(Corrects reference to the technology used by Lindsay Kolowich in the sixth paragraph.)
One night last fall, Beth Ferrin’s 9-year-old son came home with a swollen throat and fever. It was after dinner, so she flipped open her laptop and dialed into LiveHealth Online, a service offered by her insurer, WellPoint (WLP), that connects patients with doctors via video calls. Fifteen minutes later, Ferrin says, “we were on with a doctor.”
After a quick diagnosis of an infection (the doctor, Ferrin says, treated it as strep, though couldn’t diagnose that without a test), a prescription for an antibiotic was called in to a pharmacy near Ferrin’s home in Bellbrook, Ohio. “By 10 p.m., I was back home,” she says. “It was quick and easy.” Her other options would have been to see a doctor in the morning or risk a long wait at an urgent care facility. The video call was faster and cheaper—it cost $40 instead of the $100 a pediatrician would charge, she says.
Hundreds of employers of all sizes are contracting directly or through their insurers with telehealth providers to cut medical costs and give workers 24-hour access to doctors and nurse practitioners. WellPoint teamed up with Boston-based American Well to offer telemed services to 3.5 million of its health-plan subscribers last year and intends to extend the service to another 32.5 million over the next 12 to 18 months. UnitedHealth Group (UNH) began a pilot program in January, providing 310,000 subscribers in Nevada with virtual doctors’ visits.
Telemedicine has been spurred in part by the Affordable Care Act, which is funneling more patients into a system plagued by physician shortages. By 2020 the U.S. will have 91,500 fewer doctors than needed, says the Association of American Medical Colleges. Telehealth providers say they help make up for this shortfall by aiding doctors in delivering services more efficiently. WellPoint says users of LiveHealth Online saved an average $71 per visit and most of them saved two to three hours of time.
The widespread use of camera-equipped devices has made remote medical connections easier, and high-definition video often provides enough detail for medical professionals to make diagnoses. “Sometimes if it’s a rash, we can see the rash,” says Katherine Sandstrom, a nurse practitioner in Portland, Ore., who sees a few patients via video each week through health-services provider ZoomCare.
Lindsay Kolowich, a 23-year-old marketer in Boston, recently consulted a doctor through American Well. She wanted to check on how her foot was healing after recent surgery. Her surgeon was far away and only available midday, so she opted for a teleconsult that didn’t require time off from work. “It saved me four or five hours,” Kolowich says. “I had to show him where it hurt and how flexible my foot was, and he gave me easy directions on what to do,” she says.
Telecare works well for treating common conditions such as colds, flu, pink eye, and sprains, providers say. The larger telemedicine companies contract with doctors with an average 15 years’ experience who are certified to practice in the states from which patients call.
The American Telemedicine Association is developing an accreditation program for telehealth providers. A bill introduced in Congress last year by Representatives Doris Matsui (D-Calif.) and Bill Johnson (R-Ohio) would create federal telecare standards.
“I don’t think we know how it works, the risks and benefits at the moment,” says James Perrin, president of the American Academy of Pediatrics. When asked about the throat infection of Ferrin’s son, Richard Rosenfeld, chairman of otolaryngology at SUNY Downstate Medical Center in Brooklyn, N.Y., said: “The only way to diagnose strep is with a test. Best practices say you can’t just throw an antibiotic at somebody.” He says there’s only so much a doctor can tell without an examination performed in-person and telemedicine visits could result in unnecessary medication.
Telehealth companies say they track their doctors’ prescribing practices to ensure they’re in line with the prescription levels of in-clinic doctors. “Reaching out to your primary physician is the best way to be treated,” says Timothy Howard, senior medical director for telemed provider Teladoc. “But if that physician is not available, we would like to be that next level.” Many doctors who provide telehealth services often advise patients to follow up with their doctors.
Most users pay about $40 a visit and receive the services through their insurers. A small number have signed on directly, paying as little as $10 a month for a subscription. About 20 states require private insurers to reimburse doctors for services provided remotely. At least 10 additional states might enact similar laws this year, says Jonathan Linkous, chief executive officer of the American Telemedicine Association.
Telehealth companies are reporting double-digit revenue growth and attracting high-profile investors. MDLive raised $23.6 million in January. Its investors include former Apple (AAPL) CEO John Sculley. “Our service is expected to increase 10 times in the number of patient visits this year,” Sculley says.
“It’s going to be just like urgent care was in the U.S.—it’s now completely acceptable,” MDLive CEO Randy Parker says. “Within the next few years, no consumer will even remember not being able to connect to their providers through telehealth.”
The bottom line: Investors are putting money into telehealth services, used to treat common ailments.
Kharif is a reporter for Bloomberg News and Bloomberg Businessweek in Portland, Ore.