Providers continue to invest in telehealth even as health systems pursue major brick-and-mortar expansions.
Telehealth utilization has cooled since the COVID-19 pandemic, when providers and investors pumped billions of dollars into readying the virtual care infrastructure to try to keep up with burgeoning demand. Health systems are still hopeful those investments will pay off even as they balance inpatient and ambulatory expansions, low-acuity care shifts back to outpatient sites and uncertainty looms over telehealth reimbursement, executives said.
Related: Congress passes telehealth, hospital-at-home funding bill
“There may be some sunk costs with telehealth, but it doesn’t get close to what health systems are investing in brick-and-mortar facilities,” said Andrew McDonald, shareholder at consultancy LBMC.
An aging population with complex care needs is stretching health system capacity, requiring providers to expand both in-person and virtual care options, health system executives said. As organizations map out projects that will add millions of square feet to their inpatient and outpatient networks, providers are confident they will be able to fill that space while continuing to treat more patients via telehealth.
Sutter Health, for instance, plans to open more than two dozen ambulatory care centers across Northern California by 2027. Meanwhile, the Sacramento, California-based health system is ramping up remote monitoring technology to improve chronic disease management and outfitting ambulatory care sites with telehealth capabilities, said Laura Wilt, chief digital officer at Sutter.
“Our belief is that health systems can have the virtual and physical care experience work together,” she said. “There will always be a need for in-person care, but other things lend well to virtual care.”
Health systems have reworked operations to accommodate more telehealth patients. Providers have hired staff to track data linked to virtual care and remote patient monitoring. Hospitals and clinics have added cameras and other infrastructure to patient rooms to facilitate remote consultations. Some systems set up clinics dedicated to virtual care. Clinicians have reworked their schedules to fit more telehealth patients into their daily rounds.
Providers are tweaking care models as telehealth utilization fluctuates, often based on patient and physician preferences. Virtual visits increased exponentially during the COVID-19 pandemic, but utilization has leveled off over the past several years.
Health system executives estimate virtual visits have increased between 5% and 10% over the past year, and are planning for continued growth in areas like primary care and behavioral health.
However, national telehealth use dropped to 3.77% of claim lines in 2023, from 3.89% in 2022, according to the most recent data from FAIR Health, a healthcare data company. If virtual visits stagnate or decline, health systems may have to absorb some of the costs of underutilized technology, industry observers said.
Still, any increase in access via telehealth trumps return on investment, health system executives said.
“We are just trying to increase access, whether that’s virtual or in-person care, because demand for services is so incredibly high,” said Dr. Susan Huang, chief physician executive for Providence, which is based in Renton, Washington.
Providence has steadily been growing virtual care options in its physical therapy clinics and other outpatient sites, its consumer-facing telehealth software ExpressCare Virtual and chronic disease management through remote patient monitoring, Huang said.
Sanford Health and Novant Health are pursuing similar strategies.
Sanford last year opened a $40 million, 60,000-square-foot virtual care center, where clinicians can connect directly to patients in remote satellite clinics. The Sioux Falls, South Dakota-based health system repurposed an underutilized clinic in Lidgerwood, North Dakota, where nurses help connect patients to specialists via video. Sanford is also rolling out a virtual radiology program, where radiologists can read scans remotely from a centralized location, said Dr. David Newman, chief medical officer for virtual care at Sanford.
“It was a huge operational lift to make all our sites telemedicine capable,” he said. “Virtual care is a way for our patients to get care in a hybrid manner and offer some work-life balance for our providers.”
Novant is also equipping patient rooms with cameras and other virtual care infrastructure, especially in hospitals and clinics located in rural communities where specialists are scarce, said Meghan Huffman, vice president of digital health and engagement at Novant Health, a nonprofit system based in Winston-Salem, North Carolina. Telehealth-enabled care has helped increase access to behavioral health, maternal health and primary care, she said.
“We’re committed to extending and expanding our digital health services offering,” Huffman said.
Long-term telehealth adoption and utilization may hinge on reimbursement.
Some health systems invested in virtual care under the expectation the federal government would codify COVID-19-era temporary pay policies and regulations. Those waivers include expanded Medicare reimbursement for services clinicians provide remotely, removing geographic site restrictions for virtual care, permitting audio-only telehealth services and delaying the in-person requirement for tele-behavioral health patients. Congress in February extended those policies until September, but health system leaders are waiting to see if another temporary — or permanent — resolution is on the horizon.
“If Medicare reimbursement would’ve gone away, we may have had to shut down our tele-ICU program,” Huffman said. “However, we know we are still doing the right thing by providing telehealth services, even if we run into Medicare reimbursement issues.”
Not all hospitals and health systems have the financial flexibility to maintain telehealth services if reimbursement declines. Access to care could drop, particularly in rural areas, if reimbursement adjustments force providers to discontinue services.
“Big systems can lean into this. Sanford is an integrated system that is financially responsible for a large percentage of patients in our health plan,” Newman said. “But if a health system doesn’t have skin in the game like us, access might go away for those patients.”
