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THE VIRTUAL DOCTOR MODEL MEANS BIG COST SAVINGS – IF PEOPLE USE IT

Visiting the doctor can be a pricey affair. Even before the potential costs of lengthy and complex treatments, just popping by for a consultation can take a financial toll. The cost of a 15-minute visit to the doctor’s surgery in Hong Kong, for example, is the equivalent of around US $50.

And the medical costs are only half the story. There are plenty of other, less obvious, expenses to consider. American researchers recently looked into the total financial implications of a short visit to the doctor on employers, publishing their findings in the American Journal of Managed Care. For starters, the researchers found that an average doctor’s appointment takes 121 minutes, with just 20 minutes of that time allotted to the consultation – the rest is split between waiting and travelling.

Having calculated that the average out-of-pocket cost for such a visit is US $32, they then discovered that the opportunity cost – that’s the value of the productivity the worker has lost by being out of the office – stands at US $43 per visit, making the total cost US $75. The paper put the total yearly opportunity costs in the United States at US $52 billion.

On the face of it, these costs may seem unavoidable to most employers. After all, no business wants to stop staff seeking medical advice when they need it. But that’s not to say there’s nothing corporations can do to bring these costs down.

Doctor at a distance

Enter the virtual doctor – the 21st century alternative to the traditional version. Just to put minds at rest, we’re not talking about robots here. The doctor in this instance is very much flesh and blood – it’s the interaction that’s virtual. Essentially, virtual doctors allow patients to seek medical advice from a real doctor through their computer or mobile device. Consultations can take place over services such as Skype – with no travel time, no waiting time and a minimal dip in productivity.

Virtual doctors allow patients to seek
medical advice from a real doctor through
their computer or mobile device.

While it may sound like something from a sci-fi movie, virtual doctors are fast becoming more established throughout much of the Western world. According to a report by US market research company Verify Markets, the American virtual healthcare market is predicted to be worth US $3.5 billion by 2022, while analytics firm IHS expects the use of virtual consultations to double by 2020.

Here in Asia, the concept is very much in the ascendance too. Singapore-based health tech company RingMD already boasts five million registered users to its remote consultation service, for instance. Meanwhile, the China-based We Doctor was valued at around US $1.5 billion in September 2015 – as sure a sign as any that this latest medical development is no passing fad.

And we can certainly see why such a model has the potential to be very successful across Southeast Asia, where on one side we have many remote regions that make a traditional in-person visit difficult, and where we also have regions with a low doctor-to-population ratio. The virtual doctor model has the potential to fully address both of these challenges.

How it works

So, how exactly does it work? While there are slight variations to the service depending on the provider, all share the same general principle: that patients can receive expert medical advice without visiting the doctor’s surgery.

The aforementioned We Doctor, for instance, offers patients three basic options: a video consultation, a photo consultation and a telephone consultation. The types of symptoms present in the patient generally dictates which service is required. Once the doctor has enough information to make a diagnosis, they can issue a prescription online for the patient to collect. Meanwhile, Singapore’s RingMD offers a straightforward video consultancy service, from where doctors will either prescribe medication, arrange for the patient to visit a doctor face-to-face, or refer on to a consultant for further video examination.

Variations of this model are growing in popularity across the world. Some offer an initial text or online enquiry service, while others – like the San Francisco-based CrowdMed – allow patients to upload their symptoms to a secure online portal and essentially crowdsource a diagnosis, with several medical professionals offering their take on the ailment.

While it’s unlikely that virtual medical care will ever totally replace face-to-face, the case for adopting a virtual approach for diagnosis and treatment of a wide range of medical complaints stacks up from both a convenience and financial point of view.

Once the doctor has enough information
to make a diagnosis, they can issue a
prescription online for the patient to collect.

Clear cost savings

When it comes to building a business case for virtual doctors, the numbers speak for themselves. The American Management Association estimates that an American corporation with 300 employees each visiting the doctor three times a year would incur costs in the region of US $180,000 per annum, converting even 50% of those visits to e-consultations would reduce overall costs tremendously.

In fact, cost savings are potentially very large, as the majority of health insurance providers cover virtual consultations while some virtual doctor services don’t charge for initial enquiries. Another study published in the journal Health Affairs found one specific virtual doctor service – Virtuwell – to reduce the cost of consultations by up to $88 per visit in the United States sample.

While there is yet to be a wide-scale study into the benefits of virtual doctors to employers in Asia, we can expect them to follow in the footsteps of the findings from the US – where a 2014 report by a leading professional services company found that virtual medical care has the potential to deliver savings of US $6 billion to employers. Meanwhile, the Geisinger Health Plan study, also conducted in the US, found that implementing virtual healthcare programmes generated savings to employers of around 11% – estimating the return on investment to be about US $3.30 for every $1 spent.

There is also much evidence to suggest that virtual doctors are a more effective way of managing a number of long-term health conditions that plague the Asian world. Take diabetes and cardiovascular disease (CVD) for example – 60% of the world’s diabetic population live in Asia while CVD is the leading cause of death in the region. A 2011 report by the Commonwealth Fund found that e-consultants resulted in a drop of 62% in 30-day readmission rates for such conditions – representing savings in the region of US $1,000 to $1,500 per patient. Plus for high blood pressure, a randomised controlled study of 17,401 patients as reported by the American Council on Science and Health, found that e-monitoring of blood pressure resulted in “significantly improved blood pressure management.“ This is a condition prevalent in up to 35% of the Southeast Asian population.

Just what the doctor ordered

Whatever you refer to it as – e-medicine, virtual doctor or telehealth – there’s no mistaking the fact that the business model has shown itself to be a success throughout the world. The fact that the global market is now estimated to be worth US $2.78 billion is testament to the fact that we are witnessing a game-changer here rather than a flash in the pan.

The global virtual doctor market is now
estimated to be worth $2.78 billion,
a testament to the fact that we are witnessing a
game-changer here rather than a flash in the pan.

Plenty of businesses from all over the world have reported seeing cost savings as a direct result of virtual doctor initiatives. One example is global consumer engagement firm PowerReview. Its 140 employees and their families used its telemedicine benefit just 51 times in the first half of 2016 yet it still brought the company savings of almost US $6,000 in healthcare costs. And there are plenty of others too: Starbucks, Mercedes Benz and Dell are all known to offer such benefits to their employees.

It is now up to employers throughout Asia to follow suit – and there are plenty of reasons why they should. Remember that stat from earlier that the total cost – including loss of productivity – for a single employee’s visit to their physician is US $75? Compare that to the Society for Human Resource Management’s claim that the average telemedicine plan costs around $120 per employee per year and the business case is as clear as day.

But as with any wellness initiative, the value can only be realised if both corporations and their employees get on board. The evidence is there to suggest that the corporations are holding up their side of the bargain: a recent report by the National Business Group on Health found that nine out of 10 large employers would offer their staff access to telemedicine in 2017.

But do employees know such schemes are available to them? Maybe not. The 2016 Business Journal by Herald and Review found that despite some 70% of large businesses offering virtual consultations to their employees, only around 3% had engaged with the scheme. This could be because of a lack of awareness of its existence, a lack of understanding about how it works or natural scepticism about something new. The onus is therefore on employers in the region to ensure that staff are not only aware that such schemes exist, but that they have full information about how they work and. After all, exposure is key to the success of any new innovation, from the TV to the mobile phone.

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Inova care is an industry leading consulting and health care administration company specializing in managed care, clinical pathways and cost containment solutions for corporations and insurance companies.

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