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How hospitals and health systems could do more with telehealth

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Some hospitals and medical practices are using virtual care on a limited basis in some areas. Dan D’Orazio of Sage Growth Partners sees more potential.

Hospitals and health systems are missing major opportunities with telehealth, Dan D’Orazio says.

D’Orazio is CEO of Sage Growth Partners, a healthcare consulting firm. The company released a report on telehealth last week that suggests providers and hospitals aren’t taking full advantage of telehealth. About 20% of patient encounters are taking place virtually, D’Orazio says, but he sees potential for that number to grow.

D'Orazio says he sees "tremendous opportunity" with telehealth.

“My takeaway here is we have not arrived,” D’Orazio says. “Let's not throw the flag up, mission accomplished. And let's not think 20% is all we'll ever get to.”

Rather, he says, “I want people to see this as we're just beginning.”

In an interview with Chief Healthcare Executive®, D’Orazio says hospitals and providers need to look at telehealth differently.

Healthcare leaders need to think more seriously about using virtual care in different ways. More importantly, he says hospitals and providers need to start thinking of telehealth as more than just an offering to patients but as a key element of their strategic goals.

“I think they have to link their strategic objectives with their operational objectives, with their labor objectives with their technology objectives,” D’Orazio says.

(See part of our conversation with Dan D'Orazio in this video. The story continues below.)

‘It’s not a habit’

Sage Growth Partners surveyed 155 respondents nationwide. The company produced the report in conjunction with Project Healthcare and The Disruption Lab.

Many providers are utilizing telehealth more in the area of behavioral health, which coincides with other studies showing the rising use of virtual care to help those with mental health or struggles with substance use. For medical, behavioral health represented the biggest increase in use of telehealth over the past year, with virtual visits rising from 13% to 20%.

Telehealth is also being increasingly used in chronic care management. For hospitals, this marked the biggest increase in the use of virtual care, rising from 8% to 19% in the past year. Hospitals project the use of telehealth for behavioral health services will rise from 20% to 30% by 2025, the report states.

At the same time, hospitals saw a notable drop in the usage of telehealth for initial visits, falling from 21% to 11%. Health systems should view telehealth as more than an entry point, as D’Orazio says he doesn’t like the term “digital front door.”

“There are a lot of doors that people could be using telehealth for,” D’Orazio says. “The patients can be coming in different doors. Facilities can be using this inside their walls, to send people through different doors in different units.”

Hospitals and providers could be utilizing telehealth as a triage tool. Only 5% of hospitals are using telehealth for triage, even though about one-third of hospitals have that capability, D’Orazio notes.

He suggests health systems could use telehealth to screen people that don’t need to be in the emergency department, which could also reduce the wait times for those who genuinely need emergency care.

“We're not serving the people who might need us in that ED,” D’Orazio says. “More importantly, there's people in there that we don't need to serve in the ED, and telemedicine has a role.”

Health systems should view telehealth less in terms of a technology offering and more of a solution to improve workflows, he says.

More hospitals are starting to use virtual nursing solutions to monitor patients, D’Orazio notes. But he notes that nurses working remotely could also be preparing patients for discharge, which would free up nurses on the floor to spend more time working with other patients.

“I think that's where we're going to have to have a redistribution or better distribution of capacity and expertise with these virtual solutions,” D’Orazio says.

For now, hospitals and providers aren’t taking full advantage of telehealth in serving patients and strengthening their business.

“It's not a habit, for us, for the providers, for the system, because I think there's been so much variance now about its utilization,” D’Orazio says.

'Laziness' in virtual care

Most hospitals and medical practices don’t view new healthcare competitors as serious threats to their business, the survey found.

D’Orazio says that’s a finding he didn’t expect.

“I think it's surprising that healthcare systems, writ large, are not feeling threatened by other market entrants,” D’Orazio says.

Just over a quarter (27%) of hospitals described new market entrants as a major or significant threat, while 50% of hospitals said they were a minor threat due to patient loyalty. Among medical practices, only 13% viewed new market competitors as a major threat, while 54% said they are a minor threat due to the relationship they have with their patients.

Plenty of non-traditional competitors have entered the healthcare market or expanded their presence recently. Just last week, Costco announced a partnership with Sesame, a virtual care marketplace, that gives Costco members virtual care appointments for $29.

Earlier this year, Amazon completed its $3.9 billion acquisition of One Medical, which offers primary care and virtual care. CVS Health announced in February that it is buying Oak Street Health in a $10.6 billion deal. CVS also recently completed the acquisition of Signify Health, a network focusing on delivering care at home.

Walmart is also expanding its health clinics, and its offerings include telehealth appointments. Best Buy Health is also partnering with hospitals to deliver care at home.

D’Orazio stresses that he has deep respect for healthcare providers, noting that his wife is a trauma nurse. But he also cautioned providers that they shouldn’t dismiss the threat they’re facing from new competitors in the healthcare market.

He pointed to a Harris Poll, reported by Time, which found that more than 70% of Americans feel the healthcare system is failing them.

“The very people that are saying we're going to use this for patient satisfaction and access, frankly, are the people who are part of the failure in patient satisfaction and access,” D’Orazio says. “And I say that with respect.”

That’s part of why D’Orazio bristles at the idea that telehealth usage has peaked. Hospitals and providers need to consider different ways to use telehealth and modify workflows to make it easier for clinicians to serve patients.

“I don't want there to be a laziness about virtual care, digital health, telehealth, whatever we call it,” D’Orazio says. “The laziness, I think is, ‘It's arrived. It's 20%.’ I think that's dangerous.”


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