Bundled payments, gainsharing to make digital health viable

By Neil Versel
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Neil_Versel_LargeRecent MobiHealthNews interview subject Proteus Duxbury, director of technology strategy for virtual health services at Englewood, Colo.-based Catholic Health Initiatives, told me that lack of insurance reimbursement is holding back wider adoption of digital technologies. "A lot of [provider] organizations are going to start pulling the plug on some digital health initiatives for that reason," Duxbury said.

Perhaps, as MobiHealthNews' Jonah Comstock suggested a few weeks ago, they are looking in the wrong places. "I never foresee a day where there’s [Medicare] ‘Part M’ and we just reimburse for mobile health,” Welldoc Chief Commercial and Strategy Officer Chris Bergstrom told Comstock.

Nope, there won't be. But there will be – and already are in some cases – bundled payments and shared savings based on efficiency and improved patient outcomes.

According to the American Telemedicine Association, 19 states currently have telemedicine parity laws, which require health insurers to cover remote consultations just as they would for in-person care. Another 10 states plus the District of Columbia have legislation pending.

But parity is not nationwide, and even if it were, the 19 state laws do not apply to a lot of digital health, just to telemedicine where healthcare professionals are present at both the origination and remote point. "Digital health changes the modalities," Duxbury noted. Monitoring and care take place outside of traditional clinical settings. 

"Telemedicine is going to be right in the middle of this," colorectal surgeon Dr. Andrew Watson, executive director of telemedicine at the University of Pittsburgh Medical Center, said Tuesday at the ATA Fall Forum in Toronto.

Why? It eliminates waste. The Institute of Medicine estimated last year that 30 percent of the $2.6 billion the U.S. spent on healthcare in 2009, or $765 billion, was unnecessary. At that same rate, the country will squander closer to $900 billion this year on healthcare costs unrelated to actual patient care.

Watson, who also is medical director of the UPMC-affiliated Center for Connected Medicine, urged conference attendees to look at all the waste when they try to justify spending on digital health technologies. "That's where the money is," Watson said, adding, "the 'value' of value-based purchasing is what we need to concentrate on."

Watson suggested telehealth proponents should "frame it as a gain-share" for provider organizations, much like the patient-centered medical home and said remote patient monitoring should be a "basic" hospital purchase like a gauze pad.

If you believe current ATA President Dr. Ed Brown, CEO of the Ontario Telemedicine Network in Canada's most populous province, 25 percent of care will be delivered through electronic channels by 2020. Hospitals in the U.S. will fight to keep building more bed towers, but inpatient facilities won't be so necessary if payers and purchases succeed in eliminating a lot of the waste and in getting value for all their money.

Clinicians have to embrace technology as well, which they will if they have the proper financial incentives. "The most important part is the virtual care team," Watson said.

"There's so much margin to make quality better, and that's where our focus is now," Watson said.

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