Online Care Can Generate New Revenue Streams for Physicians

December 3, 2008

A recent report from Manhattan Research, �U.S. Physician Market Trends,� indicates that approximately 30 million consumers have connected with their doctor online, and an additional 70 million want to do so.

A recent report from Manhattan Research, “U.S. Physician Market Trends,” indicates that approximately 30 million consumers have connected with their doctor online, and an additional 70 million want to do so. However, from a glass-is-half-empty perspective, only one-third of physicians are communicating with patients online. Clearly, supply has not yet caught up with demand. According to Roy Schoenberg, MD, MPH, CEO of American Well Systems (www.americanwell.com), there’s good reason for the delay.

“Most physicians who interact with patients today through electronic means do not get remunerated for it,” says Schoenberg. “If [physicians are] spending 2 hours talking to patients in the evening, no one in their sound mind thinks this is something they should do out of philanthropy.”

Missing puzzle piece

Online care, explains Schoenberg, is literally about paying physicians for their time. Online care is not a doctor in the box where a patient puts in a $20 bill and on the other side it shoots out a prescription and a diagnosis. Online care is about allowing the plans and the patients to buy the physician’s time. In effect, they’re buying 10 minutes of a conversation with a professional person who can help them navigate through the healthcare maze and potentially reach a better way of treating their medical conditions.

“The notion that in order for me to give service to my patients I actually have to take their calls, I have to communicate with them through email even though nobody is going to pay me for this, that is going away,” Schoenberg says. “Online care simply acknowledges that these are highly skilled professionals. Let’s recognize that this is part of healthcare and pay them for it.”

Impetus for change

If health plans need a dollars-and-cents reason to begin to reimburse physicians for online consultations with patients, results of a recent study by Milliman, one of the world’s largest independent actuarial and consulting firms (www.milliman.com), may fit the bill.

The study found that the use of online care for certain prescribed circumstances may result in first-dollar financial savings for employer-sponsored health plans. Specifically, the analysis demonstrated potential medical savings of $3.36 and $6.95 per-member-per-month for commercial and Medicare plans, respectively. The majority of savings came from the potential for shifting of non-emergent emergency room visits and in-person visits to lower-cost live interactions using an online care platform. And the recipients of that volume-of-care shift would primarily be physicians who populate online care.

“The biggest question for physicians from the financial standpoint is going to be, what does that do to my eventual revenue stream?” says Schoenberg. “And if we came to them and said you have to essentially remove yourself from your clinical practice in order to do this, I think that’s going to be a difficult message. But one of the benefits of online care is [that physicians] don’t have to decide between one way of practicing and another way of practicing, because online care is completely built on the notion of flexibility. It really allows you to decide how you want to diversify your revenue stream and potentially your practicing lifestyle.”

Climate for change

The question remains, will physicians be reimbursed for online consultations? Schoenberg believes that, following months of meetings in Washington, DC, with members of Congress, the role of online care in healthcare reform is on the agenda for the next 6 to 12 months. But, more importantly, he explains that there is now a growing understanding that healthcare reform has to embrace technology as more than just electronic medical records.

“We’ve sent one very simple message,” Schoenberg says. “We’ve been using information technology to distribute information—kind of very straightforward, very traditional. What we’re looking at now is an opportunity to use information technology not only to distribute information but to redistribute medical services.”

That means access for the uninsured; solving the shortage of primary care physicians; and resolving the inappropriate balance of healthcare services between the coastal areas and other parts of the country—and using technology to do so.

“That means that people who didn’t have access to healthcare will get in front of physicians, and by the way, those physicians are actually going to get paid for it,” Schoenberg says. “Physicians are going to be able to have much more flexibility, and be able to generate much more appropriate revenue that reflects the kind of work they do with patients. Today it is heavily biased against physicians, and I think that is going to go away.”

Ed Rabinowitz is a veteran healthcare reporter and writer. He welcomes comments at edwardr@frontiernet.net.