Market Innovation Center

Telehealth Industry Trends 2016

Ready-to-Use Presentation Slides
 2
Road Map

1 Industry Overview

2 Market Forces Influencing Adoption

3 Evaluating Telehealth Investments

©2016 The Advisory Board Company • advisory.com

 3

Industry Overview
• Defining “Telehealth”
• Industry Snapshots
• Adoption Trends

©2016 The Advisory Board Company • advisory.com

 4

Telehealth: Untangling the Terminology

Key Terms and How They Relate to Telehealth Technologies
Defining “Telehealth”
The use of medical information exchanged from one site to another via
electronic communications to improve a patient’s clinical health status.
- American Telemedicine Association

Why invest in telehealth? What are the applications? How is telehealth offered?
Use Cases Modalities Platforms

Telephonic
Diagnosis and Real-time
Treatment Virtual Visits
Web-based

Mobile,
Professional Remote Patient Smart Device
Consultation Monitoring
Kiosk

Monitoring and Asynchronous

Store-and-Forward
Bluetooth-Enabled
Care Coordination
Peripheral Devices

©2016 The Advisory Board Company • advisory.com Source: Market Innovation Center research and analysis.
 5

Modalities Differ by Recipient and Timing of Service

Typically, Synchronous Provider-to-Patient Is Most Favorably Reimbursed

Intended Recipient

Provider-to-Patient Provider-to-Provider
1 2
Common applications: Common applications:
• Virtual primary care • Telestroke
Timing of Interaction

• Virtual urgent care • TeleICU

Synchronous
(real time) • Virtual pre- and post-op • Telepsychiatry

4 3

Common applications: Common applications:

• Secure e-messaging • Teleradiology
• Remote patient monitoring • Telepharmacy
Asynchronous
(time lag) • Wearables (e.g., Fitbit) • Teledermatology

©2016 The Advisory Board Company • advisory.com Source: Market Innovation Center research and analysis.
 Industry Snapshot: #1. Synchronous, Provider-to-Patient 6

Direct-to-Consumer Virtual Visits

Convenient, On-Demand Access to Primary and Urgent Care Services

Strategic Popular
Enhanced rural
Benefit access Vendors
“2015 was the year that
virtual visits went from an Teladoc
Improved patient
‘up-and-coming trend’ to a convenience
‘stay in business American Well
application’ for payers New patient
and pharmacy chains.” MDLive
capture/retention of
existing patients
Doctor on Demand
Dr. Joseph Kvedar
Partners Connected Health Expanded PCP
capacity

Clinical Applications

Episodic Urgent Chronic Disease Behavioral

Primary Care Care Management Health

Source: Tahir D, “Telehealth services surging despite questions about value,” Modern
©2016 The Advisory Board Company • advisory.com Healthcare, February 2015; Market Innovation Center research and analysis.
 Industry Snapshot: #2. Synchronous, Provider-to-Provider 7

Real-Time Virtual Specialist Consults

Access to Specialist Expertise for Diagnosis and Treatment Planning

Strategic Popular
Improved access
Benefit in communities with Vendors
“These online communities
persistent provider
give rural physicians shortages Avizia
access to expertise and a
sounding board they didn’t Improved patient Vidyo
have in the past, which experience from
also reduces the convenient Vsee
isolation factor.” appointments
Zoom
Ken Simone, DO Reductions in
Family medicine physician avoidable patient
transfers

Clinical Applications

Telepsychiatry Telestroke TeleICU

Source: Hume R, Health Facilities Management, February 2016, available at http://www.hfmmagazine.com/display/HFM-news-article.dhtml?dcrPath

©2016 The Advisory Board Company • advisory.com =/templatedata/HF_Common/NewsArticle/data/HFM/Magazine/2016/feb/hfm-telemedicine-and-facility-design. Market Innovation Center research and analysis.
 Industry Snapshot: #3. Asynchronous, Provider-to-Provider 8

Store-and-Forward Information Exchange

Messaging Services Enable Transfer of Data, Images

Strategic Popular
Benefit Vendors
“Asynchronous care Extended hours of
specialist support
focuses the clinician’s AMD Global
interaction to the most Telemedicine
Expanded provider
essential elements, capacity GlobalMed
allowing batching of the
iClickCare
clinician’s time to capture Improved patient
scale economies.” experience via Second Opinion
reduced wait in Telemedicine
access to care
Becker’s Hospital Review

