Fast-changing regulations give virtual care startups a chance to seize the moment
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Image Credits: Ariel Skelley / Getty Images
For more than two decades, virtual care has slowly made inroads into American medicine.
A somewhat nebulous and overwhelming term, “virtual care” refers to the integration of products like telehealth, remote patient monitoring, prescription delivery and even behavioral coaching into the fabric of medical practice. And while some early entrants, like Doctor on Demand in the primary care telehealth space and Mercy Virtual for remote-monitoring programs, have achieved some traction, the space has suffered from a lack of consumer scale, challenges with government regulation and significant technological and usability barriers.
This is not for lack of promise or even early results. The University of Pennsylvania was able to reduce its 30-day readmissions rate for heart failure patients by 73% using aggressive virtual care methodologies like telehealth and remote monitoring.
And yet, over the past month, the rapid spread of COVID-19 changed everything.
The global pandemic has jolted American medicine into making groundbreaking changes. Changes that may forever alter the path of virtual care and provide key insights and lessons for entrepreneurs looking to seize this moment.
Chief amongst these are leapfrog advances in sensor technology allowing a “consumer-grade” user experience at scale. Historically, medical-grade sensor technology has resulted in a lackluster and poor user experience that requires significant patient compliance. Now, many sensors can be deployed “in the background” and require few patient lifestyle changes. Numerous players are now advancing on this development and providing other entrepreneurs with a guidebook forward.
Secondly, over the past month, federal and state governments have removed significant regulatory and reimbursement barriers to scaling virtual care. Now, and into the foreseeable future, historic barriers are tumbling down. Founders, and even some established startup players, are starting to take note.
While some of these changes, like technological and usability advances are the result of decades of hard won incremental progress, others like deregulation occurred in just an instant. Either way, these changes are likely to stay, in some form, for a long period of time.
Clinically-validated technology. Consumer-grade experience.
Just last year, I was at a medical technology trade show in Australia marveling at a novel wearable sensor patch. FDA-cleared, the wearable patch monitored a patient’s ECG, heart rate, body temperature and a number of other biometrics.
There was only one issue: when any patient pulled off the powerful adhesive that bonded the patch to their chest, it was immensely painful.
This type of poor user experience is common in the digital health space. From bulky desktop computers complete with 1980’s style buzz alarms to vibrating plastic necklaces, virtual care is beset by detractive and sub-par design experiences.
Not just aesthetically challenging, these oversights have devastating effects on adherence, and thus, the eventual success of virtual care programs. According to the Journal of Cardiac Failure, many randomized controlled trials for remote monitoring of conditions like heart failure are challenged by lack of patient adherence. Even for wearable devices, the challenge is hard as abandonment rates of between 29% – 33% occur within just the first 3-6 months.
And yet, over just the past few years, remarkable advances have occurred in this ecosystem to create extraordinarily friendly user design. COVID-19 has only served to accelerate this.
A great early example is Whoop, a wearable fitness and activity sensor which is now being studied by Australian researchers to monitor changes in respiratory rate to detect early signs of COVID-19. Part of what makes Whoop so appropriate — and scalable — as a solution is an intuitive consumer-friendly interface and re-charging times measured in days not minutes.
Perhaps the most extraordinary example is the Oura Ring. Traditionally viewed as a daytime activity and night time sleep tracker with famous users like Prince Harry, the company immediately re-tooled its solution to enable preventative tracking of potential COVID-19 cases. In partnership with UCSF Medical Center, the manufacturer will be analyzing the biometrics of the hospital’s staff in order to detect early signs of the disease. Part of what enabled Oura to so rapidly gain traction is that it requires virtually no input from users, has an intuitive and stylish design, and requires a re-charge approximately every week. In this specific case, UCSF medical personnel can go about their daily activities without having to worry about check ins or clumsy data readings.
The lesson for entrepreneurs here is clear: contextually relevant UI and UX will provide a significant leg up when looking to gain market share in the virtual care space fundamentally altered by COVID-19. Entrepreneurs should look towards employing passive data collection, similar to the examples set by both Whoop and Oura, that maximizes delight in order to gain a leg up.
Government policy as an accelerant
A few months ago, I was sitting in a meeting on interstate licensure for physicians (i.e. enabling a physician licensed in one state to practice in another) when one speaker got up and lamented the lack of traction for cross-state licensure compacts.
In one instant, COVID-19 changed all of that. Just a few weeks ago, the Center of Medicare and Medicaid Services (CMS) issued immediate guidelines opening up telehealth visits, virtual check-ins and e-visits to those covered under Medicare and Medicaid for reimbursement and billing. Issuing multiple waivers and opening up numerous billing codes for physicians and other qualified health professionals, CMS opened the floodgates for adoption. These changes, building on top of notable Value Based Care (VBC) initiatives of the past five years, only serve to substantiate virtual care’s mainstream arrival.
More importantly, the Office for Civil Rights (OCR) issued guidance on non-enforcement for the type of technology that doctors can use to communicate with their patients. Now, doctors can use non-public facing technology like Skype, FaceTime, and even private chat-based applications to engage in visits with their patients.
Various states have followed CMS’ lead and have waived, either by legislation or by temporary decree, restrictions on doctors’ ability to practice across state lines. Whereas just a month ago, it was impossible for a doctor licensed in Missouri to practice across state lines and visit a patient in Florida, it is now possible to do so.
While enacted to ease the burden on medical providers during the COVID-19 outbreak, these announcements have already had some significant impacts on the growth of virtual care and where entrepreneurs can move next. Specifically, they are enabling a distributed marketplace model for services in virtual care as well as the scale of wraparound healthcare services.
One such example is MedCall Advisors. Prior to COVID-19, MedCall served partners for workers’ compensation claims on a state by state basis. Now that inter-state licensure restrictions have been lifted, the company is hiring over 200 providers to enable telehealth services across state lines. In effect, Medcall has moved to a distributed marketplace model, spreading work across the country and creating a real-time matching system for supply and demand.
Now, nearly any entrepreneur can build a distributed labor marketplace business and more accurately match supply to demand, given the current regulatory environment.
Additionally, some established startups, formerly specializing in D2C “edge” use cases are now seizing on these regulatory changes to create new wraparound solutions.
Ro is a good example of this. Formerly known as Roman and specializing in mail-order medication for men, Ro rapidly stood up a primary care telehealth service and COVID-19 screening application.
Entrepreneurs though can take note of Ro’s strategy. By using innovative tech like a chatbot to drive users into a wraparound for other ancillary solutions like coaching, mental health, diet, and lifestyle recommendations, Ro is increasing the Long Term Value (LTV) of its user base and creating an entirely new lead-generation model for its business.
Ready for take-off!
It would be an understatement to say that the past month has been anything other than unprecedented. And yet, it is times like these where opportunities naturally emerge. Nowhere is this more relevant than in virtual care which is providing entrepreneurs lessons on how to rapidly respond to a changing market. Chief amongst these is employing better UI to achieve scale in a field that has a checkered history in that area. Additionally, changing government regulations are acting as an accelerant for some entrepreneurs to pilot new and pathbreaking business models.
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