he said.

Buxton's advice to health system executives who want to set up a telehealth program would be to partner with other organizations that have the technology and expertise to help. He added that a positive development for McLaren is the fact that as telehealth has gone mainstream, the virtual care offerings the organization have rolled out have become "codified" and "supported by the open market."

"If you look at Amwell, Teladoc, or other companies springing up doing [these partnerships], my position is you can partner with [organizations,] white label some of this, and push it out," Buxton said. "I think at the end of the day, there's going to be more and more push for this. I think people that haven't made the decision to jump in the water or partner with somebody are going to be left scratching their heads wondering where their patients went."

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

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