Zachary Hafner
Advisory Board

The health care industry is here to stay, but meeting the ever-growing demands of an aging, consumer-minded population is not without its challenges. Physician demand in this country outstrips supply by a significant margin. According to a recent report commissioned by the Association of American Medical Colleges, by 2025 this gap will be somewhere between 60,000 and 95,000 physicians. By some estimates, as many as 20% of Americans don’t have access to a primary care provider. And for those who do, the average wait for a family practice visit is 19.5 days. How can we overcome these challenges? Enter virtual care, the “next-gen” solution to all our problems.

On the surface, virtual care promises to be just that. For consumers it is convenient, accessible, and available around the clock. In a recent survey, 72% of the population indicated a willingness to see a physician via video. For providers, payers, and other economic stakeholders, virtual care promotes an efficient marketplace. It eliminates a mismatch between physician supply and patient demand and encourages competition based on delivering greater value at lower price points. That’s just the beginning. With a little imagination, the potential for virtual care may be limitless. For example, it no longer seems far-fetched that a surgeon might perform a complex procedure at a site hundreds or even thousands of miles away using a remotely-controlled robotic system (think drones, but for health care). With geography removed as a barrier, concepts like “centers of excellence” could be redefined overnight.

It's a struggle

It is easy to dream big. Meanwhile, back in the real world, most provider organizations are struggling with how to make even the most basic virtual care program work—and payers with how to reimburse for them. Upfront investments can be staggering. Market players are reticent to place capital bets of such magnitude when the answers to fundamental business model questions remain unclear. Consumers, while intrigued by the innovative access, expect discounted pricing relative to traditional physician office visits, making it difficult for the stand-alone economics to pencil out. Antiquated regulations create significant barriers to growth by, for example, limiting virtual care delivery across state lines. Niche players with point solutions are chasing targeted segments of the market, further fragmenting the landscape. With challenges like these, it is no wonder that virtual care’s progress is lagging in its promise.

New waves of interest

Siphon off some of the froth, and the reality is that virtual care is simply another access mechanism—version 2.0 to telemedicine, which has been around since the mid-’60s. Technology advancement and consumer activation are sparking new waves of interest and innovation.

Once you get beyond the convenience aspects, virtual care is not so much different than the rest of health care today. It provides consumers with fragmented, reactive solutions to “in the moment” problems. It only achieves its true potential when it becomes part of a broader portfolio that brings people into integrated, longitudinal health care. When that happens, it can support individuals on a wide range of health care journeys, from wellness to emergent episodes to ongoing chronic disease. Under this paradigm, an effective virtual care program is much more complex than simply signing on with a vendor partner or adding one to a network. The “wiring” necessary to deliver high-value connectivity into a truly integrated health system is complicated, but those who figure out how to do it will win over consumers in the long term.

It’s a lot of work. The good news is that great progress is already being made. As technology and consumer expectations continue to evolve, we can expect virtual care to play an increasingly important role in ushering in truly integrated care.

Just be sure to watch out for providers wandering the hallways glued to their iPads the next time you’re in your physician’s office.

Zachary Hafner leads the Advisory Board’s strategy consulting practice.