Policy implications for the virtualization of health services

Virtual care (where the provider and patient are separated in space and sometimes in time) is a natural next step in technological innovation for healthcare. Increasing care virtualization has the potential to improve quality of life for patients while increasing the healthcare system’s efficiency but it presents substantial challenges for clinicians and policy makers.  The purpose of this article is to outline those challenges and identify possible solutions.

Even the most successful innovations have presented challenges for policy makers and clinical leaders.  We start with two recent examples to illustrate these challenges:

1)      H. Pylori and the 90%+ reduction in gastric ulcers:  In 1984, Nobel winner Barry Marshall drank a beaker of H. Pylori and proved the connection between the bacterium and gastric ulcers. As late as 1989, management of peptic ulcer disease was a $6 bn cost to US healthcare and surgical management of bleeding ulcers was one of the most common general surgical procedures.  Now, due to medical therapy for H.pylori, surgical management is a rare event for which academic hospitals have to find the “old guys” to do them.  From a policy point of view:

• It took ten years for the knowledge to propagate to the general medical community.
• There is still an active and legitimate debate about the appropriateness of treating asymptomatic H. Pylori infection (which has been linked to stomach cancer as well)

2)      Digitization of Radiology: In 2003, Canada Health Infoway committed about a quarter billion dollars to building Diagnostic Imaging Patient Archival Systems (DI/PACS) across Canada.  These systems are now ubiquitous across Canada and increase the productivity of radiologists dramatically (Nenadaovic et al 2008).  Richard Alvarez, Infoway’s CEO, is fond of saying that this intervention has created capacity equivalent to 500 “virtual” radiologists.  Assuming a virtual radiologist cost the same as a real radiologist that is a $300Mn+ increase in health expenditures.  From a system point of view:

• Prices for images have not declined as fast as quantity has risen.  This has resulted in steadily escalating total costs
• There is some fear that the expansion of capacity has resulted in an increase in inappropriate imaging.

And these were clear cut cases.

We now face a rapidly digitizing healthcare system in which credible senior people believe that 25% of all health services will be virtual by 2020 (Dr. Ed Brown, ATA president, OTN CEO).  This projection is backed up by US data at leading centers:   Kaiser Permanente – Northern California reported 10.5 million virtual visits in 2013, and projects that virtual visits will exceed in person visits by 2016. Similarly, the VA has recently partnered with Kaiser as part of a strategy to prioritize virtual medicine[i].

Virtualization of the patient-provider interaction creates opportunities and service improvements for providers and their patients.  Removing physical contact can make care delivery faster and more convenient. For caregivers, patients can be “seen” in less time and asynchronous interactions allow for better time organization.  Exact estimates vary by type of service but doubling and even quadrupling of “visits” has been reported.  Compiling requests and results for asynchronous review and response can increase the efficiency of the patient interaction even further.

For patients, the need for travel time is reduced dramatically and the quality of the “waiting room” is greatly improved. A 2012 Conference Board of Canada study sponsored by Infoway estimated that the average citizen spends a total of three hours getting to, waiting for and then returning from a 10-15 minute appointment.   A new BC virtual video provider (Medeo) reports that their set-up and waiting time for an established patient is averaging 50%-100% of the actual encounter time.  This is a 10x improvement in the value for citizens. The loss of intimacy is balanced by less need to travel, speed of interaction and reduced exposure to the waiting room environment.  Recent studies by both PwC and Infoway have confirmed that Canadians want virtual access to their care providers.

These new modalities present challenges for policy makers – particularly in a fee-for-service environment.  The remainder of this essay outlines nine key challenges with suggestions for addressing them:

1)      Lowering prices for higher throughput virtual care: Virtual care increases throughput. This works well in capitated primary care practices as the Kaiser results suggest.  In specialty care, the first two virtual OHIP codes introduced at the last negotiations) for Dermatology and Retinal scans were set at 55% of the physical fee code based on a presumption of 2x volume increase.  This is an improvement on the radiology experience of the past decade but a more nuanced policy approach will be needed if 25% of care is to be delivered in this way.  Some form of envelope –based reimbursement would control total spending in the specialty and reduce fee levels as volumes increase.

