Phillip Phan
research
August 4, 2020

Big Opportunity for Telemedicine Emerges from COVID-19 Crisis

Why it matters:

Phillip Phan, the Alonzo and Virginia Decker Professor of Strategy and Entrepreneurship at the Johns Hopkins Carey Business School, discusses promising developments in the field of telemedicine – developments that, ironically, may have been sped up by the onset of the coronavirus pandemic.

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If crisis leads to opportunity, then even the destructive impact of the COVID-19 pandemic might be expected to produce some positive changes in the form of accelerated innovation.

Within the health delivery industry, COVID-19 has witnessed a massive increase – in some hospitals from less than 10 percent to more than 90 percent – in the use of telemedicine in outpatient care.

Telemedicine has been in development for years. Fraught with regulatory, payment, and technology hurdles, its adoption has been slow and fitful. COVID-19 seems to have taken care of these barriers.

In a recent article for Ophthalmology Times, Johns Hopkins Carey Business School Professor Phillip Phan and two colleagues addressed the obstacles that must be cleared before the widespread adoption of telemedicine in the diagnosis and treatment of eye disorders.

Looking beyond ophthalmology, Phan, the Alonzo and Virginia Decker of Strategy and Entrepreneurship at Carey, discusses the future of telemedicine in more general terms in the following Q&A.

QUESTION: Your article in Ophthalmology Times mentions the 1135 emergency waiver and telemedicine CPT (current procedural terminology) codes issued by the federal Centers for Medicaid and Medicare Services (CMS) in response to COVID-19 in early March 2020. Could you explain what the waiver and the codes stated, and what was their purpose?

PHILLIP PHAN: Until COVID-19, there were few circumstances under which CMS would allow providers to see patients through telemedicine and be reimbursed. The waiver was a temporary measure to allow this to happen on a large scale, given the near-complete shutdown of outpatient visits due to social distancing concerns. The issuance of CPT codes means that a provider can now bill CMS to see patients via telemedicine. Each type of encounter has a CPT code, so as more disciplines (dermatology, cardiology, gastroenterology, ophthalmology, etc.) use telemedicine, the expectation is that CMS will issue more CPT codes. Where CMS goes, so go the private insurance companies, meaning that the widespread adoption of telemedicine may now become a reality.

“The pandemic has forced us to have conversations about many things that should have happened years ago.”

Phil Phan, PhD, Alonzo and Virginia Decker Professor of Strategy and Entrepreneurship

 

Q: The article says, “Telemedicine may become ‘the new normal’ in medical practice.” How so, generally speaking?

A: We don’t know when a COVID-19 vaccine will be available and how effective it will be. Even with a vaccine, there are many things we still don’t know about COVID-19; whether exposure confers temporary or permanent immunity, all of the risk factors for mortality, and morbidities that may be years in the making. Hence, social distancing may continue to be practiced for some time to come, and telemedicine is one solution for patients who are reluctant to see their doctors for fear of getting infected in the hospital setting. As patients and providers become familiar and comfortable with the technology, they may affirmatively choose to use it, since it is more convenient, and safer, than in-person visits.


Q: The article also states that “telemedicine adoption needs to start from the patient’s perspective.” Could you expand on that?

A: The willingness to use telemedicine will be driven by demand (the patient), not by supply (the provider). As long as insurance companies and CMS are willing to reimburse for telemedicine, supply will follow. Therefore, if telemedicine is going to be the new norm, providers must design encounters with the patient’s comfort and convenience in mind, or adoption will be slow.


Q: And from the providers’ perspective, what do they need to do to make telemedicine adoption work?

A: The specific encounter must be reimbursable, and the technology seamlessly integrate with the electronic health record (EHR), so that billing is easy and transparent. Providers must be compensated at the same rate as in an in-person encounter. The key is that providers must not have to keep separate records or transcribe telemedicine encounters into the EHR. Otherwise, the additional workload and increase in error rate will negate the efficiency of telemedicine.

Q: Do you foresee the necessity, in the near or distant future, for patients to have more medical technology in their homes, whether it’s, say, a blood-pressure cuff, a high-resolution digital camera, or AI software?

