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The Painfully Slow Move to Online Services

by John Moore | February 06, 2008

This week, the LA Times has an interesting article on how major insurers Cigna and Aetna will be reimbursing physicians for providing online consultations.  It is encouraging to see these major payers step-up and support such practices. Other payers will likely follow as this could become a key service differentiator that would be attractive not only to just patients and physicians, but more importantly to these payer’s customers – employers.

Employers are aggressively looking to reign in healthcare costs, which continue to grow faster than just about any other cost an employer may have. This has led to a dramatic up-tick in interest by employers for employee health and wellness solutions including among others, PHRs. Some forward-thinking employers, however, are looking beyond just healthcare insurance costs. For example, enabling an employee to meet with their doctor online from the comfort (I use that term loosely) of their office at work rather than having to spend an hour or more driving to and from a doctor’s office is a nice productivity boost for that employer.

Taking it to the next level of embedding such physician-patient communication/consultation within the context of an employee’s PHR just adds to the value proposition (of course the PHR is absolutely secure and the employer has absolutely no access to identifiable employee data contained therein). The value here is that not only does the employee/patient share their PHR with a physician online but together, they can go over such things as recent lab results, review images, discuss action plans and keep a record of all communications right there within the PHR.

Since its inception, PHR vendor Medem has always felt that physician-patient communication was critical to the success of PHR adoption by both patients and physicians and structured their solution around that fundamental belief. In a conversation with Medem’s Chief Medical Office, Henry DesPhillips, last week as part or our PHR Research Study, DePhillips’s stated that they are seeing increasing interest for their solution from payers.  Medem traditionally has  marketed and sold their solution almost exclusively to physicians, pitching it as a platform physicians could use to  improve patient services and retention.  In light of the rapid changes now occurring among payers such as reimbursing physicians for online consultations, Medem expanded its marketing efforts in early 2007 directly targeting payers.  They are getting some traction in the market having landed Medical Mutual of Ohio in 2007. If more payers follow Aetna and Cigna’s lead, Medem is in a good position to experience some healthy growth as they are one of the few independent PHRs now in the market with strong patient-physician communications capabilities.  While Medem certainly has an early jump on its competitors, many who I’ve spoken with are currently developing similar capabilities that they plan to release in 2008.

Another, slightly different example is Kaiser-Permanente. Awhile back I did a post on their big PHR roll-out, though I was not all that enthused at the time as I am not a big fan of tethered PHR solutions. Despite my own reservations, Kaiser is seeing very strong adoption among its membership, upwards of 50,000 new users/month. And what is one of the key features of this PHR that all those customers are most excited about? Yup, online consultations and appointment scheduling with their doctor(s).  (Note: At the top of that LA Times article in a picture of a Kaiser physician providing an online consultation.)

To date, I have not come across any independent studies (if you know of any please enlighten me) that point to the efficacy of online consultations, be it improved outcomes, better quality of care, lower total costs of care, etc. Regardless, intuitively I believe there are significant savings here. Unfortunately, as that LA Times article points out, the big payer elephant in the room is the federal government (Medicare) who are loathed to adopt anything new and have no plans to adopt online consultation at this time.

This is unfortunate as the most recent budget proposal by President Bush looks to simple, across the board cuts in Medicare reimbursements rather than how technologies such as this may contribute to lowering the total costs of care delivery but that is another story…

4 responses to “The Painfully Slow Move to Online Services”

  1. […] and physicians, but more importantly to these payer’s their customers – the employers.” Article John, Chilmark Research, 6 February […]

  2. Avi says:

    I have come across a few studies that discuss the efficacy of online consultations. One is in the International Journal of Medical Informatics 61 (2001) pgs 229-234, entitled “EMR Telegeriatric System.” by P.M.D.S. Pallawalla and K.C. Lun. The study examined consultations done at a nursing home type facility.
    What steps do you think employers and insurers will take to monitor the efficacy of their current programs? It seems to me as if many of the insurers are running these programs on blind faith.

  3. John says:

    Thanks for the comment Avi and your your question as to what steps insurers and employers will take to monitor the efficacy of online consultations is a good one. To date, I have not heard of any pro-active efforts and not sure that we will anytime soon.

    First, employers tend to stay pretty tight-lipped about such studies/analysis as it may cross a fine line on ethics/employee privacy as it pertains to their personal healthcare. Have seen employers make “back of the envelope” type calculations on productivity losses due to employees leaving the office for a Dr’s appt, (and they are substantial) but that is about it. As for insurers, they may divulge metrics in the future, but as you put, they are going on blind faith today.

  4. […] An important feature that consumers want and increasingly physicians as both Aetna and Cigna have agreed to reimburse physicians for […]

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