Clinical Applications

Dermatology Radiology Retinopathy

Source: Carlin, P. and Regan, K. “Telemedicine: A Growing Market,” MD Buyline, August 2014.
©2016 The Advisory Board Company • advisory.com http://www.mdbuyline.com/blog/telemedicine-growing-market/; Market Innovation Center research and analysis.
 Industry Snapshot: #4. Asynchronous, Patient-to-Provider 9

Secure Messaging Tools

Technology-Mediated Access to Physicians Drives Patient Engagement

Strategic Popular
Enhanced patient
Benefit convenience Vendors
“When you use a prompt
like texting or emailing, EMR vendors
Expanded patient
you make the patient an access to primary
intimate partner in the TigerText
care services
health care process.”
Imprivata
Streamlined
Dr. Charles Edmiston medication
Medical College of Wisconsin management Voalte

Operational Doc Halo

efficiencies

Clinical Applications

Wellness Routine Patient Chronic Disease Medication

Coaching Follow-up Management Management

Source: Monegain, B. “KLAS names top secure messaging tools,” Healthcare IT News.
October 2015. http://www.healthcareitnews.com/news/tigertext-leads-messaging-market-
©2016 The Advisory Board Company • advisory.com now; Market Innovation Center research and analysis.
 10

Remote Patient Monitoring Devices

Leveraging Data to Prevent Chronic Disease Exacerbation

Strategic Popular
Benefit Vendors
Reduced ED Honeywell
utilization, patient HomMed
readmissions
$46B McKesson
Improved patient Medtronic Care
Estimated RPM
management of Management
market size in 2017 chronic, comorbid Services
conditions
Philips Healthcare
Reductions in patient ScottCare
mortality
TouchPoint Care

Clinical Applications

Heart Failure COPD Diabetes

Source: “Report: mHealth and Home Monitoring,” Berg Insight. December 2015. http://www.berginsight.com/ReportPDF/ProductSheet/bi-mhealth7-ps.pdf;
Godfrey, J. et. Al., “Report: State of the App Economy, 4th Edition,” ACT | The App Association, January 2016. http://actonline.org/wp-
content/uploads/2016_State_of_App_Economy.pdf; Carlin, P. and Regan, K. “Telemedicine: A Growing Market,” MD Buyline, August 2014.
©2016 The Advisory Board Company • advisory.com http://www.mdbuyline.com/blog/telemedicine-growing-market/; Market Innovation Center research and analysis.
 11

Adoption of Wearables Stalled by Inconsistent Use

Outlook Dependent on Consistent Patient-Provider Communication

Market Size for Smart Wearables, by Year

USD, billion Popular Vendors
$41.3
• Fitbit
$27.9 • Apple HealthKit

$16.3 • Samsung S Health

$11.0 • Philips
$7.2
$3.9
• GE Healthcare
• Siemens
2015 2016 2017 2018 2019 2020
”
The Dirty Secret of Wearables
“More than half of U.S. consumers who have owned a modern activity tracker no longer use it.
A third of U.S. consumers who have owned one stopped using the device within six months of
receiving it. Consumers stop wearing devices that are too conspicuous or uncomfortable or that
need to be removed frequently.”
Endeavour Partners

Sources: Endeavour Partners, September 2013, Inside Wearables,

http://endeavourpartners.net/assets/Endeavour-Partners-Wearables-White-Paper-20141.pdf;
PriceWaterhouseCoopers, “The Wearable Future,” October 2014,
http://www.pwc.com/us/en/industry/entertainment-media/publications/consumer-intelligence-series/index.jhtml;
©2016 The Advisory Board Company • advisory.com Soreon Research, “Smart Wearables in Healthcare”; Market Innovation Center research and analysis.
 12

The Time Is Ripe for Virtual Care

Projections Agree on Growth, But How Aggressive?

Year-Over-Year Medicare Estimated U.S. Growth in

Reimbursement for Telehealth Services1 Virtual Consults2 5-YR
In millions of dollars Millions of Visits Growth
20.0
$17.6
26.9 62%

15.0 21.5 48%

16.6
604% Growth 14.5

10.0
2.1 5.4 157%

5.0 2015 2020

$2.5
Total
PCP Visits
0.0
Specialty Consults

1) CMS data.
2) 2015 HIS Analytics report.
©2016 The Advisory Board Company • advisory.com
Sources: Herman B, “Virtual reality: More insurers are embracing telehealth,” Modern Healthcare, February 2016, available at:
http://www.modernhealthcare.com/article/20160220/MAGAZINE/302209980; ”Global Telemedicine Market – Growth, Trends and Forecasts (2015-
2020),” Mordor Intelligence, http://www.mordorintelligence.com/industry-reports/global-telemedicine-market-industry, December 2015; Japsen,
Bruce, “Doctors’ Virtual Consults with Patients to Double by 2020,” Forbes, http://www.forbes.com/sites/brucejapsen/2015/08/09/as-telehealth-
booms-doctor-video-consults-to-double-by-2020/#2d4da3675d66, August 2015; Market Innovation Center research and analysis.
 13

