10 minute read 24 Jul 2020
mother and daughter consulting with doctor on video call

How health execs view the future of clinician-to-clinician telemedicine

By Dan Shoenholz

EY-Parthenon Health Services Co-Leader

Strategy leader in health sector. Advisor to corporate and private equity executives. History buff. College basketball fan. Husband. Swim and choir dad.

10 minute read 24 Jul 2020

We interviewed health care executives to explore their views on the investment in clinician-to-clinician telemedicine models in acute care.

In brief
  • There is a strong appetite for acute telemedicine going forward, as it helps to manage specialist shortages, optimize costs and improve access to care.
  • Health executives expect to increase spend on acute care telemedicine, particularly in the areas telepsychiatry and tele-ICU.

Since the COVID-19 outbreak, interest in telehealth in the US has seen a dramatic increase. Telemedicine, a subset of telehealth, is defined as the provision of medical care using technology in clinical settings and has enabled providers to deliver care across the continuum, despite shelter-in-place mandates (Figure 1). Adoption by consumers, physician practices and hospitals has increased significantly as patients seek to avoid health care settings to reduce exposure to COVID-19 and administrators shift as much care as possible to virtual channels to conserve vital resources for frontline work.

The significant uptake in the deployment of telemedicine has been enabled by temporary increases in funding and relaxation of regulations by government departments, in conjunction with shifts in coverage and reimbursement policies from commercial payors. Some providers, including primary care providers, have come to rely on telemedicine as the only viable option to deliver care under shelter-in-place orders.

While COVID-19 and shelter-in-place mandates have stimulated the use of telemedicine between physicians and patients, health systems and hospitals have also seen increased utilization of telemedicine applications in acute settings and tele-ICU monitoring to coordinate care among clinicians. In order to better understand the adoption dynamics, we conducted a series of interviews with health care executives to explore health system perspectives on the investment in clinician-to-clinician telemedicine models in acute care settings.

Our research, and our work with health systems, suggests that there will be a notable increase in the usage of telemedicine solutions in this context. Moreover, we believe that hospital and health systems will increasingly value clinically integrated solutions that bundle technology with clinical support to round out staffing shortages.

Figure 1. Telehealth continuum of care framework

Telehealth capabilities are being rapidly deployed to support COVID-19 patients. Beyond the crisis, telehealth can be leveraged across the continuum of care. Telemedicine in acute care settings – a subset of telehealth – is the focus of this report.

Chart with various telemedicine topics explained.

Use cases of clinician-to-clinician telemedicine in acute care settings

Clinician-to-clinician telemedicine in acute settings enables care coordination between providers synchronously during an episode of care (e.g., emergency psychiatry or neurology evaluation), asynchronously after a visit (e.g., remote radiology reads) or on an ongoing remote monitoring basis (e.g., tele-ICU to be consistent with how it is referred below).

The overall total addressable market (TAM) for acute care telemedicine is estimated at more than $10b¹, compared to the overall acute care health care information technology (IT) TAM approximated at $60b to $80b.² The adoption of telemedicine had been increasing prior to the COVID-19 pandemic. For example, from 2014 to 2018, claim lines for clinician-to-clinician telemedicine in rural areas increased by 68%.³ After the pandemic, this trend is expected to continue.

Clinician-to-clinician telemedicine use cases in acute settings assist a patient’s provider team by providing virtual access to specialists to create more flexible labor models, particularly for high acuity episodes. While various use cases exist, the most notable examples of health systems utilizing synchronous clinician-to-clinician telemedicine are in the areas of telepsychiatry and teleneurology (e.g., stroke care), though applications also exist in emerging areas such as telenephrology and infectious disease management. Tele-ICU monitoring is another application of telemedicine used by health systems and hospitals to coordinate care for patients under critical care conditions.

How different specialties are using telemedicine 
  • Telepsychiatry: Treatment of behavioral health disorders requires consultations with psychiatric specialists who can diagnose and manage care effectively. These departments are typically low margin and resource intensive to maintain, resulting in a shortage of specialists in most settings. Telepsychiatry platforms enable specialist consults for emergency department providers attending to patients with emergency psychiatric presentations.
  • Teleneurology: Treatment of acute episodes, such as stroke, requires specialist consultation with neurologists trained in this form of care management. Health on staff systems and hospitals without necessary expertise leverage remote teleneurology to coordinate care for patients with complex conditions.
  • Tele-ICU: Critical care management often requires coordination between teams of providers (e.g., nurses, pulmonologists, intensivists). Health systems and hospitals may choose to centralize these specialists and providers in a single command center location set up with sophisticated audio and visual capabilities to manage multiple patients’ care simultaneously. Tele-ICU capabilities can also help coordinate care between attending providers and specialists external to the health system and hospital.
  • Telenephrology: General providers (e.g., primary care physicians) may consult with specialized nephrologists with relevant expertise for complex kidney-related conditions.
  • Infectious disease management: Remote consultations between provider teams for infectious diseases can mitigate exposure and risk of disease contraction among providers.
  • Teleradiology: Attending radiologists may send complex reads (e.g., subspecialty, advanced imaging) to specialists after a patient visit for further consultation.

