Several months ago, I began a personal quest. My goal was to search the nation to find products and services that would provide valuable healthcare benefits to employees and at the same time create substantial cost savings for employers. I was convinced that services that provided this type of win-win solution must exist. Ultimately, I succeeded. In today’s increasingly complex and costly healthcare arena, I did not find the magic bullet. But, I did find a service that delivers sufficient magic that I believe Merlin would take notice.
What is it? In short, it’s telehealth. However, the magic is only revealed when it’s implemented correctly.
Telehealth, offered by companies such as Teladoc, First Stop Health, MDLIVE, and others, is not new. Indeed, a recent article in the Chicago Tribune noted that in 2016 “about 70 percent“ of large employers offered some type of telehealth service to employees. This October 2016 article was titled, “More employers are offering telemedicine, but why aren’t workers using it?", and detailed that only three percent of eligible employees used their telehealth services in the first half of 2016. The central point of the article is that employees are not using these services.
Here’s how telehealth works: It’s designed for treating non-emergency minor illnesses, such as cold and flu symptoms, allergies, ear infections, sinusitis, poison ivy, and sore throats. Teladoc and other providers require users seeking a consult to have completed a secure, HIPAA protected medical history and then connect these users with doctors via a phone or video connection. The quality of participating physicians is high: For example, Teladoc doctors are U.S. licensed, board certified, with an average of 20+ years of medical practice experience, and trained in 125 proprietary Teladoc telehealth guidelines. Indeed, the Teladoc website notes that its medical professionals and accompanying service have received “a perfect score” in two consecutive credentialing evaluations by the National Committee for Quality Assurance (NCQA).
When a telehealth user seeks a doctor consult, he or she is connected with a U.S.-based doctor who is licensed to practice in the state where the user is located, and the doctor can prescribe (as appropriate) medications such as antibiotics. Finally, after a consult, many telehealth services can securely transmit the records of this virtual visit to the patient’s primary care physician.
Numerous studies for Teladoc by Harvard affiliated Veracity Healthcare Analytics have demonstrated that large employers, with self-funded or experience-rated insurance plans, can achieve significant savings when telehealth services are widely adopted.
For example, Dr. Niteesh Choudhry of Harvard Medical School for Veracity Healthcare Analytics, found that the average cost per episode of a doctor’s office visit was $191, while the average the cost per episode of an emergency room visit was $2,661. For insured employees, these costs are divided between the employee (through a deductible, copay and any contributions to his or her insurance plan) and the employer, who typically funds the largest portion of the visit through the firm’s insurance plan. Telehealth redirects care (as appropriate from higher cost alternatives, while still providing high quality diagnosis and treatment. The telehealth visits avoid (as appropriate) higher cost employee visits to the emergency room, the doctor’s office, and the urgent care center. As a consequence, the higher costs of these visits are also avoided.
For large companies, who self-fund their insurance plans or buy experience-rated plans (where charges are based on the group’s past healthcare costs), the savings associated with these avoided higher cost visits drop right to the bottom line. Finally, convenient telehealth visits may also lead employees to seek a doctor visit far sooner for an illness that could become both life-threatening and expensive to treat. By catching it early, employees are healthier, more productive (avoiding incapacitating treatments or illnesses) and employers realize additional, significant savings.
In addition, when telehealth is accessed, user satisfaction is high. Teladoc reports that it resolves 92% of patient issues, with a 95% member satisfaction rate.
All of this positive information creates one obvious question: If telehealth offers such high value to employees (or users purchasing memberships on their own) and to employers, why is the average usage rate so low?
Moreover, employee usage rates are the key to realizing the significant potential cost-saving associated with telehealth, while also providing a valuable employee benefit. Telehealth services are not insurance. Employers pay a fixed monthly fee for the service for all of their employees to receive the telehealth services. As a result, the cost savings escalate dramatically as usage rates increase. The cost is fixed. The savings grow as usage grow.
The Chicago Tribune article noted the disappointment among employers at the low usage 3 percent usage rate, The article states, “So far, employees haven’t warmed to the idea, either because they don’t understand it, don’t know it’s available or because they’re skeptical of getting a doctor’s opinion via telephone.”
So, as part of my quest, I identified the telehealth provider that, to the best of my knowledge, has the highest average usage across the nation. I found freshbenies, which averages 44% usage among employee members, and has developed a set of best practices that lead to consistent 90% usage rates. [Full disclosure: I was so impressed with how the freshbenies service met the win-win criteria for success in my quest that we developed a commercial relationship].
The potential value to an employer’s bottom line, of such high usage rates, is significant. For example, in one freshbenies case study, a firm with an average of 386 employees in 2015 and 2016, spent an average of $41,400 in each of these years to provide employees with the freshbenies service. On average, this employer had a telehealth usage rate in these two years of 90%, and realized estimated annual healthcare cost savings of $247,700 from telehealth consults. As a result, the employer’s annual net savings, after paying for the freshbenies service, averaged $206,300 in 2015 and 2016. With this high usage rate, freshbenies saved this nearly 400 person employer approximately five times the cost of providing the service. For larger employers, it’s fair to assume that this same usage rate would lead to savings of a similar magnitude, in proportion to the number of employees receiving the service, thereby creating bottom line savings, and increased profits, of millions of dollars. Where large employers are self-insured, these bottom line improvements start, as soon as the service is provided to employees—with the correct implementation (as discussed below).