Planners Often Coordinate Telehealth Initiatives

Member-Driven Analysis from Advisory Board Telehealth Inquiries

Telehealth Questions Submitted to ABC by Role of Asker

n=237
Telehealth-Specific Role
Job Description for
4% “Director of Telehealth”
11%
IT Professionals

Clinical • Ownership and oversight of

Leaders cross-service line telehealth
22% 63% development initiatives
Strategic • Management of exploratory
Planners process for new uses from grant
pursuit to pilot to scaling
• Coordination with leaders across
strategic planning, clinical roles,
IT, and marketing in developing
new telehealth initiatives
35% 36%
Percent of clinical leader Percent of planner questions
questions focused on focus on telehealth general
specific use-cases education
1) Figures draw from analysis of Advisory Board Expert
Center responses from Jan. 2014 - March 2015.
2) Direct-to-patient includes both synchronous and
asynchronous remote patient monitoring.

©2016 The Advisory Board Company • advisory.com Sources: Market Innovation Center interviews and analysis.
 14

What Your Peers Are Asking About Telehealth

Direct-to-Patient Primary Care Eclipses Urgency of Specialty Consults

What Telehealth Applications are What Modality are Members

Members Asking About?1 Most Interested In? 1
n=141 n=141
Remote patient monitoring
(RPM) inquiries exceed Physician-to-
primary care across Physician
16%
specialty use-cases
Direct-to-
Primary Patient2
Care 84%
28%
Stroke
CV eICU 11% Psychiatry
18% 16% 11% Pediatrics
9% Dermatology
4%
Women's
Health
1%

1) Figures draw from analysis of Advisory Board Expert

Center responses from Jan. 2014 - March 2015.
2) Direct-to-patient includes both synchronous and
asynchronous remote patient monitoring.

©2016 The Advisory Board Company • advisory.com Sources: Market Innovation Center interviews and analysis.
 15

Adoption of Telehealth Varies by Market

State Policies Exert Greatest Influence on Telehealth Growth
Predictors of Virtual Visit Availability

State Policy Market Competition Consumer Preferences

• Medicaid coverage and
reimbursement for telehealth
• Commercial parity legislation
• Non-stringent licensure
and practice standards for
virtual care
• Presence of third-party vendor
or payer/employer offering
• Vendor affiliations with a health
system
• Proximity to teaching hospitals
• Persistent provider shortages
• High local average wait times
for an appointment with a
primary care physician
• Patient demographics with
high proportion of young
professionals

Featured Telehealth Resource

Market Shock Report: Virtual Visit Adoption
Interactive and customizable report with tools to estimate the likelihood of
virtual visit adoption in a given market, model the potential impacts to your
business, and develop a plan to prepare for potential disruption

©2016 The Advisory Board Company • advisory.com

 16

Market Forces Influencing Adoption

• Consumers
• Vendors
• Adopters
• Payers
• Policy-Makers

©2016 The Advisory Board Company • advisory.com

 17

Stakeholder Groups Influence Telehealth Adoption

Telehealth Strategic Planning Largely Dependent on External Factors

Major External Players Influencing Adoption

z z z z

Consumers Vendors Adopters Payers Legislators

Shifting needs Developing and Providers, Determining Establishing
& preferences promoting employers coverage terms licensing and
to favor virtual technological seeking to manage cost regulatory
care delivery advancements competitive of care standards
advantage

©2016 The Advisory Board Company • advisory.com Source: Market Innovation Center research and analysis.
 #1. Consumers 18

Current Capacity Insufficient to Meet Patient Needs

Demographics and Health of the US Population Driving Need for Care

20% 77% 85% 30%

U.S. adults living U.S. adults ages Expected U.S. Average increase in
with two or more 65+ with at least population growth cost per case for
chronic health two chronic among individuals 65+ individuals with two
conditions conditions between 2000 and 2030 chronic conditions

Health Care Service Industry Has Significant Gaps

20% 19.5 55%

Percent of patients living in Average wait time in days for Percent of patients
areas with insufficient appointment to family receiving recommended
primary care doctors practice nationwide preventive care

