, , , 0 comments

Health systems are split on whether to keep telehealth if reimbursements drop

  • Only 20% of US health systems said they’d continue offering telehealth if reimbursement rates reverted to pre-pandemic levels.
  • This could make patients flock to direct-to-consumer virtual care providers like 98point6.

A mere 20% of US health systems said they’d continue offering telehealth if reimbursement rates reverted to pre-pandemic levels, while another 30% are unsure whether they’d keep offering virtual care in this case, according to a joint KLAS Research and Center for Connected Medicine survey of 117 health system execs.

US Physicians' biggest problems with telehealth
Just 20% of health systems would continue offering telehealth if reimbursements drop. 

It makes sense that health systems would want to eliminate services with low returns, but ditching telehealth could prove risky if additional waves of outbreaks put elective procedures back on hold. Should telehealth reimbursement rates return to their paltry pre-pandemic levels, health systems could offload nonprofitable virtual care solutions in favor of higher revenue-driving in-person care to recoup some of the $323 billion they’re projected to lose through the end of 2020.

But this could prove risky in the event of another wave of outbreaks that forces stay-at-home orders. In this case, hospitals would yet again have to cancel elective procedures—major drivers of revenue—and they’d also be left without a readily available telehealth solution to leverage to secure revenue as consumers flock to virtual care as they did during the first wave of outbreaks.

Virtual care startups with direct-to-consumer (DTC) offerings could be the ultimate benefactors of hospitals’ decisions to ditch telehealth. Telehealth usage skyrocketed in the US when the novel coronavirus hit hard in April, and although adoption has since leveled off, it remains significantly higher than pre-pandemic levels.

And we expect usage to still best pre-pandemic levels once outbreaks subside: More than 50% of consumers plan on using telehealth post-pandemic, per Amwell’s 2020 “Physician and Consumer Survey” of 2,000 US adults. Should health systems discontinue their telehealth offerings—a strong possibility we discussed with 98point6 CEO Robbie Cape in July—telehealth startups could be presented with a whole new population of patients who still want to use telehealth, but lost access from their provider.

This would put telehealth startups with DTC offerings in pole position to capture an even greater share of the burgeoning US telehealth space—a market that’s projected to nearly quadruple from an estimated $29 billion in 2020 to $106 billion by 2023, per Doximity.