Developing a Game-Changing TeleHealth Strategy for Success April 14, 2015 Jay Backstrom & Jeff Jones DISCLAIMER: The views and opinions expressed in this presentation are those of the author and do not necessarily represent official policy or position of HIMSS.
Speaker Introductions Jay Backstrom is a Partner at Subsidium Healthcare, who leads the TeleHealth Center of Excellence. He is a healthcare IT consulting executive with over 22 years of focused experience exclusively in the healthcare industry. Jay has extensive experience in helping clients across the country with developing strategically-focused TeleHealth programs. Jeff Jones is a Senior Manager at Subsidium Healthcare and is focused in innovative TeleHealth, Connected Care and enterprise medical imaging solutions for health delivery organizations. Jeff has consulted with numerous organizations over 17 years to identify, plan, deploy and optimize TeleHealth and imaging services to improve clinical care quality and identify new delivery and revenue opportunities. 1
Conflict of Interest Jay Backstrom, has no real or apparent conflicts of interest to report. Jeff Jones, MS, has no real or apparent conflicts of interest to report. 2
Learning Objectives 1. Provide key TeleHealth trends and considerations for health delivery organizations. 2. Identify TeleHealth service opportunities and keys to integrating the services into the health delivery services strategy. 3. Define exercises and sample criteria for identifying, assessing, and prioritizing the most impactful TeleHealth service opportunities. 4. Compare examples, business models and financial considerations to justify high-priority TeleHealth service opportunities. 5. Identify key factors, lessons learned and core requirements for TeleHealth service success. 3
Benefits of TeleHealth Satisfaction (S) Improved ability to provide care in population health and riskbased models, strengthen competitive position, develop alternative revenue streams and more effective patient engagement Treatment / Clinical (T) Improved patient access to care, improved care quality, proactive care management and reduced readmissions Electronic Information / Data (E) Improved quality measures reporting and increased use of evidence-based guidelines Prevention & Patient Education (P) Avoid hospitalizations and unnecessary care, improved disease management and improved patient care plan education Savings (S) Improved patient care management and care delivery efficiency, increased care volume, reduced length of stay (LOS), reduced travel and transports and more efficient care delivery http://www.himss.org/valuesuite 4
Table of Contents 1. What is TeleHealth and Popular TeleHealth Uses 2. TeleHealth Market Direction 3. TeleHealth Strategy Development for Game Changing Opportunities 4. TeleHealth Services Business Plan Components 5. TeleHealth Considerations 6. Questions 5
What is TeleHealth? TeleHealth: Provides patient care and consultation services over distance that uses a video conferencing technology platform that links patients having specific needs with top physicians / specialists at different locations Helps reduce costs by advancing preventative care models associated with postacute care, chronic condition management, population health management, and patient centered medical home Can be used strategically to target higher reimbursement patient areas, shift referral patterns, improve access to care Integrates patient data throughout the care continuum rather than creating a separate data silo Ensures the patient s care needs are the focus rather than the technology or delivery mechanism TeleHealth is Not: A single sub-specialty application A telephone conversation or fax transmission An e-mail or text message 6