©2016 The Advisory Board Company • advisory.com
Sources: Fox S & Duggan M, “Part One: Who Lives with Chronic Conditions,” Pew Research Center, November 2013. U.S. Department of Health and
Human Services Aging Administration. “Aging Statistics, ” 2010, www.aoa.gov/AoARoot/Aging_Statistics/index.aspx HHS, “Health Insurance
Marketplace: Summary Enrollment Report for the Initial Annual Open Enrollment Period,” May 1, 2014; , “Hospital Utilization, Costs, and Mortality for
Adults With Multiple Chronic Conditions, Nationwide Inpatient Sample, 2009,” available at: /www.cdc.gov/pcd/issues/2013/pdf/12_0292.pdf; Merritt
Hawkins, “Physician Appointment Wait Times and Medicaid and Medicare Acceptance Rates,” 2014, accessed March 18, 2015, available at:
http://www.merritthawkins.com/uploadedFiles/MerrittHawkings/Surveys/mha2014waitsurvPDF.pdf; Market Innovation Center research and analysis.
 19

Consumers Increasingly Prefer “On-Demand” Care

Survey Finds Email Visits Preferred to Clinic Near Errands or Work
Preference for Location of Services

Clinic location Clinic located Emailing provider Clinic located

near work near errands with symptoms near the home

Increasing Consumer Preference

Young, Wealthy, Busy—Strongest Potential Telehealth Targets1

54% 49% 53%

Of 18-29 yrs olds Of those making Of those working
>$71K per year >35 hours per week

1) Based on proportions of respondents interested in telehealth.

©2016 The Advisory Board Company • advisory.com Source: 2014 Primary Care Consumer Choice Survey, Market Innovation Center research and analysis.
 20

Patients Favor Accessibility Over Type of Interaction

Surveys Show Strong Likelihood of Patients Shifting Care to Virtual

First, Willingness Then, Preference Eventually, Shift

72% 67% 20% Percentage of total

potential primary/
Consumers would see Patients prefer email urgent care visits
a doctor via video over webcam eligible for virtual care¹

76% 70% 11% Patients aged 19–34

who would leave their
Patients prioritize access to Patients prefer an online PCP in favor of one
care over need for human visit to get prescriptions who offers virtual visits
interaction with providers

• Many patients aren’t looking for
the same type of intimate
doctor-patient relationship of old
• Access to care is top concern
1) Calculated using CDC National Ambulatory Care Survey
volumes by reason for visit
©2016 The Advisory Board Company • advisory.com
Key
Key Takeaways
Takeaways
• Virtual interactions are preferable • Currently, about 1 in 5
for low-acuity episodes outpatient visits could be
• Patients are looking for the fastest, done online
easiest access point– no special • Millennial patients are
skills or equipment needed starting to actively choose
tech-savvy providers
Source: Pennic J, “72% of Consumers Are Willing to See a Doctor Via Telehealth Video Conferencing,” HIT Consultant, December 11,
2013; American Hospital Association “Trendwatch”: The Promise of Telehealth for Hospitals, Health Systems and Their Communities”,
January 2015; American Well, “Telehealth Index: 2015 Consumer Survey,” 2015; Market Innovation Center research and analysis.
 #2. Vendors 21

Technology Getting Faster, More Advanced

Vendors Provide Differing Levels of Telehealth Support, Functionalities
IT Infrastructure
• Broadband wired network
• Network management system
• Integrated enterprise EMR

Telemedicine Equipment
• Computers, laptops, tablets, or mobile carts
• Audiovisual equipment (e.g., webcams,
videoconference software)
• Digital enabled medical equipment, peripheral
devices (e.g., otoscopes, stethoscopes, scales)

Data Management Systems

• Expanded memory and processing capabilities
• Data mapping across multiple sources
• Analytic reporting (e.g., geospatial tracking)

Staffing and Personnel Support

• Technical expertise for deployed technologies
• Help desk/support hotline
• Administrative support for licensing, credentialing

©2016 The Advisory Board Company • advisory.com Source: Market Innovation Center research and analysis.
 #3. Adopters 22

Many Players Vying for Consumer Engagement

Landscape Shaped by Interactions between Vendors and Adopters

Vendors

Retailers

18.4%
Projected growth
through 2020 in Employers
global market for & Payers
telehealth +2K
technologies1
Retail clinic sites Providers
in 43 states and
the District of
Columbia2 74%
Employers
expecting to offer
Direct-to-Consumer
telehealth in
20163 57% Service Offerings
Physicians willing
to see patients
1) FierceHealthIT, “Rapid Growth Projected for Global Telemedicine Market,” May 2015 via video4
2) A&M, “Retail Healthcare: Growing Trend for Healthcare Service Delivery”
3) Emerman, E. “Health Care Benefits Cost Increases to Hold Steady in 2016, National
Business Group on Health Survey Finds,” National Business Group on Health. August
2015. American Well, “Telehealth Index: 2015 Physician Survey Insights”
Sources: McCann E, “Telehealth Sees Explosive Growth,” Healthcare
©2016 The Advisory Board Company • advisory.com IT News, June 2013’ Market Innovation Center research and analysis.
 23