In analyzing freshbenies, I determined that successful telehealth deployment is all about how the service is configured and how employees are educated about the availability of the service. Over the past several years, work in behavioral economics, described in books such as Predictably Irrational by Duke’s Dan Ariely, and Nudge by University of Chicago Professor Richard Thaler and Cass Susstein of the Harvard Law School, has demonstrated how small changes in routines or services can lead to large changes in behavior. For example, employees end-up with better retirement plan choices when they must opt-out of appropriate 401K portfolios, as opposed to opting-in. Similarly, freshbenies has developed a benefits offering that focuses on dramatically changing member behavior, leading to employees who happily access telehealth services at over ten times the industry’s average usage rate.
Today, Teladoc makes its service available to a number of different providers, such as freshbenies, who offer monthly subscriptions in a variety of different configurations. Typically, the Teladoc service is bundled with a a number of related health oriented services, to create a package of services included in a single monthly subscription fee. The availability of these many different varieties of telehealth and complementary offerings further suggests that the devil is in the details.
freshbenies has achieved average usage rates that dwarf the usage rates for the majority of its competitors—all of whom have access to the same services and are attempting to address the same problems. To me, this vividly demonstrates that when our society benefits from shifting behavior toward healthier habits, our approach to changing behavior is as important as the specific services delivered.
Here’s why I believe freshbenies so significantly outperforms the usage rates of competitive offerings:
First, every aspect of freshbenies is designed to be easy to use, and to match the preferences of as many users as possible. For example, members are not limited to using the service via a smartphone app. freshbenies actively educates members that its services can be accessed in three separate ways: Through an easy to use desktop or mobile-friendly portal, a smartphone app, or just a physical card and booklet (for old school members).
Second, insurance companies typically attach a copay to telehealth offerings. The freshbenies service provides unlimited doctor visits each month for members and for their entire immediate family. This shift has both a financial and psychological component. Members are suddenly encouraged to use a “free” service, as opposed to feeling that they must justify each expense.
Individuals can purchase subscriptions to this unlimited access service for $12 per month, while employers can buy employee subscriptions at prices ranging from $12 to $9 per employee per month, depending on the number of employees. As noted above, each subscription includes the member as well as the members immediate family (spouse or domestic partner and dependent children).
Third, freshbenies has created a brand persona that encourages member use and provides a welcoming environment. New members receive a welcome package via old fashioned postal mail. It includes a booklet describing the services and membership cards. This tangible package, which is increasingly absent in our ever more virtual world, immediately creates high member awareness. In addition, the service’s many videos, which describe each offering, use a series of animated characters that are entertaining and engaging. These same characters appear in the booklet, throughout the website, in email newsletters, and in social media. The underlying message is clear, and it is the opposite of a cold, scientific, clinical or rationed care approach. It’s a statement that communicates, “We are here and we want you to try us, if you need us.”
Fourth, freshbenies sends members an engaging monthly newsletter that describes different aspects of the services in the package. This newsletter provides an ongoing means of engaging members and reminding them of the valuable services available to them. This approach is in sharp contrast to the typical health plan guide, which is generally a 100-plus page booklet that a member receives once a year.
Finally, the freshbenies core service (at $12 to $9 per month) provides a sense of overwhelming value. In addition to Teladoc, it includes a doctors online service through eDocAmerica.com which allows members to consult different types of doctors, including alternative medicine practitioners, by email with questions of all types. The advocacy service through Health Advocate offers members assistance in appealing medical bills or identifying costly billing errors, and provides unbiased advice on where to obtain specific medical services. The lack of transparency in healthcare costs means the service assists members who, for example, might require an MRI. The advocacy service can show the cost at one location is 66% of the cost for the same test at a different location, with no difference in quality. Finally, a prescription savings plan provides provides substantial savings versus the retail price of drugs. This is helpful for members who have drugs that aren’t covered or are expensive, giving them another option outside of their health plan.
The value of offering multiple, related services transcends the value of each individual service. As shown here, every time the freshbenies app is opened, the user sees all of the available services. So, the use of each service reinforces the awareness and “top of mind” nature of all the other services. In addition, with multiple services in the core package, freshbenies can create a wide variety of engaging materials, associated with these many services, which can be sent in monthly emails to members.
For our national healthcare system, all of the above raises several larger, noteworthy issues:
As a society, we are increasingly obsessed with the high cost of care. One consequence is implicit rationing. Through cost-sharing, long waits at medical facilities, perhaps the attitudes of providers offering treatments, and a host of implicit and explicit messages, individuals are effectively encouraged to consume less healthcare. In particular, individuals are, I believe, led to feel they should not seek treatment for something that is “probably nothing” or that will “go away in a few days.” As a general rule, this may be desirable. But, we also know that appropriate preventive care, early screenings for specific diseases, and early intervention are ultimately central to catching serious conditions before they become expensive and perhaps life-threatening illnesses.
freshbenies is a rare example where seeking healthcare is actively presented as a good thing. One wonders if similar energy should not be applied to promoting annual check-ups, age-appropriate tests, and disease screenings. I suspect that, like most telehealth offerings, many of these vital preventative measures often see low use rates, when higher participation rates could potentially lead to significant cost savings for employers and our larger society as well as a healthier population.
The many entities with a stake in our healthcare system—ranging from insurers to doctors to employers—may all benefit by considering whether they are putting the appropriate energy into creating a positive message that encourages these critical early intervention aspects of our emerging healthcare system.
Here’s a concluding thought. I opened this article by stating that telehealth is not new. As indicated by the Chicago Tribune article, it’s likely that the majority of employers offering telehealth to employees would say “telehealth is not the win-win we were seeking.” As a consequence, I have a lingering issue: I wonder how many other services, if reconfigured appropriately, could benefit employees and potentially send hundreds of thousands or even millions of dollars to the bottom line of employers, with almost no risk? It’s a question that is certainly worth considering.