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You are here: Home / Articles / U.S. Telehealth Industry Eyes Medicare for Its Next Big Check

U.S. Telehealth Industry Eyes Medicare for Its Next Big Check

January 30, 2018 • By Tamara Mathias

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(Reuters)—After years of lobbying in Washington, U.S. telehealth providers have the first hints that the dam could break on public funding for an industry they say could save taxpayers billions.

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Four bills that could be signed into law over the next year carry the solutions to barriers that have prevented the U.S.s’ huge over-65 health program Medicare from reimbursing doctors’ and medical visits, which often start over the phone.

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The bills come at a time when the industry’s claims of cost savings—powered by apps and mass smartphone usage—have begun to gain traction with private insurers striving to save on healthcare costs.

One issue for public spending on telehealth has been the inability to charge across state lines. Another is that Medicare does not recognize medical consultations that do not happen in person as the equivalent of a visit to the doctor.

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The fate of legislative amendments that unlock these barriers is far from clear in a fractured U.S. Congress, but investors and some of the world’s big healthcare providers are already circling firms like the U.S. sector’s dominant player Teladoc Inc.

Analysts say Teladoc racked up 75% of reported video or phone visits, according to 2016 estimates, but European insurance company Allianz Group earlier this month committed $59 million to American Well, one of a handful of smaller privately-run operations expanding in the sector.

Apple Inc.’s Heart Study app, which flags irregular heart rhythms in users wearing Apple Watches, allows them to instantly connect with a doctor using American Well’s technology.

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American Well Chief Executive Roy Schoenberg says that although revenue is steadily rising in the industry, it could grow 10-fold if payment parity, state-line and location-based constraints were lifted.

“There is a big black line between the availability of telehealth services to Americans under the age of 65 and Americans that are above the age of 65,” Schoenberg says. “This [legislation] would be an earthquake.”

Telehealth Costs Savings
Private insurers who cover the medical expenses of nearly 70% of U.S. adults aged 18–64 are attracted by costs that analysts say are at most a third of traditional face-to-face care.

Cowen and Co analyst Charles Rhyee estimates the average cost of a telehealth call is between $40–50 compared with around $150 for an urgent care visit—and nearly $1,500 for a trip to the emergency department.

Rhyee also estimates that roughly $135 billion of Medicare’s annual $675 billion in spending could be done by telehealth.

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Filed Under: Technology Tagged With: apps, Medicare, Technology, telehealth, telemedicine

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