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Selling the ROI of telehealth programs can be tough

Selling telehealth programs to a healthcare organization can be a challenge because many insurers do not cover telehealth and the ROI can be questionable.

BOSTON -- For CIOs in healthcare organizations, telehealth can be a hard sell. This may seem surprising given all the evidence that telehealth programs allow patients in rural areas to get the care they need, allow patients with chronic diseases to reduce the number of visits to the doctor or hospital, and allow patients to reach qualified care providers when their doctor's office is closed.

Despite these benefits, some healthcare organizations aren't sold on the return on investment of telehealth technologies, not to mention that very few healthcare insurers cover telehealth.

Peter Kung, system vice president of innovation and virtual health at SCL Health System based in Broomfield, Colo., and Wendy Cofran, CIO at the Natick VNA in Mass., discussed these challenges at the mHealth + Telehealth World Congress conference in Boston and offer potential approaches and strategies.

How should healthcare organizations approach the business plan and ROI of telehealth programs?

For us the return on investment is keeping [patients] out of the hospital.
Wendy CofranCIO, Natick VNA

Peter Kung: I look at it in three different [ways]. The first is leadership. You really need to understand your leadership commitment to where they're going to be going in the next couple of years. And the more capitated the move, the better your shot at this in terms of really making the difference you want to see. That for me ... was one of the main reasons ... I've been able to launch eight enterprise initiatives and that's not including the pilots. It's how much commitment is going to go down with your senior leadership. Second would be really understanding the strengths and weaknesses of your organization. You can't be all things to all people. What is the value proposition and the role you play in the community that's going to differentiate you and, not to pick on [Massachusetts General Hospital] MGH ... the thing is MGH will never be able to operate at the cost of a Walmart clinic. Believe me on that. The reason why is because they have the best. ... It may not be the lowest-cost provider and that's ok, you don't have to be all things all the time. But assessing your health system's strengths and weaknesses and where you should differentiate on your value. And the third would be, if you're new to this, how fast do you want the ROI? Because that's going to determine how big your return's going to be and what I mean by that is you've really got to balance building something. How fast you can get that with the return that you want, maybe it doesn't have to be financial, it could also be how many patients that it touched -- 200? 300? 1,000? 7,000? Because it really will come down to your opportunity cost. ... Because you can put down the dollars, but how big and how fast do you want the return?

Are payers reimbursing for telehealth programs and services?

Kung: Yes, there is payer reimbursement there. At the same time what I'm looking at is, yes, we'll look at those things, but there are certain other initiatives that we want that would be able to expand our axis, expand our geographic reach and different initiatives. So, historically at SCL we've been able to grow that across the eight initiatives that I talk about that are anything from population health, direct to consumer, primary care, things like that."

Wendy Cofran: I think in our world right now, sadly, out of the twenty plus payers that we accept only two right now recognize telehealth as a viable source of treatment and it does make it hard, going back to the ROI. ... My CFO just constantly says, 'Is this working for us?' and for us the return on investment is keeping [patients] out of the hospital so that we can recognize what worked the most. ... The challenge for us right now is that we're constantly collecting the data and sharing it but because each of us, especially in the Massachusetts area, are operating in a silo. We have to wait for the MGHs and other organizations and other health systems and physician practices to also recognize who this could help. We're all questioning our own data because there's no central place to get it and then present it to the providers. We're all sort of having to fight that fire, have that conversation individually, and that's part of the problem is just that there's no conversation amongst payers [and] providers at that level to say, 'Is this going to work for us or is this not going to work for us?' And if it is ... we have to have a shared risk and until that happens I don't know that we're ever going to get around this issue.

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This was last published in September 2017

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