2)      Queue reduction and total system costs: Queues control access and limit quantity of service; their removal removes this control point.  Waiting for an appointment creates an opportunity cost to see a health provider – often a considerable non-financial burden.   Removing this barrier increases system access but also system costs. Technology improvements have sent spending spiral higher for technology heavy specialties including radiology, ophthalmology and cardiology.  “Productivity gains” have caused short term pain for health budgets because fixed fee schedules don’t have any way of coming down when “productivity” goes up.

3)      Queue reduction and appropriateness: Limited schedule availability requires that physicians prioritize their cases. Whether by objective or subjective criteria prioritization through physician judgment improves appropriateness even if it reduces timeliness.  Policy makers implicitly rely on queues to choose among cases requiring treatment or access to diagnostics.  The opposite may also be true and the elimination of the wait list may induce demand that would otherwise have not been included as a system cost.   Creating a choice to provide more service will mean that we must choose wisely.

4)      Short-term impact of queue shortening: Technology improvements like virtual care may increase throughput appropriately in the short term and this creates a temporary increase in spending where there is a large existing queue. This effect occurred in Ontario when wait times were reduced in the mid-2000s (e.g. cataract surgeries circa 2007-9).  This is appropriate and the healthcare system needs to find the funds to pay for this. Tracking the one-time impact will help to make sense of true underlying service demand.  Not doing so creates a volume spike in one year followed by an apparent reduction in the following year. This can be incredibly confusing and frustrating for the health system and the public it serves.

5)      Quality and Virtual Care: New modalities will require new quality standards as virtual care becomes normal practice. They will also provide new opportunities for direct monitoring of practice patterns and care quality. We do not yet know all of the ways in which virtual care will improve quality but there are many early Ontario examples including:  post-surgery wound care (WCH), mental health through telemedicine (OTN, MSH), Cardiac care (UHN/OTN), pain management (HSC), and COPD (St. Joe’s-Hamilton).  More frequent and immediate care virtually will create opportunities for care innovation and new systems of quality monitoring.

6)      Virtual Care Continuity and Coordination: Quality standards should clearly spell out the responsibilities of the provider to deliver virtual care, how the virtual visit will be incorporated back into the permanent patient record, the circumstances that would require a face to face visit, and metrics to track performance. Without these standards, there exists the possibility that virtual care may compromise care for patients and undermine the physician-patient relationship.  While virtual visits may replicate the convenience of the physical walk-in clinic we should not allow them to replicate the lack of coordination and care integration that has occurred in that system.

7)      Drug-seeking behaviour:  In the early years virtual care should not be used for narcotics and other controlled substances unless the provider of care has an existing (physical) relationship with the patient.  Even then those prescriptions should be subject to review.

8)      Fraud and Abuse:  Payment will require open review of any billings fraud and abuse.  Virtual care will have time stamps as to duration of visit and the results must be recorded in a medical record.  Health payers should insist on the ability to have a second physician monitor suspect practice patterns.

9)      Barriers to adoption of the new standard of care:  Established policy and programs sometimes run counter to the adoption of these innovations. In particular, our fee for service system has an inherent bias against virtual services.  Care happens (and is billable) when hands are laid on the patient.  Similarly hospitals are paid for footfalls.  These historical systems need a comprehensive review to ensure parity of virtual and physical care.  Physical contact will still be required for many medical services but where it is not clinically needed it should not be continued simply as a queuing mechanism to allow for cost control.

We are entering an exciting time in medicine.  Virtual care has the potential to dramatically improve the lives of patients and caregivers.  Canada is already leading the way through organizations like Ontario Telemedicine Network and through the recent moves by the BC government to allow secure virtual care from any location to any location to be billed under the fee schedule.  A path to a sustainable public health system is now in view.  Let’s prepare ourselves well for the journey ahead.