By Tamara Mathias via Reuters.com
After years of lobbying in Washington, U.S. telehealth providers have the first hints that the dam could break on public funding for an industry they say could save taxpayers billions.
Four bills that could be signed into law over the next year carry the solutions to barriers that have prevented the United States’ huge over-65 health program Medicare from reimbursing doctors’ and medical visits, which often start over the phone.
The bills come at a time when the industry’s claims of cost savings – powered by apps and mass smartphone usage – have begun to gain traction with private insurers striving to save on healthcare costs.
One issue for public spending on telehealth has been the inability to charge across state lines. Another is that Medicare does not recognize medical consultations that do not happen in person as the equivalent of a visit to the doctor.
The fate of legislative amendments that unlock these barriers is far from clear in a fractured U.S. Congress, but investors and some of the world’s big healthcare providers are already circling firms like the U.S. sector’s dominant player Teladoc Inc.
Analysts say Teladoc racked up 75 percent of reported video or phone visits, according to 2016 estimates, but European insurance company Allianz Group earlier this month committed $59 million to American Well, one of a handful of smaller privately-run operations expanding in the sector.
Apple Inc’s Heart Study app, which flags irregular heart rhythms in users wearing Apple Watches, allows them to instantly connect with a doctor using American Well’s technology.
American Well Chief Executive Roy Schoenberg says that while revenue is steadily rising in the industry, it could grow 10-fold if payment parity, state-line and location-based constraints were lifted.
“There is a big black line between the availability of telehealth services to Americans under the age of 65 and Americans that are above the age of 65,” Schoenberg said.
“This (legislation) would be an earthquake.”
TELEHEALTH COSTS SAVINGS
Private insurers who cover the medical expenses of nearly 70 percent of U.S. adults aged 18-64 are attracted by costs that analysts say are at most a third of traditional face-to-face care.
Cowen and Co analyst Charles Rhyee estimates the average cost of a telehealth call is between $40-$50 compared to around $150 for an urgent care visit, and nearly $1,500 for a trip to the emergency room.
Rhyee also estimates that roughly $135 billion of Medicare’s annual $675 billion in spending could be done by telehealth.
Whether legislators agree may depend substantially on a report from MedPAC, the Medicare Payment Advisory Commission that advises Congress on Medicare payments, which is due by mid-March.
Critics question whether the service will be quite so wallet-friendly when used en masse, warning of costs from telehealth visits that supplement, rather than substitute, in-person visits.
“The healthcare system is still being educated in terms of the value of telehealth and where it’s best suited,” says Matthew Gillmor, an analyst with brokerage Baird.
Still, Jason Gorevic, chief executive of Teladoc, points hopefully to the furthest along of the four bills – the telehealth-friendly CHRONIC Care Act – which was recently approved by the Senate and seeks to promote home-based care and expand the remote treatment of stroke and dialysis patients.
“The current crystal ball on Washington looks like the Centers For Medicare And Medicaid Services will allow Medicare Advantage plans to include telehealth in their bid for the 2020 plan year,” Gorevic told Reuters.