TeleHealth Use Types Synchronous Live, bi-directional interaction between a patient and care provider e.g., video conferencing, patient or provider consultation, health exam, health education & training Store-and-forward Transmission of information to be reviewed / consumed at a later time e.g., clinical results, images, education & training, patient portals Remote Monitoring Medical data collected from patient in a remote location and consumed by a provider in another location for care and care support e.g., biometric data collection for chronically ill patients Mobile Health / Wearables Care supported by mobile devices that promote healthy behaviors, alerts, reminders and care management e.g., weight loss, diet, exercise, vital signs monitoring, behavior health assistance, patient engagement 7
Sample TeleHealth Services There are >100 clinical service lines using TeleHealth. The following is a list of some of the more popular TeleHealth services at health organizations today. Burn Cardiology Chronic Care Management / Remote Monitoring Specialty Consultations Dermatology eicu Education / Grand Rounds Emergency Services / Trauma Fetal Monitoring Home Health / Long Term Care Hospitalist Care Infectious Disease Medication Adherence Nephrology Neurology / Stroke Care Obstetrics and Gynecology Oncology Orthopedics Pain Management Pathology Pediatrics Pharmacy Primary / Urgent Care Psychiatry Radiology Rheumatology Screening Services Urology 8
The TeleHealth Market is Growing! Example TeleHealth Growth Area Market Outlook for TeleHealth States with Parity Laws for TeleHealth States Supporting the FSMB Interstate Medical Licensure Compact Reimbursement for TeleHealth Employer Support for TeleHealth Consumer Support for TeleHealth Venture Capital TeleHealth Investment Sample Outcomes Robust market growth predictions in the U.S. and Internationally 23 states and Washington, D.C. have parity laws; more states are expected this year 6 states have enacted and 11 have introduced compact legislation; more states are expected to enact this year Improving, but much more needs to be done Increased TeleHealth offerings in employer health plans Strong and increasing 2014 was a record year; 2015 is expected to be robust 9
TeleHealth Market Drivers Key drivers for use of TeleHealth include: Economic incentives that focus on population health management and value-based payment models, including: Margin pressures on clinical services Driving new revenue by expanding beyond traditional geographic boundaries Avoiding readmission penalties; TeleHealth directly impacts the Triple Aim of improving the patient care experience, reducing care cost, and improving the health of a population; Doctor and nurse shortages are expected, and will be greater in rural areas; Shifting patient volume from inpatient to more outpatient care; Increased availability of affordable technology (e.g., wearables and smart devices), high-speed bandwidth, and services to engage patients; Changing consumer expectations for more convenient and accessible care; and Non-traditional health providers are entering the market and disrupting care delivery models and care cost structures. 10
TeleHealth: Game-Changer or Threat? TeleHealth can be a game-changer that has low geographical barriers and numerous possibilities. However: Health Delivery Organizations (HDOs) have a small window of opportunity for an early mover advantage in their region New types of regional and national competition are now a greater threat There are minimal barriers to entry in the market A sample of organization types capitalizing on U.S. market expansion opportunities and potential competitors are: National TeleHealth Service Providers National Retailers Cable Companies Pharmacies Disruptive TeleHealth Companies Innovative Physician Practices Regional Providers Expanding Services Academic Medical Centers Marquee Providers Integrated Delivery Networks Community Health Systems Local Physician Practices 11