Clinicians Express Concerns About Workload, Utility

Fears are Beyond Low Reimbursement
Provider Concerns Regarding Telehealth

Data Overload Liability

“ “
With the prevalent use of If the data fell into the wrong
telemedicine, utilizing wearables hands it could expose the
and sensors, we have to figure hospital to privacy violations…Or
out which data elements are what if an ambulance chaser
crucial for the patient and for the claims we should have taken
clinicians.” action for a patient who stopped
walking daily?”

Usefulness of Data Doctor-Patient Relationship

“ It’s just one more data set they

have to deal with, and they’re
already wrestling with lots of data
every day.”
“ For many doctors, telemedicine
seems to depersonalize the
relationship and sabotage trust.”

©2016 The Advisory Board Company • advisory.com
Source: Friedberg, M et al. “Factors Affecting Physician Professional Satisfaction and Their Implications for Patient Care, Health Systems,
and Health Policy,” RAND/AMA 2013 Physician Satisfaction Study, http://www.rand.org/pubs/research_reports/RR439.html; Sullivan, M.
“Guess What? Doctors Don’t Care About Your FitBit Data,” Venture Beat, August 2014, http://venturebeat.com/2014/08/15/guess-what-
doctors-dont-care-about-your-fitbit-data/; Chen, P. “Are Doctors Ready for Virtual Visits?” The New York Times, January, 2010,
http://www.nytimes.com/2010/01/07/health/07chen.html?_r=0; Market Innovation Center research and analysis.
 #4. Payers
Virtual Care Reimbursement Shift Quickening
Outlook for Commercial
Reimbursement
• There are no
consistent standards
that govern private
commercial payers
• As of January 2016,
32 states and DC
mandate insurance
companies to provide
coverage for
telehealth services,
but with varying
requirements and
reimbursement rates.
• Some payers are
partnering with non-
health system
innovators to offer
covered virtual
services for select
groups of
beneficiaries.
©2016 The Advisory Board Company • advisory.com
24
Sampling of Commercial Insurers Paying for Telehealth
• Covering real-time video, telephonic, • Individual state Blues plans
and secure chat visits for non-urgent partner with variety of vendors, like
care consultations American Well
• Scaled across 46 states; doctor visits • National Labor Office alliance with
and prescriptions available in CA Teladoc
• Partners with American Well’s • Adds Teladoc services to benefits
LiveHealth Online platform plans for labor trust funds, labor
unions, and independent BCBS
companies served by NLO
• Covers virtual visits for enrollees in • Offers telehealth services to
self-funded employer health plans with patients on multiple
access in 47 states and DC platforms, including patient
portal and mobile app
• Expanding to employer-sponsored and
individual plan participants in 2016 • Invested $10M in Vidyo
telehealth platform in
• Partners with Doctor on Demand and
December 2015
American Well
Source: Center for Connected Health Policy, http://cchpca.org/telehealth-policy; American Action Forum, http://americanactionforum.org/insights/curbing-
the-provider-shortage-more-coverage-for-telehealth-services; Market Innovation Center research and analysis.
 25

Examining CMS Coverage Requirements

Specific Criteria Must be Satisfied to Qualify for Reimbursement
Core Eligibility Requirements for CMS Reimbursement

Geographic Location Type of Health Type of Institution

1 2
of Originating Site
• Must be provided to an
eligible beneficiary in an
eligible site
• Site must be located in:
1. A Health Professional
Shortage Area outside
of a Metropolitan
Statistical Area
2. A rural census tract
(even within a MSA)
3. A county outside of
an MSA
3
Provider at Distant Site for Originating Site
• Physician • Office of a physician or
practitioner
• Nurse practitioner
• Hospital
• Physician assistant
• Critical access hospitals
• Nurse midwife
• Rural health clinic
• Clinical nurse specialist
• Federally Qualified Health
• Clinical psychologist and
Centers (FQHCs)
clinical social worker
• Skilled nursing facility
• Certified registered nurse
anesthetist • Hospital-based dialysis center
• Registered dietitian or • Community mental
nutrition professional health center

Are You Eligible?

