The co-CEO talks with Chief Healthcare Executive about telehealth usage by hospitals and insurers and the company’s new federal contract.
Even with the sharp growth in telehealth following the COVID-19 pandemic, Roy Schoenberg suggests some of the big changes are still to come.
Schoenberg is the president and co-CEO of Amwell, the telehealth company that he co-founded with his brother, Ido, who serves as chairman and co-CEO.
In an interview with Chief Healthcare Executive®, Schoenberg says the expansion of virtual care is only going to continue.
“The reality is that the arrival of a world where clinical skills can travel over technology … that train is not going back into the station,” Schoenberg says.
"The understanding of how technology can load balance and create efficiencies in utilizing the resources that we have, is transformative to the business.”
Schoenberg discussed what he sees ahead for telehealth, for health systems and insurers. He highlighted the increased use of virtual care to deliver primary care and behavioral health. And he talked about Amwell’s new contract with the Defense Health Agency.
Providers and payers are going to utilize virtual care to bring dramatic changes, Schoenberg says.
“They’re going to rewrite the way the business is working,” he says. “At the end of the day, it’s driven by the fact that healthcare is traveling through technology, and that opens up the door to a lot of different things.”
Payers and virtual primary care
Amwell provides virtual care for organizations across the healthcare industry. The Boston-based company has contracts with more than 2,000 hospitals, more than 50 health plans and more than 100,000 providers. Amwell’s business is split roughly evenly between providers and payers.
Schoenberg says he expects to see more growth in virtual primary care, particularly as payers are launching primary care services via telehealth.
“Virtual primary care is probably the most disruptive way that telehealth can be utilized on the payer side of things, and we're doing a lot of it and it's growing,” Schoenberg says.
Schoenberg says payers are getting behind virtual primary care as a mechanism to control costs.
“The ability of the payers to be in the room where it happens, where the clinician is essentially writing the orders for the management of their membership, opens up the door for payers to be significantly more efficient in managing the consumption of care by their membership,” Schoenberg says. “And I'm not saying this is a sinister plan. This isn't a bad thing.”
Schoenberg argues that with payers getting more patients engaged in primary care via telehealth, they can ensure patients who need additional services, such as CT scans, are going to get to “the right clinicians.”
Nonetheless, he says, “The fact that the payer now has a say, essentially at the primary level of care for their membership, has enormous implications on their ability to contain costs,” Schoenberg says.
Eventually, he says employers are going to see more favorable terms for offering virtual plans, “because payers want people to start utilizing virtual primary care.”
“I think that’s right in front of us,” he says.
Excitement, and more competition
Hospitals and health systems are using telehealth to deliver care to patients, but Schoenberg is expecting to see more use in another area. He says more health systems are going to use telehealth to deliver services to smaller hospitals or primary care practices who need help with certain patients.
“Oncologists form very large tertiary medical centers who possess the knowledge of how to deal with a specific kind of leukemia can now join forces with a PCP in Kansas that doesn't know how to handle their very complex oncology patient, and don't have that level of research, that level of understanding of what we can do for those kinds of patients,” Schoenberg says.
“This is a very different world of thinking about how the care of a patient is going to be rendered,” he adds. “I actually think that we're just at the beginning of this.”
Health system and hospital executives are eager to use telehealth to make it easier for patients to access services, Schoenberg says. But he says health systems recognize that telehealth also means increased competition for patients.
“They're also very, very aware of the fact that when you introduce a redistribution mechanism to any industry, it changes the playing fields,” he says.
He pointed to Amazon’s emergence, which offered more convenience for consumers but helped push some retailers out of business. Amazon is also very engaged in telehealth, with its $3.9 billion acquisition of One Medical, which offers primary and virtual care. Earlier this month, Amazon announced Prime members could get 24/7 virtual care from One Medical for $9 per month, or $99 per year.
“I think a lot of health systems, especially health systems that are very geographically oriented, understand that while they can create a lot of efficiency, it also means that the playing field is open for others,” Schoenberg says.
Health systems also are seeing higher use of virtual care in behavioral health. Patients are showing more comfort in utilizing virtual care to connect with mental health professionals.
Healthcare leaders say telehealth is critical in expanding access to behavioral health service. Nearly two-thirds (62.8%) of telehealth visits in the fourth quarter of 2022 were for behavioral health appointments, according to a report from Trilliant Health in September.
“The uncomfortable truth is that the need for it is just off the charts,” Schoenberg says.
A new contract
Even with its wide array of contracts with hospitals and payers, Amwell is seeing its share of financial challenges. Through the first nine months of 2023, Amwell has reported a net loss of $629 million.
But Amwell has secured a major government contract. The company announced in October that the Defense Health Agency has selected Amwell, in partnership with Leidos, to lead the “Digital First” initiative to transform the military health system. The contract is worth up to $180 million.
With the pact, Amwell will offer telehealth services, including behavioral health programs.
Amwell will also be bringing its Converge platform to the Defense Health Agency. The platform is being used by Amwell’s commercial partners.
The Converge platform “offers all of the digital instrumentations for caring for patients, including payer functionality and provider functionality, in one chassis,” Schoenberg says.
Schoenberg says he’s optimistic that other large health organizations, and perhaps other federal agencies, could turn to Amwell to handle their digital operations.
“The promise of digital is to create a completely different presence of healthcare next to the people that they serve,” he says.