4 Reasons Why Video-Only Telemedicine May Not Be Profitable

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Casual care is very attractive for certain low acuity situations, but for the provider, profitability can be a challenge. Concierge Telemedicine by Telemedicine Web Services provides a solution.

As telemedicine expands into the consumer space, more and more people are becoming aware of it and its potential. Companies that offer video calls to physicians for certain low acuity ailments make it very convenient and inexpensive for consumers to get a prescription for a cough or sore throat. Making a video call for $50 sure beats spending hours going to a clinic.

This type of casual care is very attractive for certain low acuity situations. But for the provider, profitability can be a challenge. Here are four reasons why:

1.    Video-only telemedicine call-ins tend to be one-time events for the average consumer and are low cost substitutions for visits to local physicians. After the telemedicine company pays the physician, there is relatively little profit margin.

For a typical respiratory ailment, the prescribed medication works and the patient happily gets on with his/her life. If a deeper diagnosis or a follow-up is needed, then the patient shifts to a local physician and starts over.

In either case, there is little likelihood of repeat usage. The Cost-per-Acquisition to get consumers to use the telemedicine service is very high.

2.    Employers that sign PMPM contracts for causal care typically aren’t expecting big savings.

Casual care telemedicine can be seen as more of a perk or benefit than a cost savings to employers. And with mHealth being a top trend, employers may feel obligated to offer it “just because.”

3.    The big savings come from reducing hospitalizations and emergency room (ER) visits. A video call tele-visit isn’t designed to put a dent in that.

Consider that 75% of an employer’s healthcare spending is on higher acuity and chronic care issues that involve hospitalizations and ER visits.

In 2013, there was an average of 41.9 ER visits per 100 people at an average cost of $1.2K per ER visit.

In 2015, 4.4% of those less than 65 years of age with private insurance had a hospital stay. At an average cost of $10K per day and an average stay of 4.5 days, each stay cost $45K.

Many conditions, cardiac and pulmonary in particular, call for diagnostic medical devices, most notably a real-time stethoscope, to provide a sufficiently high level of care to materially reduce hospitalizations and ER visits.

4.    Most of the casual care telemedicine companies provide tele-visits using their own pool of contract physicians, not local physicians, making for a very fragmented care model.

The downside of casual care is the lack of continuity of care. For the casual consumer of these services, that doesn’t matter. But employees with higher acuity and chronic care, a casual care tele-visit may be a false start instead of a step up.

Is there a place for casual care tele-visits? Yes-in some cases. Their low cost and convenience means they are here to stay for a large percentage of the population.

Although, for employers looking to save on employees with the highest healthcare costs, video-only consultations typically don’t offer enough. For employers, telemedicine systems that specifically target the reduction of hospitalizations, re-hospitalizations and ER visits have been shown to save significant costs.

The Concierge Telemedicine system provides key features with this in mind:

  •     A telemedicine system at the work site with all the key medical devices found in the physician’s office.
  •     A telemedicine system that can be placed in the homes of at-risk employees and their dependents.
  •     A selection of medical devices that can be matched to a person’s needs.
  •     A pool of medical devices that can be issued as needed to employees and their dependents.
  •     Free video-only tele-visit service to all employees with the ability to smoothly move a person to the next tier of service with the addition of medical devices.

Because video-only tele-visits are designed to provide low acuity casual care, they will fall short when competing with full telemedicine offerings that can also offer higher acuity and chronic care.

About Telemedicine Web Services (TMWS):

TMWS is a technology innovator that markets its telehealth solutions through value added resellers (VAR). By providing each VAR with the flexibility to structure their own model for value-add product offerings, TMWS is fulfilling the demand for consumer telemedicine at a competitive price.

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N. Stefurak
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