TeleHealth Stages of Maturity Stage 1 Single Service Focused Stage 2 Multi-Service Focused TeleHealth Stages of Maturity Stage 3 Program Focused Stage 4 Market & Care Delivery Focused Stage 5 Consumer Focused Single service deployed to address a need Siloed clinical care delivery model Limited clinical and business benefits No org structure or governance; departmental sponsorship Multiple independent clinical services to primarily extend care. Siloed clinical delivery care model Some tangible business benefits No org structure. Limited governance. Departmental sponsorship Multiple services aligned with top specialty areas focused on local market Services have limited integration with the existing care delivery models Program has measurable value and provides local market differentiation Central org structure, services-driven governance and executive sponsorship Market-driven, balanced portfolio of services extend beyond local / regional markets Services are integrated within care delivery models Self-sustaining as a business with metricsdriven clinical outcomes and financial results Central organizational structure, enterpriselevel governance and sponsorship Broad and flexible menu of services to address needs within/outside U.S. borders Expands beyond provider markets directly to consumers Services can be integrated within any clinical delivery model Services are productized to be packaged and sold to any health organization or consumer Opportunities to sell data or packaged services to other markets Market Focus Over Past 10 15 Years Current Market Focus Target for Leading Health Providers 12
Developing a Game-Changing TeleHealth Strategy Identify Evaluate Quantify Define Approve Interview & Needs Analysis Determine Services Opportunities TeleHealth Program Development Finalize TeleHealth Plan Project Kick Off Key Stakeholder Interviews Site Visits Historical Reporting / Data Collection for Needs Analysis Assess and Analyze Clinical Service Lines Identify TeleHealth (TH) Opportunities Score & Prioritize Top TH Services Develop Clinical Use Cases and Value Analysis HDO TH Success Stories Validate Top TH Services Develop Market Opportunity Analysis: o o o Operating Model Clinical Model Technical Model ROI Financial Model Org / Governance Model Roadmap Develop Recommendations Review Draft Business Plan with Project Sponsor(s) Finalize Business Plan Present TH Business Plan to Executive(s) for Approval & Funding 13
Sample TeleHealth Stakeholder Interview List Chief Executive Officer Chief Information Officer Chief Medical Officer Chief Medical Information Officer Chief Nursing Officer Chief Operating Officer Chief Patient Experience Officer Chief Strategy and Business Development Chief Technology Officer Chief Quality Officer Ambulatory Services Leader Managed Care Services Leader Director, Clinical Research Director, Emergency Department Director, Trauma Program Director, Transplant Services Cardiologist Neurologist Oncologist Physician Medical Group Primary Care Physician(s) 14
Sample TeleHealth Service Evaluation Criteria Business Size of Market Opportunity Competitive Differentiation Market Expansion Opportunity Access to New Markets Increase Patient Satisfaction Supports Organizational Strategic Priorities Opportunity for Reimbursement / Revenue Area of Competitive Pressure Opportunity to Expand Referral Network & Footprint Enhance Brand & Market Perception Clinical Clinical Care Quality Improvement Opportunity Care Outcome Improvement Opportunity Care Access Improvement Opportunity Improves Communication with Patients / Family Supports Care Standardization Operational Cost Savings / Efficiency Opportunities Care Delivery Optimization Opportunity Decrease Care Cycle Time Regulatory Impacts Improve Physician Recruitment Addresses Physician Shortages Area Where There is a Physician Champion / Executive Support Technical TeleHealth Technology Maturity Patient Ease of Use Integration with the EMR 15
