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As we’ve listened to providers describe their reactions to this pandemic, telehealth continues to be a pervasive theme at the foundation of their response.

They refer to this as a “watershed” event that will permanently change the way healthcare is delivered. In that context, many expressed concern that the current relaxation of regulations, and as importantly, the parity payments for telehealth services will be retracted as the crisis eases. While most agree that the relaxation of HIPAA regulations is likely temporary, the question remains as to how telehealth reimbursement is likely to play out.  

As providers think about the scope and substance of their service delivery model going forward, it may be helpful to consider the broader context of the pre-pandemic telehealth landscape.  Even with relatively slow adoption, we’ve seen the rise of several national vendors that have been able to offer 24/7 virtual visits to patients across the country at a price of $40-$50 per visit. A major advantage for these companies is that the overhead costs for participating providers are de minimis. They require little if any office space, supplies or support staff. 

On the other hand, consumer surveys have shown that patients prefer telemedicine visits with their own doctor who has access to their medical records. A 2017 national survey showed that almost three times as many people were willing to use telemedicine to see their own doctor versus someone outside that practice. Furthermore, 60% of those respondents felt it was important for the telemedicine provider to have access to their health records.1

Based on these consumer preferences, local providers should have a natural advantage over the national vendors. Their established relationships with patients will likely justify somewhat higher reimbursement levels for similar services. That said, in the long run, it is unlikely that patients and payers will tolerate prices equal to those for face-to-face visits. Local provider groups will have to determine how to streamline their workflow and overhead in order to create a sustainable telehealth capability. Employing a telehealth platform that maximizes efficiency as well as a staffing and space model that reduces overhead will be key success factors.  

Another major challenge for local providers will be their overall availability. National vendors offer 24/7 virtual visits with minimal or no wait times. While local providers may want to use these national vendors as their “wrap around” network, they run the risk of losing patient volume and allegiance to this inexpensive, convenient alternative. It may be possible and preferable for local providers, particularly those participating in provider networks, independent physician associations (IPAs) or accountable care organizations to find ways to band together in large enough “coverage” groups to significantly expand their availability.

Telehealth is here to stay. The winners and losers have yet to emerge, but patients will ultimately benefit most if their own providers can figure out how to incorporate safe, effective, and efficient telehealth services into their practices.


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Dr Lustick

Dr. Martin Lustick

Senior Vice President, NextGen Advisors

Dr. Martin Lustick is a principal and senior vice president with NextGen Healthcare focused on supporting provider organizations in their successful transition from volume to value-based care.

Dr. Lustick earned a BA in History from Cornell and an MD from Columbia. After completing his pediatric residency at Children’s Hospital National Medical Center in Washington, DC, he was in clinical practice for 17 years with Kaiser Permanente of the Mid-Atlantic States. While there, Dr. Lustick held various management and leadership roles, including chief operating officer for the 800-physician medical group. He oversaw development of their hospitalist program, population health capability, and open access delivery model.

Dr. Lustick then served as chief medical officer for ThompsonHealth—a small health system in Canandaigua, NY—where he provided clinical oversight for hospital, SNF, nursing home, IT, and out-patient physician practices.

In 2005, Dr. Lustick assumed the role of SVP & CMO for Excellus BCBS which covers 1.6 million lives comprised of Medicare, Commercial, and Medicaid. In his 13+ year tenure there he led a variety of strategic initiatives, including a patient-centered medical home program which served as the foundation for the plan’s value-based payment strategy. He also led the implementation of an automated authorization program for care management services, development of a clinical quality improvement strategy, and creation of innovative programs in management of low back pain, screening and prevention, opioid addiction, and chronic disease management.

Dr. Lustick has also been very active in the community, serving on boards and committees confronting issues such as: healthcare capacity planning, Health Information Exchange, mental health, substance use disorders, social determinants of health, and childhood obesity.