Industry views: acute telemedicine investment interest and future intentions

Over the last few years, health systems have invested in IT across their organizations to bolster clinical and nonclinical operations. However, unlike with telemedicine, historical IT investments (e.g., electronic health record) have not always improved provider experiences. While decision-makers indicate some uncertainty around future IT investment given margin pressures due to the COVID-19 pandemic, there remains a strong appetite and interest in acute telemedicine and tele-ICU going forward (Figure 2). 

As one health system CIO indicates, “Even if over the next 12 to 18 months IT spend was flat or went down, I’d expect telemedicine spend to continue to increase. We’re going to see some additional investment as we continue to see more use.”

Figure 2. Evolution of telemedicine spend

Overall telemedicine investment: How do you expect your organization’s overall telemedicine spend to trend over the next 12 to 18 months after the COVID-19 pandemic (increase, stay the same, decrease)? If increase, by what percentage?

Chart: bars depicting increased spending on telemedicine

In particular, decision-makers express interest in expanding budgets related to clinician-to-clinician acute telemedicine by 5% to 10% to manage care delivery through the COVID-19 pandemic and beyond (Figure 3). “We’ve seen an increase in clinician-to-clinician telemedicine spend over the last two years. I expect it to increase another 5% to 10% over the next 12 to 18 months,” said one health system CIO.

Figure 3. Evolution of clinician-to-clinician telemedicine spend

Clinician-to-clinician telemedicine investment: How do you expect your organization’s spend on clinician-to-clinician acute care telemedicine to trend over the next 12 to 18 months? After the COVID-19 pandemic (Increase, stay the same, decrease)? If increase, by what percentage?

Chart: bars depicting increased spending

Clinician-to-clinician telemedicine in the acute setting empowers health systems and hospitals to:

  1. Improve access and the quality of care delivery, particularly in rural geographies
  2. Manage specialist shortages and capacity need
  3. Optimize the cost of care delivery through resource centralization

Given these use cases and value proposition, health system and hospital decision-makers expect to increase the spend on acute care telemedicine going forward. With the onset of COVID-19, more providers are expected to adopt telemedicine capabilities, given the general comfort and acceptance of telemedicine as a sustainable model of care delivery.

As one telemedicine vendor indicated, “With COVID-19, we have seen providers who were in isolation now able to consult via telemedicine. Long term, there’s a lot of potential. With acute care telemedicine, specialists can be connected in 5 minutes and be way ahead of treating that patient who presents at the emergency department.”

Investment in clinician-to-clinician telemedicine is expected to be particularly strong in telepsychiatry (Figure 4). Decision-makers indicate that telepsychiatry fills a critical need for health systems and hospitals, particularly those without on-site emergency psychiatry services.⁴ More and more patients are presenting at the emergency department with psychiatric conditions and decision-makers indicate the vast majority of systems are ill-equipped to handle this patient volume with on-site resources.⁵ In particular, margin-compressed hospitals have been reluctant to invest in psychiatric departments and are in some cases shuttering them due to low-margin outcomes and resource intensiveness.

With approximately 80% of US counties reporting a shortage of psychiatrists,⁶ hospitals are looking for innovative ways to manage the influx of psychiatric conditions and growing patient need for specialist behavioral health care. As one hospital COO indicated, “Telepsychiatry is going to grow for a number of different reasons. One is that it’s very hard to recruit a psychiatrist — it’s a difficult position to staff and a difficult position to maintain. Another is that we have a massively underserved population of psychiatry patients.”

Figure 4. Telemedicine sub use case investment priority
Chart: highest priority to lowest - Telepsychiatry, Tele-ICU, Telestroke and Other

Teleneurology — particularly remote stroke care — is a more mature application of acute care telemedicine and has benefited from provider investment over the last few years. Going forward, the spend on remote stroke consultations is likely to increase, but at a slower pace than that for telepsychiatry, although the demand for teleneurology remains strong. According to a CIO, “Telestroke is a very well evolved model. I could see growth continuing there. In telepsych, there are just phenomenal opportunities because it’s a massively unmet need within our health care system.”

Health systems are also increasingly centralizing teams of providers in a common location or command center to coordinate care for critical patients in ICU settings. These tele-ICU capabilities also enable rural systems that lack specialists to holistically care for patients in cost-effective and sustainable ways.