Scoring Service Opportunities with Sensitivity Analysis Standard Scoring Business Sensitivity Operational Sensitivity Clinical Sensitivity Scoring Criteria Total Score Rank Scoring Criteria Total Score Rank Scoring Criteria Total Score Rank Scoring Criteria Weighting 25 Weighting 34 Weighting 32 Weighting 31 Orthopedics 192 1 Orthopedics 264 1 Orthopedics 243 T2 Orthopedics 239 1 Burn & Skin Care 190 2 Burn & Skin Care 258 2 Burn & Skin Care 243 T2 Burn & Skin Care 238 2 Hand Care 181 3 O&P 246 3 Hand Care 231 3 Hand Care 229 3 O&P 178 4 Hand Care 245 4 O&P 227 4 O&P 222 T5 Lip and Palate 176 5 Spine and Musculoskeletal 241 5 Lip and Palate 226 5 Physical Therapy 222 T5 Spine and Musculoskeletal 175 6 Lip and Palate 240 6 Physical Therapy 224 6 Spine and Musculoskeletal 219 6 Physical Therapy 174 7 Physical Therapy 231 T8 Spine and Musculoskeletal 221 7 Lip and Palate 217 7 Clinical Training 172 8 Clinical Training 2331 T8 Clinical Training 220 8 Clinical Training 215 8 Patient Education 161 9 Patient Education 213 9 Patient Education 202 9 Patient Education 204 9 Remote Monitoring 153 10 Remote Monitoring 203 10 Remote Monitoring 190 10 Remote Monitoring 200 10 Radiology 139 11 Radiology 187 11 eicu 179 11 Radiology 175 11 eicu 134 12 eicu 166 12 Radiology 168 12 eicu 172 12 Grand Rounds 123 13 Grand Rounds 162 13 Grand Rounds 151 13 Grand Rounds 156 13 Teaching 112 14 Teaching 152 14 Teaching 138 14 Teaching 133 14 Research 105 15 Research 148 15 Research 129 15 Research 120 15 Long Term Care Mgt. 97 16 Long Term Care Mgt. 123 16 Long Term Care Mgt. 119 16 Long Term Care Mgt. 131 16 Administrative Uses 89 17 Administrative Uses 110 17 Administrative Uses 110 17 Administrative Uses 114 17 Total Score Rank 16
Education Health Management Specialty Care TeleHealth Service Prioritization Scoring Criteria Total Score Rank Primary Care 267 1 Geriatric Care 227 3 Transplant (Follow Up) 204 T6 Clinical Trials (Outreach & Follow Up) 202 8 Specialty Consults 199 9 Cardiology 183 10 Trauma Services / Emergency Care 179 12 OB / Neonatal 177 13 Oncology 175 14 eicu 174 15 Orthopedics 168 T17 Pediatric Surgery 168 T17 Wound Care 163 T22 Pediatrics 163 T22 TeleStroke / Neuro 160 T24 Burn Care 151 25 Dermatology 150 26 Plastic Surgery 146 28 Hand Surgery 144 29 Psychiatry / Mental Health 115 31 Chronic Care 237 2 Medication Management 220 4 Remote Monitoring 204 T6 Post-Acute Care Transition 203 7 Home Health 182 11 Nursing Home Support 166 19 Automate the PCMH 147 27 Screening Services 135 30 Patient Education 167 18 Clinical Training 165 20 Grand Rounds 160 T24 17
TeleHealth Financials Costs Technology Integration Infrastructure Expansion Room Redesign / Build out Building & Deployment Training Ongoing Expenses TeleHealth Clinical Resources TeleHealth Support Team Annual Vendor Maintenance & Support Costs Associated with Increased Scale Revenue and Cost Savings Improved Clinical care quality Improved productivity and efficiency Reduced LOS TeleHealth Reimbursement Reduced Readmissions Reduced / Avoided Financial Penalties Increased Referrals Opportunities: Increased Patient Population / Market Share Served Improved Referrals Avoid care costs / proactive care management Population Health Management Grants 18
Sample ROI and Benefits & Costs Summary Client ABC TeleHealth ROI Summary Pilot 2016 2017 2018 2019 2020 Total TeleHealth Service 1 $ (932,210) $ (1,261,241) $ (182,396) $ 405,344 $ 1,451,656 $ 2,756,032 $ 2,237,185 TeleHealth Service 2 $ (1,656,871) $ (2,799,688) $ (1,343,534) $ 1,954,254 $ 3,817,905 $ 5,347,254 $ 5,319,320 TeleHealth Service 3 $ (631,802) $ (389,298) $ (1,499) $ (54,983) $ 990,363 $ 1,656,436 $ 1,569,217 TeleHealth Service 4 $ - $ (231,397) $ 269,709 $ 624,999 $ 1,135,654 $ 1,760,927 $ 3,559,891 TeleHealth Service 5 $ - $ (448,964) $ (40,046) $ (40,000) $ (40,194) $ (39,569) $ (608,772) TeleHealth Service 6 $ - $ (513,548) $ (176,443) $ (341,909) $ (159,121) $ (183,579) $ (1,374,600) TeleHealth Costs Summary (Capital & Operational costs) Total $ (3,220,884) $ (5,644,135) $ (1,474,210) $ 2,547,705 $ 7,196,263 $ 11,297,501 $ 10,702,240 ROI Analysis $ (3,220,884) $ (8,865,019) $ (10,339,229) $ (7,791,524) $ (595,261) $ 10,702,240 Pilot 2016 2017 2018 2019 2020 Total TeleHealth Service 1 $ (1,291,051) $ (2,404,576) $ (4,599,257) $ (6,291,485) $ (9,520,126) $ (13,262,614) $ (37,369,109) TeleHealth Service 2 $ (1,903,815) $ (5,222,087) $ (5,677,971) $ (4,385,771) $ (4,009,327) $ (4,051,130) $ (25,250,101) TeleHealth Service 3 $ (697,623) $ (834,748) $ (644,405) $ (1,988,805) $ (1,903,851) $ (2,432,381) $ (8,501,813) TeleHealth Service 4 $ - $ (736,880) $ (380,059) $ (337,946) $ (381,036) $ (426,695) $ (2,262,616) TeleHealth Service 5 $ - $ (429,000) $ (54,000) $ (44,000) $ (44,000) $ (44,000) $ (615,000) TeleHealth Service 6 $ - $ (586,012) $ (323,358) $ (732,847) $ (740,658) $ (1,067,382) $ (3,450,256) TeleHealth Benefits Summary (Revenue & Savings) Total Costs ($3,892,489) ($10,213,302) ($11,679,051) ($13,780,854) ($16,598,997) ($21,284,202) ($77,448,895) Pilot 2016 2017 2018 2019 2020 Total TeleHealth Service 1 $ 358,841 $ 1,143,335 $ 4,416,861 $ 6,696,828 $ 10,971,782 $ 16,018,646 $ 39,606,294 TeleHealth Service 2 $ 246,944 $ 2,422,399 $ 4,334,437 $ 6,340,025 $ 7,827,232 $ 9,398,384 $ 30,569,421 TeleHealth Service 3 $ 65,820 $ 445,450 $ 642,906 $ 1,933,823 $ 2,894,214 $ 4,088,817 $ 10,071,030 TeleHealth Service 4 $ - $ 505,483 $ 649,768 $ 962,944 $ 1,516,690 $ 2,187,622 $ 5,822,506 TeleHealth Service 5 $ - $ (19,964) $ 13,954 $ 4,000 $ 3,806 $ 4,431 $ 6,228 TeleHealth Service 6 $ - $ 72,464 $ 146,915 $ 390,937 $ 581,537 $ 883,804 $ 2,075,656 Total Benefits $671,605 $4,569,167 $10,204,841 $16,328,559 $23,795,261 $32,581,703 $88,151,135 19
Sample TeleHealth Financial Summary Client ABC Financial Model - TeleHealth Program Financial Model - TeleHealth Program Revenue & Savings 2015 (Pilot) 2016 2017 2018 2019 2020 Totals Total Revenue & Savings $ 86,010 $ 1,133,422 $ 2,230,834 $ 4,530,479 $ 6,931,439 $ 10,395,972 $ 25,308,157 Costs 2015 (Pilot) 2016 2017 2018 2019 2020 Client ABC Home Office Costs Total Home Office TeleHealth Costs $ 1,708,038 $ 4,604,150 $ 5,566,688 $ 3,186,718 $ 3,278,420 $ 3,372,872 $ 21,716,885 Client ABC Hospital Costs Total Hospital TeleHealth Costs $ 184,000 $ 1,407,800 $ 471,800 $ 221,800 $ 136,800 $ 136,800 $ 2,559,000 Total Costs (Capital & Operational) $ 1,892,038 $ 6,011,950 $ 6,038,488 $ 3,408,518 $ 3,415,220 $ 3,509,672 $ 24,275,885 Labor Cost $ 425,938 $ 4,146,250 $ 5,336,688 $ 3,056,718 $ 3,148,420 $ 3,242,872 $ 19,356,885 Net Cash Flows $ (1,806,028) $ (4,878,528) $ (3,807,653) $ 1,121,961 $ 3,516,220 $ 6,886,300 Cumulative Cash Flow $ (1,806,028) $ (6,684,556) $ (10,492,209) $ (9,370,247) $ (5,854,028) $ 1,032,272 20
Common TeleHealth Challenges Federal and State Regulations: State licensure and using telemedicine across state lines Reimbursement: Medicare Medicaid Commercial payers Physician adoption of TeleHealth Standardizing TeleHealth tools, processes and procedures, protocols and practices Ensuring that TeleHealth expands partnerships and opportunities Compliance with TeleHealth standards and processes Integrating TeleHealth into daily care processes Data security and HIPAA compliance 21
State (Support of TH) State TeleHealth Coverage and Support TH Parity Law in Place When? TeleMental Coverage TeleHome Coverage Remote Monitoring Store & Forward State (Overall Score) Defined by State Informed Consent Req. Physician- Patient Encounter Live Video Reimb TelePresente r Email / Phone / Fax Reimb Cross-State Licensing 22 Licensure & Out of State Practice Medicaid Program Location Defined Online Prescribing State (MD Composite Grade) Alabama X X Y U Alabama Y Y Y N N Y N Alabama Alaska X X X X Alaska Y N Y N N N N Alaska Arizona X 2013 X X U X Arizona Y N Y N Y Y N Arizona Arkansas X Arkansas Y N Y N N Y N Arkansas California X 1996 X X California Y Y Y N N Y N California Colorado X 2001 X X X Colorado N Y Y N N N N Colorado Connecticut PPB Connecticut N N Y N N N N Connecticut Delaware X Delaware Y N Y N N Y N Delaware District of Columbia X 