Telehealth 2.0 – Why Would Businesses Do It for Zero Savings?

This is part 6 of the series on the WellAI’s health cost savings calculator for CEOs, CFOs, heads of HR and heads of benefits.  Today we will explain how cost savings from a product like WellAI’s data-driven Telehealth 2.0, are calculated, and why zero savings (unlikely, but hypothetically possible) may not necessarily mean you would want to stay with your old generation telehealth.

In one of our previous blogs ‘Telehealth 2.0’ we explained how WellAI envisions the future of telehealth.  In fact, with WellAI’s Telehealth 2.0, the future is getting closer.  As we had described in that blog, WellAI’s Telehealth 2.0 is the next gen telehealth because the WellAI teledoctors are equipped with the most up-to-date AI health technology.  The WellAI teledoctors are trained for efficiency and have instantaneous access to scientific information.  By the time a patient gets to talk to a WellAI teledoctor, the doctor has patient’s AI-based questionnaire, with questions and patient’s answers, from the AI-based onboarding process, as well as patient’s history via a compact visual tool called ‘concept cloud’.  The process is quick, efficient, evidence-based.  Do you think an ER doctor would want to comprehend patient’s history in 2 seconds, as opposed to 2 minutes, using the concept cloud?

Now let’s discuss whether this next gen Telehealth 2.0 actually saves money for employers.  I start with the literature review, and then use results from this review as inputs to the WellAI’s Health Cost Savings Calculator for Employers to estimate the savings, if there are any.

In a 2015 case study, Darkins et al conducted a retrospective analysis of the 2009–2012 Veterans Health Administration (VHA) data and  assessed the efficacy of care coordination home telehealth (CCHT), a model of care designed to reduce institutional care.  Outcomes for 4,999 CCHT–non-institutional care (NIC) patients were compared with usual (non-CCHT) care in a matched cohort group (MCG) of 183,872 Veterans.   Subsequent analyses after 12 months of CCHT-NIC telehealth enrollment showed mean annual healthcare costs for CCHT-NIC telehealth patients fell 4%, from $21,071 to $20,206, whereas the corresponding costs for MCG (non-telehealth) patients increased 48%, from $20,937 to $31,055.  On the other hand, higher mean annual pharmacy expenditure of 22% ($470 over baseline) for CCHT-NIC telehealth patients versus 15% for MCG (non-telehealth) patients ($326 over baseline) was attributable to the medication compliance effect of better care coordination. Several healthcare cost drivers (e.g., ER visits and admissions) had sizable declines in the CCHT-NIC telehealth group.  Prefinal case selection criteria analysis of both cohorts yielded a 9.8% mortality rate in telehealth patients versus 16.58% in non-telehealth patients.

A 2016 meta-analysis study by Kelly et al analyzed the effect of telehealth interventions in the long-term management of chronic diseases.  A total of 25 studies were included, involving 7,384 participants.  The authors concluded that telehealth-delivered dietary interventions targeting whole foods and/or dietary patterns can improve diet quality, fruit and vegetable intake, and dietary sodium intake.  The authors also suggested that when applicable, telehealth-delivered interventions should be incorporated into health care services for people with chronic conditions.

In a 2018 meta-analysis study of 14 articles, Lee and Lee found that the use of telemedicine for retinal screening was beneficial and cost-effective for diabetes management.  The study also reported that Among all telemedicine strategies examined, teleophthalmology was the most cost-effective intervention.

A 2019 meta-analysis study of 14 studies was developed by Jiang et al.  All 14 studies in the paper found the DHIs (digital health interventions), i.e. telemedicine, in the management of CVDs (cardiovascular diseases) to be cost-effective.

In a 2020 meta-analysis study, Atmojo el reported that telemedicine utilization in dermatology, radiology, pediatrics, and intensive care unit (ICU) rooms reduced health costs by 56%.

A 2020 study by the researchers at the University of California San Francisco found that more than 50% of all GP (General Practitioner) and ER (Emergency Room) visits were virtual.  Before COVID, only 2-11% of all doctor’s office visits were virtual.  Some may take this 50% as a reasonable assumption for an employee telemedicine service usage.  However, there is obviously an overlap in using various WellAI tools.  For example, there is a high chance that an employee who utilizes the WellAI chronic diseases management program would also utilize the WellAI VideoMedix service.  In addition, to be conservative, we are going to assume that those 30.8% who would use the WellAI digital health tools outside of telemedicine would benefit from WellAI so much, they wouldn’t need the WellAI VideoMedix service.  Hence, we are going to assume that only 19.2% (= 50% – 30.8%) of employees would use telehealth.  This is a very conservative assumption because even if all of those 30.8% employees who use the WellAI chronic disease management program and other tools are completely cured after finishing the program(s), they may still need to use the telemedicine service for the PCP visits and so on.  However, we prefer underestimate than overpromise, as I had explained in one of my previous blogs ‘WellAI’s Health Cost Savings Calculator – It Is Critical to Use Conservative Assumptions!’.

