Convinced that telemedicine, which exploded during Covid-19 shelter-in-place orders, is here to stay, insurers are moving to expand networks and provide virtual primary care plans at lower premiums and less cost-sharing for patients.
Telehealth lets patients meet with health-care providers electronically, via computers or telephones, instead of in person. Patients can receive services at home from providers outside their areas, including monitoring for such chronic conditions at diabetes.
When Covid-19 hit, telehealth, typically available in health plans but not robustly used, took off, with many insurers waiving out-of-pocket costs so consumers could get care without exposing themselves or their providers to the risk of coronavirus infection. The federal government and many states issued regulations or enacted emergency laws to raise reimbursement rates for providers and ease restrictions, such as licensing requirements, to expand telehealth access.
Now, that shift may be here to stay. More insurers, spurred by telemedicine’s lower costs and greater efficiencies, are setting up networks beyond their geographic areas, potentially boosting competition among providers. But telehealth has limits, and it’s also unclear if the savings long associated with virtual medicine will be undermined by the higher rates that insurers and the federal government paid to help expand the sector in the first place.
Virus Opened Door
Telehealth services have been available for years, primarily for people in rural areas or those who lack access to specialized services, but use has been anemic.
More than 70% of people with health insurance have access to telehealth through their plans, and many insurers have partnerships with telehealth providers, Sam Glick, a leader of the Oliver Wyman Health Innovation Center, an initiative of the management consulting firm, said. Still, the pandemic led many consumers to telehealth for the first time.
“Before Covid, fewer than 10% had ever used it,” Glick said. “Now with Covid, a lot more people have tried it.”
The cost savings can be substantial. Visits with medical providers using telehealth services such as Teladoc Health Inc., a U.S.-based multinational telemedicine and virtual health-care company, can be as low as $75 for cash payments and even less if covered by insurance, compared with a typical charge of $150 to $300 for an in-person visit, he said.
Increased use of telehealth may also help drive down costs by expanding health plans’ networks of doctors and other providers and creating greater competition, Glick said.
While individual doctors have to be licensed in the state where their patient is located, many physicians have licenses in more than one state and, more importantly, companies such as Teladoc or Amwell set up systems so patients can be matched with appropriately licensed medical practitioners, Glick said.
That makes them national competitors, “which is very different than what a local medical group with all of its doctors in one place can do.”
Virtual Primary Care
Three months into the pandemic, some health insurers are creating primary care networks based on telehealth, offering reduced or no-costing sharing for members who enroll and lower premiums.
Louisville, Ky.-based Humana Inc. June 1 expanded its On Hand primary care plan, first started in 2019, from two to 13 states. On Hand uses telehealth service Doctor on Demand and is being offered to companies with 100 or more employees where, previously, it was available only to smaller companies.
“We wanted to take it another level” and create entirely virtual primary care plans instead of just embedding basic telehealth options in traditional plans, Caleb Gallifant, Humana’s vice president of product development and partnerships, said. Telehealth previously was used mostly for urgent care, he said.
Humana, with 1.3 million members in employer-sponsored plans, wouldn’t divulge the number of people enrolled in On Hand, but Gallifant said it has gotten more requests as it has expanded its market.
“I think there’s some pent-up demand,” he said.
On Hand makes it easier for geographically dispersed companies with remote workers to offer broader networks, and most companies who buy the plan have never offered health benefits before, Gallifant said.
Premiums are cheaper—20% to 50% less than traditional plans; there are no copays for telemedicine primary care visits; and enrollees receive thermometers and blood pressure monitoring devices at home, he said.
Comfort Level
Familiarity with telehealth grew so quickly in the pandemic that Mountlake Terrace, Wash.-based Premera Blue Cross fast-tracked the creation of its virtual primary care plan, Premera NOW, which came out in mid-May in time for open enrollment season, said Rick Abbott, vice president of product and market solutions.
“We’ve seen a progression of almost a decade in terms of experience and comfort with things like telehealth just in the past 90 days,” Abbott said.
Premera, which operates primarily in the Pacific Northwest, has more than 2.2 million members, including some with large employers such as Microsoft Corp. and Amazon.com Inc.
Premera NOW uses telehealth primary care clinic 98point6. Patients who use telehealth for a substantial portion of their primary care needs receive “unlimited access for free” and are charged a copay for specialist office visits when referred by a virtual primary care doctor, Abbott said.
Premiums for Premera NOW run about 10% less than traditional employer-offered plans, and Premera is looking at offering a similar type of virtual primary care plan in the individual market, he said.
Cost and Care
The U.S. Department of Health and Human Services, as well as private insurers in many cases, raised telehealth rates to match in-person visits, providing incentives to providers to participate in telehealth during the pandemic, Danielle Showalter, a principal with consulting firm Avalere Health, said.
Higher rates, though, call into question whether cost savings long associated with telehealth will be lost. Premera decided “for the near term” to equalize payments for local providers to help them “make it through this pandemic whether you were in telehealth or in-person,” Abbott said.
But the company hasn’t decided what to do about future rates.
Abbott said telemedicine probably warrants “a lower price point” than in-person health care because it’s delivered in a way that uses fewer resources, “but that’s a discussion our network team is having with our local providers and our insurance commissioner as well.”
Telehealth isn’t suited for all medical scenarios, but health plan administrators expect it to play a bigger role in some areas, such as monitoring chronic conditions.
Devices that track blood sugar, blood pressure, and other health metrics will increasingly be used in telehealth plans, Glen Tullman, executive chairman and founder of Livongo Health, a digital health company aimed at helping people manage chronic diseases, said. That will cut down on unnecessary visits for people who are doing well and flag those in need of extra help, he said.
Glick agreed telehealth would play a bigger role in monitoring chronic illnesses, a shift that could have implications for the structure of health insurance by pushing it toward monthly provider payments for continuous care rather than paying for individual claims or visits.
Others say telehealth may continue to play a greater role in mental and behavioral health services, two areas that were a “real focal point area of expansion” during the pandemic—and where providers are lacking in some regions, said Showalter. Or it could be used for tasks that have, so far, been less explored, like emergency room triage.
“There are just a lot of uses for telehealth that haven’t previously been tapped as much, really across all of the markets, that have that kind of opportunity now that we’ve been put in a nice little test bubble thanks to the coronavirus,” Showalter said.
By 
