Virtual-first health plans (VHPs) are health insurance products that encourage patients to use virtual care first whenever possible. They often have lower premiums or $0 copays for virtual visits to encourage virtual care utilization. Most plans and employers that offer VHPs do so by partnering with a third-party vendor, rather than a traditional hospital system.

VHPs use technology to deliver primary care in a way that is accessible, convenient, and cost effective to both members and health plans. If utilized optimally, they can substitute for unnecessary in-person visits or influence downstream care at a reduced cost to the ecosystem.

The COVID-19 pandemic has accelerated the adoption of telehealth nationwide. However, even before COVID-19, health plans were expanding virtual options in order to appeal to cost-conscious, technologically savvy consumers. The pandemic led many consumers to try virtual visits for the first time. Generally, consumers have reacted positively to the virtual experience, so health plans are using this opportunity to experiment with VHP products.

Structuring products around a core virtual primary care service seems to be an ideal next step in guiding cost-effective care delivery. But health plans must consider how their broader provider network will react to the plan steering patients to virtual care. Creating VHPs also involves balancing consumer expectations for the low-cost virtual care available through vendors with local providers’ needs for sufficient reimbursement.

Virtual-first health plans (VHPs) are health insurance products that encourage patients to use virtual care first whenever possible. They often have lower premiums or $0 copays for virtual visits to encourage virtual care utilization. Most plans and employers that offer VHPs do so by partnering with a third-party vendor, rather than a traditional hospital system.

These products are still relatively new because they started appearing during the COVID-19 pandemic when telehealth utilization increased. A Mercer survey found 7% of employers currently offer a VHP, and another 7% are considering it. Most employers say they are waiting to understand the benefits of VHPs more before they offer one to their employees.

Little strategic differentiation exists when comparing one health plan’s virtual-first product to a competitor’s product. They tend to all offer a combination of $0 virtual visits with in-network referrals. Furthermore, a plan’s dedicated virtual-first product may lack differentiation when compared to the plan’s other offerings. Many plans already provide virtual visits and virtual primary care as a benefit with existing products. While these options may be available at a lower cost to members on a virtual-first plan, some of these products simply rebrand benefits plans already offer. An opportunity exists for plans to differentiate their virtual-first products, both internally and externally, through additional offerings such as wearable devices or access to home-based care.

Cost savings potential: Medium
VHPs can substitute for unnecessary in-person visits or influence downstream care at a reduced cost to the ecosystem, by steering care toward low-cost, in-network options. While data has emerged showing virtual-first products — when done well — can boost access to care and improve member experience, they haven’t yet garnered clinical and cost-saving benefits that are more longitudinal in nature. Time may show that virtual-first products can deliver on these promises.

Employee palatability: High
Employee palatability with VHPs is high because these are still optional for employees, so only employees who want virtual-first health care would opt in for these products. Also, gatekeeping is not yet strict for VHPs; members usually are not denied when they do try to access in-person care. For members, these products can increase access to convenient virtual care and engaging digital platforms, so satisfaction ratings are high for those who appropriately enrolled in these products.

Administrative ease: High
Compared to other cost-containment strategies, virtual-first health plans are relatively easy to implement for plans and employers that have existing virtual care capabilities. Most plans with a virtual-first product have turned to third-party providers to offer virtual care. Companies like Teladoc and Amwell already have physicians staffed around the clock and offer a digital infrastructure that can support a plan’s utilization goals. These third-party providers can also integrate their services with the plan’s network, referring members to downstream care with affiliated providers.

Who's doing what

Humana

Health plan covering 5 million lives

Doctor on Demand

Telemedicine company

Humana implemented a virtual primary care product through their partnership with Doctor On Demand called On Hand. The plan gives patients access to a dedicated virtual primary care provider, through Humana or Doctor On Demand’s network.
 

