Why Telehealth Needs a Different ROI

Healthcare providers won't embrace telehealth unless they're reimbursed properly. But advocates say they should be looking at more than just the cost.

With all the talk focused on AI these days, telehealth would like to remind everyone that it’s still around. And it isn’t going away.

In fact, despite announcements to the contrary, health systems and hospitals across the country are embracing telehealth to address key pain points, including access issues and workforce shortages. In many instances virtual care has become the norm, rather than the cool new concept.

“Telehealth [and] telemedicine has just exponentially grown,” says Danielle Louder, director of the Northeast Telehealth Resource Center (NETRC), part of a network of federally funded telehealth resource centers scattered across the U.S., and director of U.S. Programs at MCD Global Health. “We’re seeing more strategic, in-depth and creative approaches across the landscape, including integration of artificial intelligence and augmented reality, and are eager to continue our work with partners to advance the use and impact of telehealth across the region and beyond.”     

The NETRC, part of the National Consortium of Telehealth Resource Centers, which consists of 12 regional and two national centers, held its annual conference this week in Nashua, N.H. The three-day event, drawing close to 100 attendees, addressed some of the biggest issues in telehealth, including state and federal regulation, innovative use cases, the growth of AI and remote patient monitoring (RPM), and finding the right business case for scalability and sustainability.

And that’s where things get interesting.

Telehealth had its moment in the spotlight with the COVID-19 pandemic, when as much as 70% of healthcare encounters were done virtually to curtail the spread of the virus. Those numbers dropped after the pandemic as patients sought to return to their doctor’s office, but while some pundits claimed this would end the telehealth experiment for good, most health systems and hospitals still see the value of offering virtual care alongside in-person care.

The challenge lies in understanding the value of virtual care—and explaining it to both hesitant providers and skeptic payers.

Jason Goldwater, president and CEO of Laurel Health Advisors, which has conducted several federal and state studies focused on telehealth value (including an ongoing analysis for the state of Connecticut), says healthcare providers won’t fully embrace telehealth unless they’re paid for the virtual visit at the same rate as they’re paid for in-person care. And insurers, especially private payers, aren’t embracing payment parity.

But Goldwater argues that telehealth has a value that goes beyond reimbursement, and both providers and payers need to understand what he calls social ROI.

“Traditional ROI metrics undervalue what telehealth can really provide,” he said during a presentation at the NETRC meeting. “People should be looking at the full spectrum of benefits.”

For example, he said, telehealth visits improve access to care, enabling patients to meet with providers at the time and place or their choosing. This means fewer missed or canceled appointments, which in turn means better adherence to care management, which cuts down on emergency and adverse health events and improved long-term health and wellness. In addition, telehealth leads to a much higher patient satisfaction rate, which in turn can lead to improved medication adherence.

In addition, a telehealth platform might reduce stress on providers by enabling them to shift from in-person to virtual appointments, creating a daily workflow that doesn’t wear them down. This in turn will improve care outcomes and reduce the operational costs tied to a stressed workforce, including time off and departures.

Telehealth can also enable providers to connect more easily with specialists and other services, reducing the need for multiple appointments for patients and improving care management and outcomes.

And finally, telehealth reduces the environmental impacts caused by travel, giving patients the opportunity to receive care from home and even giving providers a chance to work from their homes on occasion.

Goldwater says these factors aren’t often included in the ROI of a telehealth program because healthcare executives and payers are too often focused on cost.

He recommends that healthcare leaders take the following steps:

• Leverage stakeholders to support a good telehealth strategy.
• Invest in a data infrastructure to give providers both the information they need to improve care and decision-makers the data they need to prove ROI.
• Focus on the long-term benefits of telehealth rather than short-term ROI.
• Align incentives to support providers, patients and payers.
• Leverage technology to create an effective platform.

Beyond that, he says, healthcare leaders need to create a platform for evaluating telehealth programs that factors in social ROI, and that means creating standardized valuation frameworks and assigning monetary values for all SROI benefits.

For example, a program that improves medication adherence might show the cost to the health system when patients aren’t taking their medications, while a program that reduces provider stress and burnout will show the cost to the health system in increased time off and vacation requests and filling positions because of turnover.