As mentioned above, to evaluate cost savings from the health cost savings from the WellAI telehealth (or telemedicine), it is important to ask a question “Cost savings compared to what alternative?”  If before the COVID-19 crisis one may have argued that the alternative to the WellAI telehealth service is the actual face-to-face doctor’s visit, then now we’d like to be realistic and conservative in our assumptions and take into consideration the fact that every major health insurance carrier now offers some form of a telehealth service.  The telehealth service is heavily promoted to the employees of a company that is a customer of a major health insurance company.  We are mainly talking about those employees who are on a PPO, HMO, or POS health plan type.  For example, for a large employer, who may only offer one or all three of these health plans to its employees, the cost savings from the WellAI telehealth service is assumed to be zero, despite the fact that the WellAI telehealth may be cheaper, more efficient and is unique, as it is based on purely scientific data from over 30 million medical studies.

Thus, the exact formula for the health cost savings from telehealth is

(Estimated percent of employees who would use telehealth) x (Estimated cost reduction of telehealth vs face-to-face doctor’s visit) x (Percent of employees who are not on PPO/HMO/POS plans)

For example, for a typical (average) employer from a June 2020 mega-analysis study by Goetzel et al, health cost savings from telehealth for an large employer are estimated at 0% to 1.6% of the total healthcare-related costs, and for a small employer those are estimated at 10.8%.

Where did 0% savings come from?  Does it mean employers should not be using the most recent advances in telehealth?  First and foremost, 0% is the lower bound for savings from telehealth 2.0 and is a result of our very conservative assumptions, as we had explained above.  We assume an employer doesn’t save from telehealth 2.0 if every employee already has access to a telehealth service (for example, through a PPO/HMO/POS plan offered by their employer) and refuses to try something new.  In other words, the employer doesn’t save if no one, not a single employee is willing to try the new generation of telehealth.  Please keep in mind, we are not talking about switching from their current telehealth service to something like WellAI’s Vidoemedix.  We are just talking about trying it.  After all, Videomedix is only one part of the WellAI’s menu of offerings.  However, it’s an important part.  It’s super cheap, science based and of unlimited use to the whole family.

Savings are important.  But it’s not just about financials.  If you are an employer, you know how tough and challenging 2020 has been.  You know what your employees and their families has gone through.  Offering a cool new innovation to your employees could be a massive morale boost, a tool that gives your employees and their families a peace of mind.  You can’t always put a dollar number on that.

 By the way, at WellAI, we believe the telehealth calls will very soon become high quality video calls, just like WellAI’s VideoMedix.  Hence, expect more and more talk about videohealth in the media.  You heard it here first.  Tell your friends.  😊

…And No, telehealth is not going away after COVID…

All in all, depending on employees’ demographics of a particular company, number of people with chronic diseases, participation rate, and the type of insurance plan, among many other factors, the WellAI Health Cost Savings Calculator predicts 34% to 45% savings in an employer health costs, on average.  These savings are sourced from 5 factors:

• WellAI’s chronic disease management program
• WellAI’s elaborate symptom checker (akin to Amazon’s Alexa, but specifically for health)
• WellAI’s VideoMedix
• Reduction in absenteeism costs
• Reduction in presenteeism

As a reminder, the basic version of WellAI app is now available for free on your smartphone.  Please use the following links to schedule a 1-on-1 demo:

• If you are an employer and would like a cool benefit that makes your employees healthier and happier, and saves 34% to 45% on your healthcare costs, please schedule a virtual meeting here.
• If you are a potential investor who would like to be part of a unique once-in-a-lifetime investment opportunity that will forever revolutionize healthcare, please schedule a virtual meeting here.
• If you are a potential customer, a patient or you are just curious about any of the WellAI high tech products – ‘Health Alexa’, VideoMedix next gen telehealth, or the scientific chronic disease management program – please schedule a virtual meeting here.

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