A: Yes, because these devices allow the provider to collect reliable data to support diagnosis and treatment plans. Without data, providers will not be able to justify the treatments and the reimbursements that go along with them. The rate at which people will adopt the technology in their homes will depend on whether insurance companies will help cover the cost of these devices. Absent reimbursement, if patients have to pay for the devices, the cost effectiveness and efficacy of these devices will determine adoption. Patients may choose to pay for these devices if the benefits of not having to visit a hospital or clinic (with the wait times and risk of disease exposure) outweigh the costs.


Q: COVID-19 has forced us to talk more urgently about telemedicine adoption. Do you think it’s something that should have been happening years ago?

A: Telemedicine has long been touted as a modern way of delivering health services in the connected era. Until the pandemic, a high level of comfort, or tolerance, for the conventional way of seeing one’s doctor has prevented large-scale adoption. In fact, the pandemic has forced us to have conversations about many things that should have happened years ago. The convenience factor of telemedicine has been known, but patients think that a real encounter requires an in-person visit, and insurance companies have been reluctant to pay for telemedicine because of the possibility of fraud. Finally, as with health care technology, supply drives its own demand. Because telemedicine makes encounters convenient, whether necessary or not, volume will likely go up, leading to more reimbursements, which would be a matter of concern to most insurers.


Q: Are there concerns that this approach to health care could lead to more complaints about medical malpractice?

A: No more than the usual in-person encounter. The key is for adopters to be clear-eyed about the limitations. As long as diagnosis and treatment are supported by reliable data and standards of care, the risk will not be elevated, relative to in-person encounters.

Yes, because these devices allow the provider to collect reliable data to support diagnosis and treatment plans. Without data, providers will not be able to justify the treatments and the reimbursements that go along with them. The rate at which people will adopt the technology in their homes will depend on whether insurance companies will help cover the cost of these devices. Absent reimbursement, if patients have to pay for the devices, the cost effectiveness and efficacy of these devices will determine adoption. Patients may choose to pay for these devices if the benefits of not having to visit a hospital or clinic (with the wait times and risk of disease exposure) outweigh the costs.


Q: COVID-19 has forced us to talk more urgently about telemedicine adoption. Do you think it’s something that should have been happening years ago?

A: Telemedicine has long been touted as a modern way of delivering health services in the connected era. Until the pandemic, a high level of comfort, or tolerance, for the conventional way of seeing one’s doctor has prevented large-scale adoption. In fact, the pandemic has forced us to have conversations about many things that should have happened years ago. The convenience factor of telemedicine has been known, but patients think that a real encounter requires an in-person visit, and insurance companies have been reluctant to pay for telemedicine because of the possibility of fraud. Finally, as with health care technology, supply drives its own demand. Because telemedicine makes encounters convenient, whether necessary or not, volume will likely go up, leading to more reimbursements, which would be a matter of concern to most insurers.


Q: Are there concerns that this approach to health care could lead to more complaints about medical malpractice?

A: No more than the usual in-person encounter. The key is for adopters to be clear-eyed about the limitations. As long as diagnosis and treatment are supported by reliable data and standards of care, the risk will not be elevated, relative to in-person encounters.

Alonzo and Virginia Decker Professor of Strategy and Entrepreneurship

Phillip Phan, PhD

Phillip Phan is Alonzo and Virginia Decker Professor at the Johns Hopkins Carey Business School with joint appointments in the Johns Hopkins Medicine Department of Medicine, Whiting School of Engineering Malone Center for Engineering in Healthcare, and the Johns Hopkins Armstrong Institute for Patient Safety and Quality. He is Associate Director at the Johns Hopkins Medicine Institute for Clinical and Translational Research. His research focuses on governance and innovation management in healthcare He has published more than 190 peer-reviewed articles, abstracts, and conference proceedings and is author of 8 books. He is Editor of the Academy of Management Perspectives, Academic Editor of Medicine® (non-clinical medicine section), and Associate Editor of the Journal of Technology Transfer. He serves on review panels for the National Academies of Sciences, Hong Kong Research Grants Council, National Science Foundation, and Science Foundation Ireland.

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