According to a report issued by the National Center of Health Statistics, the percentage of adults who used telemedicine in the past 12 months decreased by 6.9%.

As virtual care numbers come back to earth, the industry is adjusting. As Amazon consolidated and repositioned its own telehealth offerings this summer, for instance, it announced $49 pay-per-visit consults.

One recent study reported on telehealth trends in U.S. hospitals – and explored opportunities and barriers to growth. Meanwhile, the American Telemedicine Association is pleading with the Centers for Medicare and Medicaid Services for expanded flexibilities and further guidance on payment and coverage.

Industry experts also see the need for clarity. Matt Wolf, healthcare senior analyst at consulting firm RSM US, believes that without regulatory reform it's likely the United States will see telehealth services stagnate – and perhaps even decline. Despite a continued focus on telehealth, the industry faces numerous setbacks that could limit virtual care from finding success, he said.

We interviewed Wolf to better understand his views on the state of telemedicine and regulation, and to discuss his belief that when payers and providers are incentivized to promote health outcomes for patients, leveraging technology to expand access can make economic sense.

Q. You believe that without regulatory reform, it's likely we will see telehealth services stagnate, and possibly decline. Why is that?

A. The economics of healthcare services in the U.S. are inseparable from the regulatory and reimbursement environment. With respect to telehealth, this current environment is exceptionally complex to navigate.

Ultimately, patients want to access healthcare services when, where and how it is most convenient to them. This is how we interact with most services in our lives. We shop, entertain ourselves, socialize, bank – even work, to a degree – through whichever physical or digital channels we choose, at times that we choose.

This is the promise of telehealth and virtual health: massively expanded access to the point of customizable convenience. The current regulatory and reimbursement framework impedes that. Instead of a single labor market able to serve patients virtually, we have 50 localized markets.

Convenience comes from matching a patient need in Pennsylvania with the right provider, regardless of where that provider is located. A telehealth or virtual platform that has to match a provider in the same state as the patient is only incrementally more convenient for most patients than simply going to a physical location for care.

Furthermore, the cost of many virtual visits is simply additive. Patients are referred to urgent care or their doctor and the cost of the virtual visit does not apply to the referred care. This also leads patients to eschew the existing telehealth and virtual health options.

While use cases for telehealth and virtual health applications exist, we will not see broad solutions that significantly expand access and convenience without regulatory overhaul. The economics simply don't work, and we won't see mass adoption of a system that isn't convenient and on-demand for patients. It's what they've come to expect in almost every other aspect of their lives and anything short of that will be of limited use in healthcare.

Q. Licenses that allowed physicians to practice across state lines and provided reimbursement parity due to the pandemic have now expired. How does the healthcare industry overcome this challenge?

A. The healthcare industry does not agree that state licensing needs to be revised. There are stakeholders on both sides of the debate. Proponents of our current model often cite patient safety as a reason for more restrictive licensing. Others suggest that reworking the current system will improve access and any differences in state-to-state quality should be addressed regardless of the licensing model.

Rapid development in generative AI and other advanced technologies offers a bright spot for reform. Such technologies may, over time, augment, however not replace, providers' ability to care for patients at consistent levels of quality regardless of that patient's physical proximity to the provider.

Certainly, each provider has an upper limit to the number of patients they can see, serve, treat or operate on in any given day or week. The allure of advanced technologies lies in reducing time spent on provider workflows that don't directly touch the patient.

Leveraging such technologies will reduce the burden of patient messaging, identify potential complications by piecing together data from multiple health records, highlight potential prescription complications, etc. These technologies will help providers focus on more clinical care without working more hours, thus assuaging the healthcare labor deficit.

Additionally, such technologies can be used to evaluate quality and help keep busy providers up to date with the latest medical research and best practices, which may help address disparities in care and outcomes.

Q. Telehealth services are predicated on being accessible, although many rural communities still lack the bandwidth to use the technology. How can this obstacle be surmounted?

A. Infrastructure spending. It might be cable internet, fiber, satellite or something yet-to-be discovered, but this is the only answer. The U.S. has historically underinvested in its own infrastructure. For the 15 or so years leading up to 2022, we enjoyed very low, even negative, interest rates. This led to a period of underinvestment from both the private and public sectors.

The so-called "easy money" period meant mild opportunity for most as long as rates stayed low.

Now, to promote sustainable financial growth, both the private and public sector need to invest, and we're seeing elements of both. In the private sector we're seeing significant investments into anything connected with AI – semiconductors, data centers, data itself – and energy – both traditional and renewable – among other sectors.

Fiscal policy is also directing infrastructure investment via the Inflation Reduction Act, the Creating Helpful Incentives to Produce Semiconductors Act, and the Bipartisan Infrastructure Law.

It's difficult to say if this will be enough to fully expand broadband access to rural areas. The IRA and the Bipartisan Infrastructure Law allocate $274 million and $65 billion to the task, and the private sector is certainly interested in expanding broadband access in its own ways.

However, groups such as the American Society of Civil Engineers and the FCC have questioned whether this amount of government spending will be enough to fully cover every corner of the U.S. with broadband. According to a 2021 study, 65% of U.S. counties have internet speeds below the FCC's definition of "broadband."

Many healthcare providers are struggling with the economics of providing complimentary pre-emptive care. They cannot be burdened with also providing complimentary broadband access to their rural patients. The government must take the lead.

Q. You point out that when payers and providers are incentivized to promote health outcomes for patients, then leveraging technology to expand access – which will also increase utilization – can make economic sense. What can hospitals and health systems do to make this happen?

A. Providers that want to lean into this type of alignment need to also control healthcare financing – that is, they need to be integrated with a payer themselves. By controlling the delivery and economics of care, a so-called payvider can, theoretically, align incentives and better promote outcomes.

Of course, this structure alone does not guarantee success. Organizations in this model need to leverage data about their patients, data about their clinical process and understand the cost of providing each unit of care to a specific patient. Generative AI and other advanced technologies are, however, making this a much more manageable prospect.

With proper alignment and analytics, a payvider could be reasonably certain that providing X care to patient Y at cost Z will improve outcomes for the patient in a way that is financially sustainable for the overall organization. Or, if that care plan is not financially sustainable on an individual patient basis, the organization can budget for that and attempt to offset the cost elsewhere, identify clinical or operational improvements in that care plan, or both.

Ultimately, healthcare is a scarce resource. Scarce resources can, generally, either be allocated via a market-based pricing mechanism or through a direct allocation method. Many observers and analysts are concerned – with good reason – that expanding access to care will drive utilization in a financially unsustainable way.

One potential way to address the overutilization concern is to first leverage technology to augment clinical care such that our existing labor pool can provide more care without working more hours. This effectively reduces the scarcity of healthcare.

The second step involves using advanced technologies to make sure that each patient gets the precise care they need at the precise time in a way that improves outcomes and is financially sustainable. These steps were not possible with the technology available even three years ago.

Follow Bill's HIT coverage on LinkedIn: Bill Siwicki
Email him: bsiwicki@himss.org
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