2013 District of Columbia N N N N N N N District of Columbia Florida PPB Florida Y Y Y N N Y N Florida Georgia X 2006 X Georgia Y Y Y N N Y N Georgia Hawaii X 1999 X Hawaii N N N N N N N Hawaii Idaho X Idaho Y Y Y N N Y N Idaho Illinois PPB X X Illinois Y N Y N Y Y N Illinois Indiana X X Indiana N Y Y N N Y N Indiana Iowa PPB Iowa N N N N N N N Iowa Kansas X X X Kansas Y Y Y N N N N Kansas Kentucky X 2000 X X X Kentucky N N N N N N N Kentucky Louisiana X 1995 X X Louisiana Y N Y N N N Y Louisiana Maine X 2009 X Maine Y Y Y N N N Y Maine Maryland X 2012 X Maryland Y Y Y N N Y N Maryland Massachusetts PPB X X Massachusetts N N N N N N N Massachusetts Michigan X 2012 X Michigan Y N Y N N Y N Michigan Minnesota X X X X Minnesota Y N Y Y N Y N Minnesota Mississippi X 2013 X X X Mississippi N N N N N N Y Mississippi Missouri X 2013 X Missouri Y Y Y N N Y N Missouri Montana X 2013 X Montana N N Y N N Y N Montana Nebraska PPB X Nebraska Y Y Y N N Y N Nebraska Nevada X Nevada Y N Y N N Y N Nevada New Hampshire X 2009 New Hampshire N N N N N N N New Hampshire New Jersey X New Jersey N Y Y N N N Y New Jersey New Mexico X 2013 X X New Mexico N N N N N N N New Mexico New York PPB X X X New York Y N Y N N N N New York North Carolina X North Carolina Y N Y N N Y N North Carolina North Dakota X North Dakota N N Y N N Y N North Dakota Ohio PPB Ohio N N Y N N N N Ohio Oklahoma X 1997 X X Oklahoma Y N Y N N Y N Oklahoma Oregon X 2009 X Oregon Y N Y Y N N N Oregon Pennsylvania PPB X X X Pennsylvania Y Y Y N N N N Pennsylvania Rhode Island PPB Rhode Island N N N N N N N Rhode Island South Carolina PPB X X X South Carolina Y N Y N N Y N South Carolina South Dakota X X X South Dakota Y N Y N N N N South Dakota Tennessee X 2014 Tennessee Y Y Y N N N N Tennessee Texas X 1997 X X X Texas Y N Y N N Y N Texas Utah X X Utah Y Y Y N N Y N Utah Vermont X 2012 X Vermont Y N Y N N Y N Vermont Virginia X 2010 X Virginia Y N Y N N Y N Virginia Washington PPB X X X Washington Y N Y N N Y N Washington West Virginia PPB X West Virginia Y Y Y N N Y N West Virginia Wisconsin X X Wisconsin Y Y Y N N N N Wisconsin Wyoming X Wyoming Y Y Y N N Y N Wyoming Legend State supports the use of TeleHealth State is mostly supportive of TeleHealth with some challenges Source: American Telemedicine Association State is somewhat supportive of TeleHealth State is NOT supportive of TeleHealth 22
Key TeleHealth Program Needs Strategy and plan for the TeleHealth Program A clear owner of the TeleHealth program and services Organizational structure to deploy, operate and support the program Defined program implementation plan and dedicated implementation team Physician buy-in and adoption Defined performance metrics that are proactively tracked and reported Technology and process training Reliable technology with a knowledgeable support team Necessary technical infrastructure and interoperability Data security Critical planning emphasis needs to be on the operational, clinical, and business impacts of TeleHealth. Technology is important, but not the primary driver. 23
Key Areas to Address for Success Position TeleHealth as a game changing strategic initiative directly aligned with the organization s mission, strategy and clinical direction Create a balanced portfolio of TeleHealth services Focus on physician adoption and workflow optimization Stratify the patient population and proactively manage the sickest and highest risk patients with TeleHealth care management models Directly integrate TeleHealth services into existing care delivery models Create a central TeleHealth organization with enterprise-level governance and executive sponsorship Develop a single, integrated TeleHealth IT platform with standards for clinician and patient access devices, accessibility methods and usage patterns 24
Questions? Jay Backstrom Partner, Subsidium Healthcare jbackstrom@subsidiumhealthcare.com Jeff Jones Senior Manager, Subsidium Healthcare jjones@subsidiumhealthcare.com 25