Some of the biggest names in healthcare are taking advantage of the latest video technology available from tablets, smartphones, and desktop computers to virtually link doctors to their patients.
This trend, known as telehealth, could be good for an array of healthcare companies from pharmacies like CVS Health (NYSE:CVS) and Walgreens Boots Alliance (NASDAQ:WBA) to insurance companies looking for ways to keep their enrollees healthy and costs down.
Investors in pharmacy chains may benefit from new customers and revenue. Meanwhile, strengthening relationships between doctors and patients should lower the need for expensive hospital care, which is beneficial for both consumers and investors in health insurer stocks like Aetna (NYSE:AET), Anthem (NYSE:ANTM), Cigna (NYSE:CI) and UnitedHealth Group (NYSE:UNH), which have expanded their networks of telehealth providers to gather a new source of revenue.
Walgreens this week said it would expand its telehealth platform to 25 states by the end of this year after about a year piloting around-the-clock access to physicians from privately-held MDLive through the pharmacy chain's website. The service, which costs $49 per virtual visit, links Walgreens customers via a tablet, desktop, or mobile app.
"Our society truly values anytime, anywhere convenience," said Adam Pellegrini, Walgreens' divisional vice president of digital health said in announcing the telehealth expansion. "With a growing need for access to affordable healthcare services, we believe telehealth solutions can play an important role in helping to improve patient outcomes and continues our mission to provide a seamless, omni-channel digital health experience."
For non-emergencies, telehealth is considered an accepted form of health communication, offering patients piece of mind, certain diagnoses for routine maladies, and increased access amid a doctor shortage, particularly in rural or areas where patients might have to travel long distances for primary care.
For now, Walgreens said its $49 virtual consultations will have to be paid for by customers with cash because insurance coverage is limited.
But health plans are escalating their coverage of telehealth from a variety of medical care and mental health providers. Health insurers see telehealth as a form of value-based care that gets patients the right care, in the right place, and at the right time.
Health plans say a virtual consultation with a doctor via tablet, smartphone, or other device can improve patient experience in a face-to-face encounter. Knowing a doctor is on hand to discuss a child's 103-degree fever also increases peace of mind. There are also substantial cost savings involved with potentially avoiding a trip to the emergency room, which can cost a health plan $1,000 or more and a patient a co-pay of $250 or more.
Earlier this spring, UnitedHealth Group announced the biggest foray yet by a health insurer when it said it would provide access to three different provider networks that would connect physicians by computer, tablet, or smartphone.
UnitedHealth said 20 million Americans could access and receive coverage from telehealth providers by next year. UnitedHealth members are getting access to Doctor On Demand, NowClinic, and American Well.
Insurers say they will continue to expand the offerings as health plan enrollees gain more experience using the technology. Depending on what health plan is purchased by the individual or employer, the virtual visit is covered just like a trip to the doctor's office.
Anthem, for example, began to offer its LiveHealth Online program in 2013 to most individual and employer-based plans. Anthem spokeswoman Lori McLaughlin also said this telehealth program is being offered to "exchange members in the 11 of 14 states where we have affiliated health plans."
"We have about 13 million members with covered telehealth benefits now and project 20 million to be covered in 2016," McLaughlin said. "We also are one of the very few plans to offer it to Medicare Advantage members, who don't pay anything out of pocket to use LiveHealth Online."
For health insurers, if a consultation or advice from a doctor can keep a patient from a costly four-figure trip to the emergency room or having to wait until the next day for a trip to the doctor's office where an office visit is $100 or more -- not including tests -- that saves the health plan and consumer money. Investors will want to keep an eye on this telehealth trend and just how successful it is at slowing rising medical expense levels.