Visit the HRSA “Medicare Telehealth Payment Eligibility Analyzer” website.

Sources: “Medicare Telehealth Payment Eligibility Analyzer,” U.S. Department of Health and Human Resources,
©2016 The Advisory Board Company • advisory.com http://datawarehouse.hrsa.gov/telehealthAdvisor/telehealthEligibility.aspx; Market Innovation Center research and analysis.
 #5. Legislators 26

Policy & Reimbursement Support Varies by State

Medicaid Coverage and Practice Standards Lead to Uneven Adoption
LEVEL OF STATE SUPPORT

Good to Excellent

Average

Fair to Poor
CRITERIA

Medicaid Commercial Geographic & Licensure Patient Informed Prescribing Care

Reimbursement Reimbursement Patient Setting & Eligible Consent & & Practice Innovation
Requirements Practitioners Telepresenter Standards

How much does your state support telehealth?

Download your state’s policy profile here.

©2016 The Advisory Board Company • advisory.com Source: Market Innovation Center research and analysis.
 27

Medicaid and Commercial Payer Rules Differ

Some States More Supportive by Removing Restrictions to Payment

Eligible Setting Type of Commercial Payer-Led

Technologies Requirements Service Parity Laws Programs
• Many states cover • Type of setting • Some states limit • The majority of • Individual payers
two-way audio and location of the services for states have may choose to
and video patient at time of which they offer commercial include telehealth
encounters encounter reimbursement to parity legislation services in
chronic disease or in place benefit packages
• Most states do not • The most
behavioral/mental regardless of
include store and supportive states • State statute
health state laws
forward in their have no requiring
definitions of geographic • Many states limit commercial • Some payers
telehealth requirements for reimbursement to payers to offer their own
reimbursement teleradiology or reimburse for telehealth
• Some states
emergency eligible services or
cover remote • Some states limit
services telehealth partner with
patient monitoring the site where the
services at the vendors (e.g.,
or home health, patient may be • Most states limit
same rate as in- United
usually for specific located to clinics the types of
person services HealthCare &
conditions like or schools providers that are
MDLive)
CHF, COPD, or eligible to conduct
• Few states allow
end-stage renal specific services
the home as an
disease
eligible patient
site

©2016 The Advisory Board Company • advisory.com Source: Market Innovation Center research and analysis.

Provider Requirements for Practicing Telemedicine
Reimbursement Contingent on the “Who” and “How” of Provider Practice
Eligible Practitioners
• Type of practitioner allowed to see
patients via telemedicine
• Most states include MD/DO, PA, and NP
as eligible
• Supportive states also include specialty
practitioners (e.g., nurse midwives) or
non-clinical practitioners (e.g., speech
pathologists)
Informed Consent Procedure
• Manner of gaining patient’s specific consent to
have encounter via telemedicine
• Most states require written and oral informed
consent as well as patient education
• Supportive states allow multiple methods of
gaining consent
©2016 The Advisory Board Company • advisory.com
28
Licensure Requirements
• Licensure required to practice across state
lines
• Many states require a full state license to
practice telemedicine with patients located in
that state
• Supportive states provide special
telemedicine licenses, nearby state
reciprocity, or exemptions for emergency care
Practice Standards
• Requirements for the practice of medicine via
virtual means
• Most states do not require a separate set of
practice requirements for telemedicine
• Supportive states allow patient-physician
relationship to be established via telemedicine
Source: Market Innovation Center research and analysis.
 29

Telemedicine in Next-Generation ACOs

Many Calling 2016 “the Year of Telehealth and ACOs”

• Only 27% of ACOs achieved

enough savings and quality
improvements for financial
incentives
• Only 20% of ACOs currently use
telemedicine services

2015 MSSP Rule ACO Struggles Next Generation ACO Model

• Encouraged ACOs to use • New model tests beneficiary

telemedicine to achieve care incentives for seeking care at
coordination and cost savings Next-Gen. providers, including
increased availability of telehealth
• Protected telemedicine under
services
fraud and abuse waiver
• Shows CMS support of
telemedicine and will allow
gathering of evidence on benefits

Source: Lacktman, Nate. “2016 Will be the Year of Telemedicine and ACOs,” Health Data Management, December 21, 2015,
http://www.healthdatamanagement.com/news/2016-will-be-the-year-of-telemedicine-and-ACOs-51741-1.html; Wicklund, Eric. “Telemedicine
a Key Component of Next-Generation ACOs,” mHealth Intelligence, January 13, 2016, http://mhealthintelligence.com/news/telemedicine-a-
©2016 The Advisory Board Company • advisory.com key-component-of-next-generation-acos. Market Innovation Center research and analysis.

