Health Tech

Digital Health: Avoiding a Second TechLash!


As John Glaser argued a recent piece in Harvard Business Review, many health care executives seem have been blinded by the shiny object that is digital health. Forgive us for a powerful feeling of déjà vu. Since the last major digital innovation in health, the electronic health record, fell far short of expectations and probably generated a negative return on investment for many care systems, it is worth thinking about to avoid the same fate with this new wave of digital tools.

As COVID raised concerns about the safety of in-person visits to clinics and physicians’ offices, digital health visits soared during the spring. Traditional health care organizations large and small–hospitals, health plans, physician groups–have since struggled to integrate digital technology effectively into their care offerings and management structure. 

In other industries, digital technology acts as a  force-multiplier for the core business–it helps firms make much more efficient use of their workforce, customers’ time and physical capital. Amazon used its cloud-based IT infrastructure and sprawling  digital “catalog” to compress time to customer fulfillment, eliminating the need for customers to visit stores to get what they needed. And by leveraging other firms’ inventories, it reduced the need to purchase, warehouse and physically handle more than half of what they sell. 

Similarly, digital health applications should not be thought of as a “new product”. Indeed, the capability for digital visits and monitoring and digitally enabled remote work has existed (some say, languished)  for almost two decades. Digital health tools should be thought of as force multipliers for the trusted relationships at the heart of healthcare. Clinicians can be in two places at once-  transforming how patients and clinicians interact by removing both time and physical location as constraints. At the same time, telework enables healthcare enterprises to make more efficient use of scarce clinical and administrative person-power,  shrinking their physical capital footprint. 

Achieving savings in clinician time and reduction in overhead were the twin drivers of Kaiser Foundation Health Plans’ successful digital health strategy. Kaiser’s two-decade long investment in virtual care has resulted in more than half of Kaiser subscriber interactions with their caregivers (preCOVID)  being electronic. The savings in reduced clinic time and overhead dropped through directly to Kaiser’s bottom line by minimizing the consumption of resources inside Kaiser’s fixed capitation pool. But you do not need to be fully, or even partially, capitated to reap digital health’s benefits.

Optimize Physician Time 

The biggest benefit digital health offers to care systems is optimizing use of clinician time, the scarcest resource in the health system. A digitally connected care giver can quickly field the first two or three questions about the patient’s condition in real time or closely asynchronously on their smart phone, potentially ruling out the need for an in-person visit or directing the person to seek immediate care for conditions that truly require it.

Often, the marginal visit is a product of patient anxiety, which can be alleviated by digital interaction- via email, text, voice or video. Virtual interactions will also help in dealing with administrative details related to care-prescription renewals or health insurance approvals-which presently result in medically  unnecessary visits. This will lead to a bimodal distribution of digital “visits”- more short, focused transactional visits and more longer and detailed interactions perhaps leading to in-person examinations. 

It may be that the real advantage of telehealth is as a screening and staging tool, not as a full-on substitute for in person visits. How these services are paid for is a sleeper issue; following the lawyers into billing per call or per minute is actually a terrible idea, with predictable political risks. The optimal payment model is including telehealth interaction in a subscription (per month) fee. 

The reduction of triage and administrative visits frees up in person clinician time to focus on those conditions that require physical examination or detailed face to face interaction, and perhaps increases billable diagnostic testing. These effects should be both countable and capturable as dollar savings or as accelerated patient revenues. Digital technology can also dramatically improve the efficiency of continuing professional education and physician to physician consultation by eliminating the need for travel and its attendant costs. 

Optimize Patient Time

Creating speed-to-results/action is the key benefit digital health creates for patients. Consider the pre-COVID state of the interaction from the patient’s standpoint:

Patient experiences a troubling symptom. They voice call their physician’s office for an appointment (often waiting on hold for the scheduler), sometimes waiting days or weeks to see them. When appointment day arrives, they must take time off work or home responsibilities, drive to the physician’s office, park, wait in the waiting room to be seen, fill out the inevitable clipboard, get whatever diagnostic tests are required, and  eventually see their physician. All in, the appointment itself can wipe out the better part of a morning or afternoon–cancelling out a half day of work, and/or requiring childcare.    

Digital interactions should help reduce queues for visits, and enable better and tighter scheduling of the residual in-person interactions. But crucially, real-time or “close” asynchronous telehealth interaction with patients accelerates the health system response to problems that are time-sensitive that  require either intervention or prescription medication. This is particularly important for the unstable chronically ill patients who suffer from asthma, diabetes or cardiac arrythmia or other conditions that can quickly tip into life threat. Avoiding unnecessary acute interventions by nipping problems in the bud is the key way digital health can reduce health costs. Again, these savings should be quantifiable.   

Optimize the Onsite Health and Support Workforce And Reduce Overhead

The increase in clinical interactions that can be handled virtually dovetails with the increased amount of administrative activity that can be handled virtually via teleconference and remote asynchronous work done at home. This can generate potentially large savings in reduced physical plant costs for offices and parking. Just in the first six months of the pandemic, Americans saved a stunning 60 million hours of commuting time by telework arrangements, nearly a third of which savings went into working additional hours. 

Administrative and physician office space freed up by digital technology can be compressed, or else subleased to other users. Surplus parking space can be repurposed to serve the supply chain or else leased to other users. The health system’s carbon footprint and energy costs can also be reduced. All these savings can be quantified. Telework will also accelerate the acceptance of business process outsourcing for expensive functions like revenue cycle and IT management that are not location-critical, further enabling health systems to reduce headcounts and reduce their fixed expenses. 

You Cannot Manage What You Do Not Measure

Digital technologies can help make an overburdened and stressed care system more affordable and responsive. Digital connectivity helps curate clinician time and enable health systems control their expenses under the immense pressure from COVID. Patients’ time can be conserved by digital connectivity, assuaging safety concerns, increasing patient loyalty and  solidifying healthcare enterprises’ market share. 

However, these benefits will not be realized unless health enterprises actively manage them. Failing to measure the resultant savings in time against their investments in digital health could mean that care systems will be not realize an acceptable  return on their investment. No technology is inherently transformational; it is how it is managed that makes the decisive difference. Soaring expectations could easily turn to disappointment without the disciplined application of these powerful digital tools. 

Jeff Goldsmith is President, Health Futures Inc, and author of  “Digital Medicine: Implications for Healthcare Leaders” (2003: Health Administration Press).

Categories: Health Tech

1 reply »

  1. There is little question that “digital healthcare” is good for patients for all the reasons Jeff Goldsmith lists. What is not so clear is the impact on healthcare costs. Are we substituting inexpensive digital interactions for costly clinician and administrative time or are we merely adding another service with little change to current resource utilization? Patient portals and apps for patients can certainly reduce some administrative efforts (but at a cost), but it’s questionable whether they cut clinician time.

    The Kaiser data quoted by Jeff is from five years ago and the “more than half of subscriber interactions” include all subscriber use of digital access to Kaiser, of which direct access to clinicians was a very small part. Also, the extent of the financial benefits of digital access is unclear, since Kaiser operating expenses continued a steady rise from 2013 onwards.

    Certainly we need some measurement of the benefits and costs of digital access. Unfortunately, while the pandemic has encouraged use of virtual visits to physicians, it also has made comparison difficult. Will we see patients going back to face-to-face visits when they feel safe again or will they continue to utilize virtual care? Hopefully, we’ll get some answers when our use of the healthcare system stabilizes, but let’s not assume digital healthcare is any kind of panacea.