As the shift toward pay-for-value and the consumerization of healthcare continue, technology plays a large role in the redesign of healthcare delivery. Three worth looking at for payers are telehealth, wearable technology, and virtual reality.
Telehealth: Becoming a mainstay
Telehealth is nothing new. However, despite the potential for telehealth to increase access to services and reduce costs, it isn’t widely available just yet. This is largely due to the fact that payments models haven’t accounted for services virtually provided to patients.
Medicare didn’t begin paying for telehealth services until 1997. Even then, the scope of coverage was limited and it has been somewhat slow to expand. Medicaid, which is managed at the state level, has been even slower to begin reimbursing providers for telehealth services. Medicaid programs in 39 state currently reimburse for telehealth services, according to the Center for Telehealth & e-Health Law. In 15 states, private and public payers are legally required to reimburse for telehealth services.
“I think the technology and our patient expectations are moving far faster than our payment policy is right now,” said Scott Armstrong, a former member of the Medicare Payment Advisory Commission (MedPAC) and CEO of Group Health Cooperative in Seattle, at a March 3 meeting of MedPAC
Utilization of telehealth services is still relatively uncommon, according to a June MedPAC report, but increasing. Outside of Medicare, private payers and retail clinics are incorporating telehealth into their health plans, according to an April report from the American Hospital Association. Aetna, Anthem and UnitedHealthcare have all incorporated telehealth coverage, primarily for primary care services, into their individual, commercial, and Medicare plans.
As a growing body of evidence points to the benefits, more providers are offering telehealth services and more payers are paying for them. However, for telehealth to take the next step, policymakers need to expand the scope of coverage.
Wearables: Still developing
There has been a lot of hype surrounding wearable technology over the past decade or so. Some market researchers predicted widespread adoption of wearables by the end of the decade. While that is unlikely to happen, wearables certain seem to have a place in healthcare and payers are figuring out exactly what to do with them.
Patients have reported a lot of excitement in using wearables to track health information. In a survey of 1,000 patients, published by consulting firm PwC in 2014, 77% of respondents said they would use a wearable to exercise, 75% would use it to track medical information, and 67% would use it to diet. If patients were able to use wearables to actually increase physical activity levels, track symptoms that might prevent emergency department admissions, or improve diets, payers would like benefit from improved outcomes delivered by a relatively inexpensive piece of technology.
Despite excitement around wearables and their potential, they face several obstacles before they become more mainstream. For instance, there isn’t a clear understanding of how patients use them. In a study that tracked progress in a weight loss program, participants using wearables actually performed worse than patients without wearables. There are also concerns around the privacy of information collected by wearables and whether patients want payers to have that information.
Payers will likely need more evidence before they can begin deploying wearables to reduce costs, but some are starting to experiment. For instance, UnitedHealthcare entered a partnership to explore the use of wearables in a workplace wellness program that will pay patients up to $1,460 per year for meeting certain physical activity levels.
Virtual reality: What’s on the horizons
There is a growing amount of interest in virtual reality as products like Oculus Rift and Google Cardboard hit the market. When it comes to healthcare, virtual reality is already being used to help train doctors and to treat and evaluate patients in clinical settings.
One area where virtual reality could make a difference is telehealth. For instance, a provider could potentially receive more health data on a patient performing a motion than with existing telehealth capabilities. Patients could also use virtual reality platforms similarly to wearables to track health information and progress.
Payers have already explored gamification to encourage overall wellness. Virtual reality offers opportunities to expand upon gamification. Although gamification is possible with other technologies, such as wearables, virtual reality could make those experiences more immersive and potentially more effective.
It is unlikely that virtual reality platforms achieve widespread use in the near term, especially with concerns over cost. However, early experiments to use virtual reality to evaluate and treat patients are seeing some success and this technology could become a tool for payers in the future.