CMS CY2016 Reimbursement Updates
Proposed Rule Adds Procedures to List of Covered Telehealth Services
Services Affected by Rule
Type of Interaction
Practitioners and Services
Geographic Service Area
Chronic Care Management
©2016 The Advisory Board Company • advisory.com
2015 Expansion of Service
Wellness visits are covered as long
as there is an existing relationship
between the patient and physician;
the relationship can be initiated via a
virtual visit
Psychoanalysis, family psychotherapy
(both with and without the patient
present), and prolonged service
Payments allowed for patients in rural
census tracts even if those tracks are
within metropolitan statistical areas
CMS will reimburse providers for
furnishing specific non-face-to-face
services to qualified beneficiaries
over a calendar month
Source: Center for Medicare and Medicaid Services CY2015 Physician Fee Schedule
Proposed Rule, 42 CFR 410; Market Innovation Center research and analysis.
30
2016 Updates
Two new codes added to
reimburse for prolonged inpatient
or observation care
Addition of certified nurse
anesthetists to the list of
qualified telehealth providers
Comprehensive Care for Joint
Replacement (CCJR) model
removes geographic restrictions
for telehealth for hip and knee
surgery care coordination
Four codes added for services
related to home dialysis for patients
with end-stage renal disease
 31

Legislation to Watch
State Bills 8 of the 18 states that do not currently have parity laws are considering
them for the 2016 session; other states will work to remove restrictions
on practice and patient setting

Licensure Compacts expedite the licensure process and increase the portability of
Compacts medical licenses across participating state lines; 12 states already
participate and 12 more are considering

Congressional TELE-MED Act seeks to permit Medicare providers to practice telemedicine

Bills across state lines; Telehealth Innovation and Improvement Act would
require CMMI¹ to test effects of telehealth on cost and efficacy

MedPAC If Medicare Payment Advisory Commission supports rulemaking to

increase Medicare coverage for telehealth, Congressional Budget Office
might conduct formal review of financial impacts

Quasi- Accreditation programs like American Telemedicine Association and

Regulatory URAC promulgate standards for virtual care implementation; payers
continue to invest more in alternative payment models

1) Center for Medicare and Medicaid Innovation.

©2016 The Advisory Board Company • advisory.com Source: Market Innovation Center research and analysis.
 32

Evaluating Telehealth Investments

• Metric Selection
• Value Proposition
• Prioritization Exercise

©2016 The Advisory Board Company • advisory.com

 33

Not All Benefits of Telehealth Are Easily Quantifiable

Improved Strategic Positioning Is a Key Investment Selection Factor

Considerations for Growth

ROI METRICS

Improve financial sustainability

Direct revenue from Indirect revenue Cost avoidance
of care through new revenue
reimbursements by from adding new from replacing in-
streams, operational cost
payers, self-pay, and patients to panel person encounters
management and avoiding
contract value and patient and avoiding
unnecessary costs.
retention unnecessary care

VALUE METRICS

Compete for market share

through payer contracts and
Access for patients by Clinical quality Improved patient
patient share by appealing to
offering new sites or improvements from outcomes and
preferences for timely, high-
opening capacity for in sustained connections experience due to
quality, patient-centered care.
person appointments with patients patient activation

©2016 The Advisory Board Company • advisory.com Source: Market Innovation Center research and analysis.

Strategic Benefits for Enhancing Patient Access
Recruiting New Patients
1 Expands Provider Capacity
• Boosts provider productivity through reduced
travel time, improved operational efficiencies
• Bolsters referrals of high-acuity transfers
from tertiary care organizations participating
in telehealth consults
Improves Patient Access and
2 Market Capture Opportunities
• Expands patient access to care
• Enhances patient convenience
• Pre-empts on-demand retail competition
©2016 The Advisory Board Company • advisory.com
34
Retaining Existing Patients
3 Engages Patients and Providers
• Meet patient demands for convenient care
options in the face of market disruptors
• Can connect previously unassigned patients
to a health system
• Increases access to specialist expertise
Supports Cost Management
4
• Encourages appropriate and cost-effective
utilization
• Reduces likelihood of chronic disease
exacerbations for at-risk patient populations
Source: Market Innovation Center research and analysis.
 #1. Expanding Provider Capacity 35

Virtual Care Can Optimize Cost-Effective Delivery

Lowest Acuity Care Shifted to Low Overhead Virtual Platform
Stanford Medicine ClickWell Care Virtual Visit Clinic Model Targets Time, Cost Savings
Patient Panel of 2,000 patients, 3,000 virtual visits 2015 YTD