Providers have especially utilized tele-ICU capabilities during the COVID-19 outbreak to limit the infection exposure and optimize the use of scarce personal protective equipment resources, and to address a strained shortage of critical care physicians. Almost all states in the US are expected to experience a shortage of intensivists in the future, and tele-ICU models are a possible solution for relieving those stressors.⁷

The importance of clinician-to-clinician telemedicine models in acute care settings is amplified for health systems and hospitals in underserved or rural geographies (e.g., critical access hospitals). However, decision-makers at larger health systems also see value in expanding clinician-to-clinician telemedicine access given the complexity of care needs and to bolster clinical capacity at adjacent, understaffed sites within their system.

Business model evolution

While clinician-to-clinician telemedicine in acute care settings might not see a “hockey-stick” adoption — as may be the case for other telemedicine capabilities in the care continuum, such as virtual primary care — clinician-to-clinician models are resilient, and health system decision-makers indicate an interest in the continued investment in these technologies.

This resiliency stems from the technology’s demonstrable ROI and scalability in expanding access to specialist care. In some instances, larger health systems with access to specialists (e.g., academic medical centers) have invested in capabilities internally and can provide services to other hospitals.

In addition to in-house models, a variety of third-party business models exist to support health systems and hospitals in their deployment of clinician-to-clinician telemedicine capabilities. Most prominent among these are three models: specialist staffing services; technology-only models; and clinically integrated, full suite offerings (technology and staffing [Figure 5]).

Figure 5. Evolution of third-party vendor business models
Chart: specialist staffing service models, technology-only models and clinically integrated models

The decision-makers interviewed for this report highlight that technology for acute care telemedicine has specific use cases and there is some differentiation in low latency and reliable infrastructure for critical applications. Generally, technology platforms are particularly well perceived by large health systems with an abundance of specialists on staff. These systems (e.g., academic medical centers) leverage technology to extend their labor footprint within and beyond their system.

However, most hospitals are constrained by specialist capacity and perceive strong value in clinically integrated telemedicine solutions that bundle clinical services with technology to streamline deployment. A fully integrated solution offers financial, clinical and work planning efficiency.

“It was critical for us that our vendor provided clinical support in addition to technology. Every time we go into something like psychiatry or neurology, we need to make sure physicians are available. Having this full suite offering makes it easy for us to get access to specialists we just don’t have access to otherwise,” said one health system COO.

The future of clinician-to-clinician telemedicine in acute care settings

Going forward, we expect clinically integrated models to benefit from strong growth given the decision-maker investment interest in acute telemedicine and the burgeoning specialist shortages in key areas. Technology models will continue to garner interest from larger systems and academic centers looking to extend their labor footprint beyond core campuses. Specialist staffing service models that do not provide technology are likely to expand technology capabilities through organic investment or partnerships to remain competitive.

While the spike in adoption sparked by the COVID-19 pandemic across the broader care continuum may recede over time, clinician-to-clinician telemedicine models in acute settings will remain resilient — and will benefit from increased health system and hospital investment in the coming months and years.

This article is co-authored by EY-Parthenon Principals Andy Bechtel and Aaron Feinberg and EY-Parthenon Vice President Supriya Jain. Consultant Abhinav Sah and Associate Luke Shearin contributed to this article.

  • Show article references#Hide article references

    1. Credit Suisse analyst report on Teladoc, March 2020; EY-Parthenon analysis.
    2. EY-Parthenon analysis.
    3. “A Multi-layered Analysis of Telehealth,” Fair Health website, accessed June 18, 2020.
    4. Rain E. Freeman, Krislyn M. Boggs, Kori S. Zachrison, Rachel D. Freid, Ashley F. Sullivan, Janice A. Espinola and Carlos A. Camargo, Jr., “National Study of Telepsychiatry Use in US Emergency Departments,” Psychiatric Services, 2020, 71:6, 540-546.
    5. “The Psychiatric Shortage: Causes and Solutions,” National Council for Behavioral Health website, accessed June 18, 2020.
    6. “2017 Review of Physician and Advanced Practitioner Recruiting Incentives,” Merritt Hawkins website, accessed June 18, 2020.
    7. “Array Advisors Projects Massive Shortage of Critical Care Physicians Due to COVID-19,” Array website, Array Advisors Projects Massive Shortage of Critical Care Physicians Due to COVID-19, accessed June 18, 2020.

Summary

While COVID-19 has stimulated the utilization of telemedicine between physicians and patients, health systems and hospitals have also seen increased use of telemedicine applications in acute settings and tele-ICU monitoring to coordinate care among clinicians. EY-Parthenon interviewed health care executives to better understand their perspectives on the investment in and adoption of clinician-to-clinician telemedicine models in acute care settings. Our research suggests that there will be a notable increase in the usage of telemedicine solutions in this context.

About this article

By Dan Shoenholz

EY-Parthenon Health Services Co-Leader

Strategy leader in health sector. Advisor to corporate and private equity executives. History buff. College basketball fan. Husband. Swim and choir dad.