With more patients and providers being exposed to telehealth and virtual care, a report published Friday by McKinsey predicts that as much as $250 billion of current U.S. healthcare spending could theoretically be virtualized.
The key change has been the often-publicized surge of telehealth adoption accompanying the COVID-19 public health emergency.
Citing a handful of recent consumer and physician surveys conducted by the firm, the report's authors highlight a jump from 11% of U.S. consumers reporting use of these technologies in 2019 to 76% now saying they were moderately or highly likely to use telehealth going forward. Further, provider survey respondents said they are now conducting 50 to 175 times the number of telehealth visits than they did prior to COVID-19, with 57% noting that they now view telehealth more favorably.
"The current crisis has demonstrated the relevance of telehealth and created an opening to modernize the care delivery system," the report's authors wrote. "This modernization will be achieved by embedding telehealth in the care continuum at scale."
With these trends in mind, McKinsey analysts identified several nonacute care models that could be conducted virtually, which included: on-demand virtual urgent care, virtual office visits, near-virtual office visits, virtual home health services and tech-enabled home medication administration.
The analysts collected 2018 claims data representative for Medicare, commercial and Medicaid businesses, scaled spending and utilization to 2020 levels, and identified where those services could be replaced by the identified virtual-care use cases. Doing so yielded a potential $250 billion in virtual-care business – roughly 20% of all Medicare, Medicaid and commercial spend across outpatient, office and home health.
As a disclaimer, the report's authors noted that these are preliminary, non-exhaustive numbers that are being shared for "information purposes in response to the urgent need for measures to address the COVID-19 crisis."
WHAT'S THE IMPACT?
Shifting these areas of care to virtual services has had a short-term benefit during the COVID-19 crisis, but also has the potential to improve access to care, patient experience, health outcomes and healthcare-spending efficiency, the analysts wrote.
To realize these advantages, however, healthcare stakeholders across the board need to be prepared.
The analysts recommended that payers define a value-backed virtual health road map, accelerate value-based contracting that incentivizes telehealth, build new product designs with virtual health and better integrate virtual health into care delivery.
Investors, they continued, should assess the impact of virtual health across various services, and identify the specific assets and capabilities that will enable strong execution and value generation.
As for health systems, the key will be to prioritize a comprehensive digital front door for consumers, build virtual-care capabilities and incentives for clinicians, and better quantify outcomes and other benefits to support advocacy for these technologies.
"The seeds for success will be sown in the next few months during the COVID-19 crisis," they wrote. "Healthcare systems that come out ahead will be those who act decisively, invest to build capabilities at scale, work hard to rewire the care delivery model and deliver distinctive high-quality care to consumers."
THE LARGER TREND
There's little question that telehealth and virtual care services are having their moment in the spotlight.
Major telehealth vendors like Teladoc Health and AmWell have each described major call-volume increases across their full range of offerings. Others, like Heal, Hims, Medici, XRHealth and Tava Health, have either launched new telehealth offerings or received new investments amidst growing adoption. Further, the Centers for Medicare and Medicaid Services, the FDA, the FCC and Congress have all provided funds or relaxed restrictions on telehealth to expand their reach throughout the pandemic.