Telehealth went from a long-term ambition to a next-day imperative in 2020. The crucible of Covid-19 provided hard-earned insight into questions about telehealth’s use at scale. Patients like it, clinicians want to use it in the future, and plans and employers have begun to embrace it as a way to make care more convenient and accessible.

Health care leaders have an opportunity within the next 12 to 24 months to shape the future of care delivery through their approach to telehealth. Continued investment in and iteration of telehealth can create a health system that is more accessible, less expensive, and produces better outcomes. It can truly center care around the patient, wherever they are, not just when they’re in a hospital or clinic. And it could even make care delivery more equitable for patients and less onerous for clinicians. 

That future state is not guaranteed. No single stakeholder—plans, providers, clinicians, patients, or employers—has the economic incentive to address the challenges of integrating telehealth across the care continuum at scale. And reluctance to “go first” or elevate telehealth as a genuine mode of care delivery rather than a stopgap measure undermines its potential.

This executive briefing examines the key factors that health care executives must understand about telehealth—including opportunities to meet strategic objectives beyond convenience and access, address health equity, and meet the challenge of new competitors all along the care continuum.

4 truths that will make or break telehealth in 2021:

1. Patients are using telehealth, but plans and providers are missing an opportunity to deploy it as a means of managing chronic disease or controlling spending.
2. Stakeholders must compromise on reimbursement to avoid backsliding to pre-pandemic conditions.
3. Employers and consumers will look beyond providers and plans if demand for telehealth can’t be met through traditional channels.
4. Robust ongoing investment in telehealth—and digital health in general—can’t overlook the underserved.

Defining 'telehealth'

Telehealth represents the interactive, electronic exchange of information for the purposes of diagnosis, intervention, or ongoing care management between a patient and/or health care providers situated remotely.

Patients are using telehealth, but plans and providers are missing an opportunity to deploy it as a means of managing chronic disease or controlling spending

Covid-19 has created a new baseline of virtual visit use. In early 2021, virtual visits accounted for 17% of all visits. They have accounted for 15% to 20% of all visits since late June 2020, holding that level independent of the level of Covid-19 cases or hospitalizations. ¹

Covid-19 creates new baseline of virtual visit utilization

But while a focus on overall utilization rates of virtual visits is easy to understand, readily quantifiable, and indicative of overall interest in telehealth, it’s also short-sighted. Telehealth can meet strategic needs far beyond providing a convenient alternative (or pandemic-driven replacement) for in-person care, but only if plans and providers guide patients to use it that way and invest in modalities that can meet clinician capacity challenges.

1. Steer patients to productive use of telehealth, especially for chronic care

It’s more important to use digital interactions for the right types of visits and the right patients than it is to get any specific percentage of visits done virtually overall. Some visit types could almost all be virtual, including prescription refills, certain pre- or post-op visits, behavioral health visits, and annual wellness checks. Physicians rate their top three potential post-pandemic uses of telehealth as chronic care management, medical management, and care coordination.²

But this is not an “if you build it, they will come” situation. Providers and plans can’t simply offer these services; they have to recommend them. Sixty-one percent of patients say that they prefer in-person care over virtual visits³, but they rely heavily on their own physician for guidance. Half of patients who have actually used telehealth found out about it from their own doctor; another 27% found out from their plan. Providers can use their influence to guide the right patients to the right kinds of visits at the right points in their care journeys. This is exactly the kind of help that plans want from providers in managing utilization.

2. Clinician capacity challenges must be met with asynchronous telehealth

Given the twin endemics of clinician trauma and clinician shortages, health care leaders must find ways to deliver care at scale. Asynchronous technology allows for remote, non-real-time communication between providers and patients. It is uniquely positioned to function both as a gateway to the health system and as a modality for providing immediate care for common conditions—often at capacity rates higher than synchronous video visits alone. Advisory Board has previously estimated that artificial intelligence, which powers the most advanced asynchronous care platforms, could increase patient panel sizes by 30%.

Asynchronous telehealth helps meet capacity challenges

Asynchronous care tools allow the patient to submit symptoms and medical information conveniently and quickly through automated surveys and collection forms. AI-powered platforms can go one step further, generating an array of potential diagnoses for low-acuity concerns and suggested care plans. The provider can then quickly review this information within the platform, make a diagnosis, and determine the appropriate course of patient care and follow-up.

Asynchronous technology can thus off-load much of the provider and administrative burden that accompanies a traditional in-person visit. In turn, providers have greater capacity to see more patients and drive volume growth.

From the patient perspective, asynchronous technology has the potential to help health systems create a faster and more efficient “one-stop-shop” for the patient care journey—further enhancing investments in digital experience, as recommended above. Most consumers are unfamiliar with asynchronous care: only 20% had used it before the pandemic. But 87% of consumers who had an asynchronous e-visit with a provider say they would use it again.⁴

Stakeholders must compromise on reimbursement to avoid backsliding to pre-pandemic conditions

There is no certainty about the long-term state of telehealth reimbursement after the flexibilities enacted during the public health emergency expire. That is especially true of reimbursement parity, which CMS established for Medicare video and phone visits.