60% • Stanford Medicine

launched virtual visits
of all follow-up visits
at PCP clinic
done virtually
• Volume: 300 virtual
visits/month
• Rationale: More
9 160 155 convenient access to
Minutes saved Hours of physician Hours of MA time- PCPs and wellness
for each virtual time saved (across saved (across 1 MA) coaches for low-
appointment1 2.2 doctors) utilizing ACO
population
• Savings may reflect
lower acuity of virtual

Cost Savings
30-40% visits

Savings on cost-per
appointment

©2016 The Advisory Board Company • advisory.com Source: Market Innovation Center research and analysis.
 #2. Improving Market Capture Opportunities 36

Urgency for On-Demand Service Varies by Market

Convenient Offering Draws New Patients, Optimizes PCP Capacity

MultiCare’s Partnership for On-Demand Care Helps Capture New Patients

Results from 5-Month Pilot, Including Patient Survey on Alternate Sites of Care

Where Patients Would Patients Served

Have Gone
• MultiCare
partnered with
New Current vendor to provide
Office Visit 46% Patients Patients on-demand visits
50% 50%
• Volume: 200-800
Urgent Care 35% virtual visits/month
• Rationale:
ER 12% Add PCP capacity by
decanting low-acuity
Other 6% 40-60% visits; exclusive vendor
Of new patients lack a current relationship aided
No Care 1.4% patient retention,
primary care physician
downstream
care capture

©2016 The Advisory Board Company • advisory.com Source: Market Innovation Center research and analysis.
 #3. Engaging Patients and Providers 37

Keep Patients Engaged Through Online Pre-Care

Wyoming Medicaid Uses Pregnancy Tracker App for High-Risk Moms

App Helps Mothers-to-Be

• Track Baby’s Development with reminders of common

milestones, sample ultrasound videos
• Avoid Common Risk Factors by listing symptoms and treatments,
suggesting when to call doctor
• Ask the Right Questions with “hot list” of common patient
questions to guide meaningful discussions with providers
• Get Answers Quickly by connecting with health plan’s call center
for quick access to in-network nurse

40% 80%

IMAGE CREDIT: DUEDATEPLUS

Medicaid patients who Monthly retention of patients
smoke and are at high through DueDatePlus
risk for low birthweight
deliveries

Source: Pai, A. “Wyoming Medicaid Taps Wildflower for Pregnancy Tracker App,” Mobihealth
©2016 The Advisory Board Company • advisory.com News, February 12, 2014; Source: Market Innovation Center research and analysis.
 #4. Support Cost Management 38

Telemonitoring Scale Encourages Self-Management

A Weighty Solution for Heart Failure Monitoring

Essentia Health’s Telemonitoring Scale Program

Epic EMR

Flow
Sheets

Readings sent via cellular

Patients selected Weight taken every
network to MCMS
based on need: day at the
platform, pass through
• Frequent HF same time—before Chart Review
analytics to determine
hospitalization eating, dressing, and
need for intervention
• Lack of social going to bathroom
support

0-3% $1M 300

30-day readmission rate 6 month savings from Number of patients in
of RPM heart failure program, based on BCBS program, of 2,200 total
patients study heart failure patients

1) Medtronic Care Management Services.

©2016 The Advisory Board Company • advisory.com Sources: Essentia Health; Market Innovation Center research and analysis.
 39

Anchor Telehealth Investments in Overarching Goals

Mapping Telehealth Investments to Each Care Setting’s Opportunities
Common Goals for Telehealth Solutions, by Setting

Primary Care OP Care ED IP Care PAC

 Improve primary  Extend clinic  Cut inappropriate  Improve availability  Bridge gaps in
care coverage coverage from admissions and or access to availability or access
specialists transfers specialist expertise to specialist expertise
 Reduce patient no-
shows  Streamline  Encourage cost-  Reduce patient LOS  Increase
information transfer effective patient ED interoperability
 Respond to retail between care utilization  Address causes of between
competition settings frequent treatment hospital/post-acute
complications care provider EMRs
 Overcome patient  Improve patient
transportation compliance with  Avoid readmission  Improve access for
barriers post-discharge care rates/penalties home-bound, geriatric
pathway patients
 Elevate  Support seamless
management of care transitions
chronic disease

©2016 The Advisory Board Company • advisory.com Source: Market Innovation Center research and analysis.
 40

Next Steps with The Advisory Board Company

Telebehavioral Health
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