What if someone told you that if your health system leveraged the right type of virtual care platform you could add 2,000 new patients by offering a virtual care service line?
What if you could ultimately convert a quarter of them into primary and specialty care services patients? What if, over time, this could turn into a revenue bump of $1.5 million annually? This may sound too good to be true, but depending on the size of your healthcare system, it isn't. It could be a realistic return by adding the right virtual care platform to your health system's care continuum.
Last year, an analysis from the Advisory Board estimated that as many as 20 percent of virtual care patients would theoretically convert to being full-service patients of a hospital or health system at an estimated annual revenue increase of approximately $3,000 per patient. This is great data that theoretically demonstrates the value of virtual care, but Carrot Health, a healthcare analytics and business intelligence company, is moving beyond the theoretical. In an independent, real-world analysis of a major health system using the Zipnosis platform, even more impressive outcomes were demonstrated. The study followed virtual care users who had not received outpatient care from the health system for 24 months prior to their virtual visit. Of these virtual care users, approximately 25 percent converted to a health system patient by receiving in-person care within 12 months of their virtual visit, resulting in an average annual revenue increase of close to $3,000 per converted patient.
This study is important because it's one of the earliest analyses demonstrating significant return for virtual care that goes beyond transactional—which is not typically where the greatest potential for health system return can be found, given that many virtual visits cost between $25 and $49.
Until now, there has been little data on how effective virtual care programs are at attracting—and converting—new patients who will use the broader spectrum of care services a health system has to offer. Let's take a closer look to fully understand the implications of this ground-breaking study.
Study methods
Carrot Health independently analyzed patient visit data collected from the health system's electronic medical record (EMR) system. The study followed virtual care users who had not received outpatient care from the health system for 24 months prior to their virtual visit (the health system, like many across the country, defines these healthcare consumers as "non-patients").
The study compiled all encounters each patient had with virtual care, across one health system, over a four-year period, as one data set. This data set was compared with a data set of all consumers in the market, and then with the 250 million adults across the country. Carrot Health then examined those three data sets and mathematically assembled clusters of customers to highlight similarities and differences in how these consumers behave with regard to virtual care, looking at their journey through both virtual care and in-person patient touch points.
This comparison yielded an "opportunity assessment" to aid health systems in determining how much potential upside they could glean from virtual care, taking into account which types of patients are inclined to use virtual care as a gateway to other health services.
From a qualitative perspective, the study found that consumers are not affected by the challenge of "siloes" in healthcare. Healthcare consumers appear to view their utilization of a health system's virtual and in-person services as one unified patient journey, and that is what health systems—and vendors—should strive to provide. Health systems that think about one seamless patient journey, and are focused on overall loyalty and "stickiness," are likely to be successful in deploying virtual care strategies for patient acquisition.
Results: A deeper dive
Of the 974 virtual care users who started a virtual visit, 242 had at least one in-person visit within 12 months of their virtual encounter, resulting in a conversion rate of 24.8 percent. On average, the virtual care users who converted to health system patients had three subsequent in-person visits, generating $2,927 of additional revenue, within 12 months of their online encounter. The conversion of 242 patients (24.8 percent) translated to more than $708,000 in incremental annualized revenue. If you take that equation and apply it to a health system that had 2,000 new patient virtual visits, at a 25% conversion rate, this number balloons to $1.5 million.
So what does this all mean? The study found that certain segments of consumers are more inclined to use virtual care than others. Within those segments, patients express varying degrees of loyalty and stickiness to the health system, which can be enhanced by virtual care. Meanwhile, among the larger cohort of non-customers/non-patients, the study found that a certain percentage can be converted to become downstream customers of the health system, above and beyond a single virtual care visit. This data supports the notion that the right virtual care service offering isn't a nice to have – it's a need to have.
Choose a virtual care approach that is made to stick
How can other health systems replicate the success of the health system studied by Carrot Health, and at scale? The key is to understand the market, hone in on the right demographics, and then offer a seamless care experience that melds the best aspects of virtual and in-person care. For instance:
• Younger, healthier, unaffiliated patients do not want to use phone or video. They want an asynchronous (storing and forwarding of information vs. live, synchronous) mode of interaction.
• Patients in the younger, healthier demographic are most likely to be net new patients or switch to a new health system.
• Phone and video are the right modes for retaining existing patients 45 years or older.
• Patients are becoming affiliated with a health system based on their ability to provide convenient care options.
• Traditional, out-sourced telemedicine services do not create a "sticky" relationship. Health systems must use their clinicians and their brand to drive long-term value.
What's Next
The data from this study strongly supports what I've known to be true for years: Health systems can leverage virtual care to promote patient acquisition and conversion, driving significant incremental value to their bottom lines. Future study is needed, but as our society becomes more and more comfortable with technology, we can rest assured virtual care will play a vital role in the care continuum. By integrating virtual and in-person care, health systems can achieve the goal of delivering the right care in the right place, while also improving their margins through growing the overall patient base. The time is now.
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Jon Pearce, CEO of Zipnosis, is a healthcare entrepreneur who is infatuated with using technology to drive the transactional cost of healthcare to $0.00. Pearce envisions a future of healthcare dominated by data and devices—a stream of healthcare data—that can fundamentally recast how we pay and value our health in amazing ways.
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.