Strategy 1: Integrating network into third party app

On Hand, Humana’s offering with Doctor On Demand, was the first major commitment into virtual primary care. It became available in 2020 to Humana’s self-funded plans in eligible regions and is marketed as a low-cost alternative to Humana’s other plans. Its premiums are about half the cost of Humana’s most popular purchased plan. On Hand members can access care through Doctor On Demand’s Synapse platform. One notable feature of this platform is that it allowed Humana to integrate its existing provider network with Doctor on Demand’s network. This enables consumers to continue long-term relationships with their current providers, while also broadening access to a new pool of providers through Doctor On Demand’s network. If needed, referrals for in-person care downstream are sent to in-network Humana providers.

Who's doing what

Premera Blue Cross

Health plan covering 2 million lives

98point6

Telemedicine company

Premera’s partnership with 98point6 uses the combination of a pre-appointment AI assistant and dedicated 98point6 provider to administer a member's long-term care. The care is primarily provided through in-app text messaging.
 

Strategy 2: Utilizing vendor-only network

Premera’s newest low-premium virtual care product, Premera NOW, is accessible to employers in the Washington market for the first time in 2020. Members access the virtual visit through their Premera NOW app, which operates on the 98point6 platform. What makes this product unique is its technology-first component.

At the start of the visit, an automated assistant, rather than an actual provider, gathers information on symptoms and if needed, collects photos. Then an assigned 98point6 provider reviews the case and provides diagnosis and treatment over in-app text messaging. The product uses 98point6 providers for the virtual component but allows for in-network follow-up for in-person care through referrals. The virtual care component is 100% covered and aims to get consumers to always start their care through their app. In all issues besides emergent care, the member knows to use the app as their “one stop shop.” This funneling of members through a virtual platform allows the plan to steer members to more efficient sites of care while also allowing members the ability to make an informed decision on the quality of the provider they choose.

Priority Health, a health plan in Michigan, is partnering with Doctor On Demand to offer a virtual primary care plan to families living in the plan’s “My Priority” service areas in 2021. Members who enroll in the MyPriority Telehealth PCP plan receive an assigned PCP through Doctor On Demand. This provider, who can deliver services for primary care, urgent care, behavioral health, and chronic or preventive care conducts all appointments virtually. If the member needs in-person care, their virtual provider can provide a referral to a high-quality, low-cost provider in the Priority Health HMO network, staying true to that plan design. A care coordinator can help members choose and schedule a visit with the referred provider. Fitting within the traditional plan HMO structure, this plan leverages the virtual component to encourage utilization among those without a PCP or those who want to avoid in-person care.

Who's doing what

Alignment Healthcare

Medicare Advantage Plan covering 50,000 lives

Alignment Healthcare’s Medicare Advantage plan focuses on providing concierge services to their senior population. It offers a virtual plan that builds on their ACCESS On Demand platform.
 

Strategy 3: Building on health plan platform

Alignment Healthcare has launched a Virtual Medicare Advantage plan aimed at providing personalized, accessible care to its senior members. The plan utilizes the payer’s own ACCESS On-Demand Concierge platform. It features access to providers 24/7 and a dedicated concierge team that provides two-way consumer engagement — by servicing inbound calls and actively reaching out to patients. What makes Alignment successful is the Alignment Virtual Application (AVA), which pulls real-time data from a member’s care journey including prescriptions, facility admissions and treatments. This allows the dedicated clinician to have the most up-to-date information and prevent them from duplicating any procedures or treatments.

Every member opting into this plan receives a high-touch onboarding process that designates an assistant to enrollees so they can become familiar with their benefits. In addition, if members do not have the technology required to participate in this plan, Alignment will provide it for them. Providers in the Alignment network are also not restricted to virtual visits but can provide in-person or at-home care if deemed necessary.

