Health IT, Telemedicine

American Well CEO: Telehealth can bridge gap between supply and demand

Roy Schoenberg sat down with MedCity News to discuss telehealth and a future where patients in even the most remote and underserved parts of the country could be treated by world-class physicians at top providers.

Bridging the Gap Medigap bridge money

American Well CEO and Cofounder Roy Schoenberg is bullish about the future prospects of the telemedicine industry prospects despite years of inconsistent traction.

Schoenberg explained how vital telehealth is to the overall healthcare industry, in a recent interview at the Xconomy’s What’s Hot in Boston’s Healthtech event.

“If I had to capture what telemedicine and telehealth is all about, this is the one image that tells the story better than anything else,” he said displaying the image of a medicine cabinet with a friendly, miniature physician inside. “Having a personal physician in your medicine cabinet represents the capability to extend care to where it’s most convenient for us.”

While the promise of telehealth is real, the industry has been plagued by low utilization. Yet, paradoxically it is also one where growth seems to be taken for granted.

Telehealth is set to be a $34 billion market globally by the end of 2020, with 40 percent of that revenue coming from North America, according to analysts from Mordor Intelligence.

Others point to the economic imperative that providers feel to rein in costs and improve care.

“Progressive healthcare organizations recognize the need to bring care closer to the patient to improve quality and reduce cost. Telehealth is a great way to do this and expand access,” said Kate McCarthy, senior healthcare analyst at Forrester Research, who was previously with Boston’s Partners HealthCare. “I anticipate that virtual visits will become the most prevalent place of service over the next ten years. Building a foundation today secures a place in the future of medicine tomorrow.”

Schoenberg believes that American Well is poised to deliver better, convenient care that can push costs lower. More fundamentally, he believes that American Well helps to solve an inefficiency inherent to the U.S. healthcare system. The current  delivery model is a linear one that assumes patients travel to a physician and queue there to seek care. In reality, supply and demand are unevenly distributed over location and time.

Many regions of the country have extreme shortages of general practitioners and specialty clinicians. Others, like Boston, have an abundance and have emerged as healthcare hubs. On a micro level, he noted that physicians often have unused schedule capacity during their day because of cancellations or no-shows. Or, they enjoy working in the evening or over weekends.

At the same time, many patients desire care but can’t easily travel to a hospital or clinic. Telehealth delivered by phone or ideally video conference, then, can bring supply and demand together and create new efficiencies and opportunities.

Despite conventional wisdom, not all healthcare needs to be delivered face-to-face in a hospital or clinic, he stressed. Minor problems are often easily addressed by way of a quick video chat, and the technology also lends itself to monitoring patients with chronic problems like diabetes.

Management consultancy Deloitte agrees. Their research suggests that about half of today’s 600 million annual visits to general practitioners in the U.S. and Canada are for problems that could be addressed remotely. Over 100 million of these visits involve prescription refills, coughs, sore throats, skin rashes, and other such acute topics. Countless others are for routine monitoring of chronic ailments like diabetes.

While the idea of being seen remotely by physicians is gaining currency, it wasn’t always so.

In American Well’s early days, Schoenberg recalls often being asked if patients would balk at the idea of remote doctor visits for fear of safety, technology, or privacy problems. With the success of Amazon, Uber, and others online players, that anxiety has been mitigated, he said.

Equally important, medical boards and professional associations have established best practices and endorsed telehealth as safe and effective when those are followed, he added. The endorsement of insurers and employers—by way of their agreement to reimburse physicians for virtual care—has helped a lot, too.

Still, there is work to be done.

The human resources and benefits consultancy, Mercer, reports that amongst employers in 2014 offering telehealth, only about a fourth saw utilization exceed 5 percent. Meanwhile, the same Mercer report shows that 30 percent of large employers are now offering telehealth benefits and another 35 percent are considering them.

But is telehealth truly saving money? Is there a clear link that can be established? Some do see a direct link while others are skeptical.

Dr. Ateev Mehrotra of Harvard Medical School is a noted telehealth skeptic and has called for more research into usage incentives, clinical outcomes and overall spending. In 2015, he remarked that, “I would raise an eyebrow at the at the idea that these telehealth services are going to save the healthcare system a lot of money.”

Not surprisingly Schoenberg has plenty to disagree with on this point. He was adamant that his company’s payer clients are seeing efficiencies. Renewals and satisfaction levels are strong, he declared.

Cleveland Clinic, Intermountain Healthcare, and New York-Presbyterian are amongst the high-profile providers that have announced plans to integrate American Well’s platform into their technology ecosystems.

To facilitate these partnerships, American Well announced a technical agreement with Cerner that will smooth the transfer of data to and from electronic health records at major health systems.

Schoenberg envisions a near-term scenario where patients in even the most remote and underserved parts of the country could be treated by world-class clinicians from Cleveland Clinic or any number of highly-regarded leaders. Licensing and regulatory reforms are coming in 2017, he says, that will simplify all of this.

Schoenberg also anticipates continued traction in specialty areas like behavioral health. American Well has launched an offering that he believes will help address a nationwide shortage of psychiatrists, psychologists, and social workers. He’s hopeful that access to care from the comfort of home may also reduce the stigma of seeking treatment.

What of the upcoming uncertainty to healthcare overall under the Trump administration?

Schoenberg diplomatically hedges his answer about the impact of a Trump administration on his industry and American Well. He ultimately concludes that, regardless of how the healthcare system may again be reformed, telehealth’s advantages are too compelling for it not to play a major role.

Photo: BigStock Photos

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James Gardner

James A. Gardner, @jamesagardner, is a Boston-area sales and marketing professional with a passion for consumer technologies and all things health, web & social. He started his career with Procter & Gamble before earning his MBA at Northwestern University's Kellogg School of Management. Since then, James has served senior clients as a consultant with McKinsey & Company, led complex digital projects with Boston-area agencies, and built several high-performing marketing teams. He’s also been published and quoted in multiple professional publications, most recently CMSWire, CIO.com, eHealthcare Strategy & Trends, and MedTech Boston.

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