Much of the uncertainty stems from continued resistance to the use of telehealth as a regular mode of care delivery, not simply a pandemic-related stopgap. Influential groups such as the Medicare Payment Advisory Commission (MedPAC) have encouraged continued flexibility in telehealth coverage beyond the public health emergency, but they have explicitly downplayed the need for and appropriateness of payment parity. MedPAC commissioners and staff consistently assert that virtual care "should" cost or "probably" costs less for providers to offer. There's no evidence given for this, but it is among the primary reasons MedPAC believes Medicare should reimburse for telehealth at lower rates than in-person care. Another orthodox but largely unproven assumption rounds out those reasons: That payment parity will "distort prices" as clinicians steer patients to virtual instead of in-person visits.

Some health systems have already shared data that debunks such long-held assumptions that telehealth would surely increase use and ultimately cost more than in-person care. For example, Stanford Health's utilization data indicates that telehealth has been a substitute for in-person visits, not simply an add-on service.⁵ And a study of seniors with existing patient relationships at three large health systems found that 85% of issues were addressed in an initial telehealth visit—and if there were follow-up visits, the number of visits was only marginally higher than the number of follow-ups required for in-person visits.⁶

Telehealth has been a substitute for in-person visits

Health plans must narrow the difference between reimbursement for in-person and virtual visits that prevailed before the pandemic. Advisory Board’s recent conversations with plans indicate that many are considering reimbursement for some types of telehealth visits at 75% to 90% of in-person rates, which is a constructive step. If reimbursement returns to pre-pandemic levels, which averaged about 50% of in-person rates, local clinicians simply will not provide telehealth services. That does not mean that demand from consumers and purchasers for telehealth will vanish. It means that non-traditional players will have an opportunity to meet that demand independent of industry incumbents. The market is already organizing itself along these lines, with technology companies making acquisitions and building alliances that will allow them to provide a suite of health care services that goes far beyond supplying virtual video visits.

Employers and consumers will look beyond providers and plans if demand for telehealth can’t be met through traditional channels

National telehealth platforms and non-traditional players have gotten much of the attention, but local providers have done the bulk of telehealth visits. Fewer than 10% of patients had a video or phone visit in 2020 with a provider who was not associated with a patient’s own doctor, employer, or health plan.⁷

Patient surveys show dominance of local clinicians in share of telehealth visits

But if reimbursement reverts to pre-pandemic levels, providers have limited incentives to continue to offer those services. That runs counter to the goals of both purchasers and patients.

• Employers are on board with telehealth. More than three-quarters of employers believe that telehealth can reduce their health care costs. As such, only 3% of large employers don’t offer some form of telehealth benefit. Ninety percent of employers say that their attention to telehealth increased during the pandemic, and 52% think telehealth will be a health care priority for their organization after the pandemic.

• Consumers see telehealth as a way to solve their own access and convenience challenges. Across all age groups, patients would consider a virtual visit as an alternative to a wait for an in-person visit as short as one day. Three-quarters of patients say that using telehealth removes a transportation barrier to receiving care; two-thirds say that telehealth allows them to see a doctor without taking time off work.⁹

Patients are impatient

The market is organizing to meet those demands outside of traditional care delivery channels.

• Teladoc and Livongo merged in 2020 to create a platform for wraparound virtual care and chronic care management.
• Cigna’s Evernorth health care services unit bought MDLive to establish its own telehealth offering.
• Grand Rounds and Doctor on Demand combined to offer care navigation for employers with a robust telehealth platform and virtual medical group, respectively.
• Amazon Care will soon offer a combination of virtual and at-home care and services to all of its U.S. employees and employers in all 50 states—plus in-person services in specific markets.

If providers and plans can’t supply telehealth visits, that doesn’t mean demand from purchasers and patients will go away. It means that providers and plans will be ceding the market to these other players.

Robust ongoing investment in telehealth—and in digital health more broadly—can’t overlook the underserved

Investment in telehealth and digital health shattered records in 2020. On-demand care attracted $2.7 billion in funding, while the broader digital health space (which includes telehealth) soaked up $14.1 billion.¹⁰ Within health systems, 50% of CFOs say that digital transformation is their number one priority¹¹, and 78% of health systems report that they will increase investments in IT and digital health in 2021.¹²

This is unquestionably good: there’s an enormous opportunity in digital transformation for scalability, efficiency, and reach that must be pursued and prioritized. For example, see the insights above about expanded use of asynchronous care.

But while health care leaders—and we at Advisory Board—often talk about 2020 as a tipping for telehealth and digital health uptake, that has not been true for low-income patients, non-White patients, rural patients, or patients with low digital literacy. Populations that the health care system served irregularly through in-person, location-specific interactions have also been poorly served with digital, location-agnostic interactions.

One out of every four Americans may not have the access to technology, access to the internet, or basic digital literacy necessary to participate in video visits.¹³ Digital inequity goes far beyond access to devices and broadband. Deep-rooted issues of affordability, inclusive user experience, and mistrust sustain it.

Investment in digital equity is the only way to realize the full potential of investments in digital transformation. Medicaid reimbursement has been so paltry that at many organizations patients are effectively in a risk-based payment arrangement—unless an organization has excess clinical capacity. Expanding access to and adoption of digital tools can allow health systems to deliver far more efficient care management to populations that suffer disproportionately from chronic disease.

Parting thoughts

Telehealth is a versatile suite of tools that can help solve care delivery problems. Health care leaders must make progress now on truly integrating it into care delivery—simply ramping up the number of virtual visits is not the answer. Consumers are already thinking about telehealth as a way to solve their own problems of access and convenience. Providers and plans can help steer them toward the right digital interactions and the right point in their care journeys, thereby improving access, outcomes, and cost.