Oscar Health, a pioneer in the tech-driven health insurance arena, launched a virtual primary care product in Texas and has plans to expand to other markets through 2021. The insurer builds on its Oscar Care offerings, utilizing the Oscar Medical Group providers to deliver personalized longitudinal primary care to members. There is no cost to the member for virtual visits and initial specialist referrals prescribed by an Oscar provider giving the payer more control of downstream care. Oscar also provides members with kits to monitor their vital signs, as well as access to in-home lab draws, greatly reducing the need for in-person visits overall. Oscar’s virtual primary care offering is another tool in their suite of low-cost, technology-reliant health plan products. This plan greatly reduces member cost sharing — in most cases the member pays nothing. At the same time, it allows Oscar to control a member’s initial care interaction and routes them to the most efficient option downstream.

Uptake is still low for these relatively new plans. By virtue of their novelty, virtual-first products are generally not well understood by both members and providers. Because these products are new and the goal right now isn’t to get everyone on these plans, uptake is still a small fraction of the entire membership. For those who do enroll, plans must proactively communicate exactly what the virtual-first product offers, what the expectation is for seeking virtual or in-person care, and how that expectation changes in emergency situations.

Gatekeeping is loose because plans don’t want to burn members with their first experience. Plans and purchasers would see faster cost savings if members in a VHP must use virtual care first. Most plans aren’t strict with their gatekeeping because they don’t want to burn members who are new to using virtual-first health plans. 

Virtual-first plans alone won’t lead to cost savings without coordinated downstream care. Plans want to use telehealth platforms to transition members to in-network, high-value providers for in-person care, but significant barriers exist. Members might not go to the in-person follow up care, and even if they do, they won’t have a good experience if the virtual primary care physician can’t share notes with the in-person physician and vice versa to close the referral loop.

There are three future-facing questions we are watching for VHPs:

1.    How widespread will VHPs become?

VHPs could stay a niche product only a small subset of members use because they self-select into them. On the other hand, plans and employers could invest in these to the point where all employers have a virtual-first option and virtual-first becomes the default. This will depend on how many services can be delivered virtually, how seamless patients find the transition to in-person care, and how popular these products are with members.

2.    Will traditional providers get involved?

While most VHPs are currently delivered by third-party vendors, traditional providers, such as hospitals, are entering into virtual primary care. University of Pittsburgh Medical Center (UPMC) offers virtual first primary care, staffing doctors from across Central Pennsylvania. Satisfaction scores remain at 90%+, on top of a 50% decrease in ER utilization. Also, ChristianaCare is launching a virtual primary care program that covers video visits and text messaging for $35 per month. Whether plans will create VHPs with these traditional providers will depend on if these providers are open to steering to lower-cost sites of care.

3.    Can more care be delivered virtually?

Virtual-first health plans are still limited by what care can be delivered virtually, but technological advancements are increasing what’s possible. For example, virtual stethoscopes allow remote providers to check vitals. Virtual dermatology is a growing area of medical technology that uses digital imaging and telemedicine to diagnose and treat skin conditions. Oshi Health is an example of a vendor specializing in virtual specialty care; they have a comprehensive specialty care team to support a variety of gastrointestinal conditions.

Given the technological nature of telehealth, plans first thought virtual-first products would mostly attract young, educated, and healthy members. But with a couple years of market research under their belts, plans found a wide range of member subgroups were interested in and utilizing virtual-first products. Organizations with large groups of these types of individuals listed below should consider VHPs.

Target markets for VHPs

• Older adults who don’t want to travel for care
• Members with chronic conditions who need frequent care
• Mothers who want immediate answers for their young children
• Employees who travel often for work
• Hourly-wage workers who value affordability over all else
• Members in rural areas far from many primary care providers

Once you think that a VHP would be right for your organization, you will most likely need to look for a VHP partner. To launch a VHP, organizations need to look for these qualities in a partner:

1. Sophisticated digital architecture
2. Accessible, whole person care
3. Care navigators and concierge services
4. Seamless transition to in-person care

Read more details in our report: Four capabilities health plans are looking for in a virtual-first primary care partner.