DEFINING

TELEMEDICINE’S
ROLE
THE VIEW FROM
THE C-SUITE
A SAGE GROWTH PARTNERS STUDY
FEBRUARY 2018

An examination of the attitudes, perspectives,

and plans of healthcare leadership that are
shaping telemedicine’s application, value, and potential
EXECUTIVE SUMMARY
TELEMEDICINE HAS BEEN touted as
primed for explosive growth, with
compound annual growth rates (CAGR)
estimated between 18% and 27.5%. In-
side the typical health system, however,
a more sober reality exists. After sig-
nificant spending on electronic health
information, healthcare executives are
KEY FINDINGS FROM THIS RESEARCH INCLUDE:
 ore than half of respondents
M The primary setting for
have adopted telemedicine;
most non-adopters see it as
a priority.
However, telemedicine budgets
are currently modest, with most
respondents reporting budgets
of less than $250,000. Budgets
are generally expected to grow
next year, with more than half
of executives expecting growth
of up to 25%. IDNs and AMCs are
more likely to anticipate growth
than community hospitals.
 obile apps and outpatient
M
care are viewed as the next
frontier for telemedicine use.
A SAGE GROWTH PARTNERS STUDY: DEFINING TELEMEDICINE’S ROLE—THE VIEW FROM THE C-SUITE
interested in telemedicine but cautious
about committing their limited budgets
to it given the complex regulatory envi-
ronment and reimbursement challenges.
To learn firsthand about the views
of healthcare leaders towards tele-
medicine, Sage Growth Partners (SGP)
conducted primary research with more
telemedicine use today is
for emergency cases in the
hospital (29%), followed by
remote patient home monitoring
(21%), and non-emergency
hospital cases (20%).
Most executives prefer to buy,
not build, devices and software
and most prefer to have a single
vendor, enterprise-wide solution.
Most healthcare leaders
believe that telemedicine
has transformed the standard
of care for stroke, and that
behavioral health, neurology,
primary care, and cardiology
are poised for transformation.
than 100 healthcare executives.
The research explored telemedicine
adoption rates and drivers, budgets
and ROI, the technology’s role in
delivering care, and the factors that
are important to executives when
selecting a telemedicine solution for
their organization.
Executives’ top must-have
capability in their telemedicine
solutions is the security of
data and devices / HIPAA
compliance, with 92% rating
this as a must-have. Also of
importance were high-quality
image and audio resolution
reliable connectivity, 24/7 tech
support, easy-to-use interface
and single sign-on, and EMR
integration.
Nearly half of executives estimate
that their current telemedicine
solution fails 15% of the time, yet
70% of executives consider reliable
connectivity to be a “must have.”
2
OVERVIEW
HEALTHCARE EXECUTIVES ARE EAGER
to adopt telemedicine to more readily
connect patients to providers, especially
when certain specialists are physically
unavailable on site. However, widespread
telemedicine adoption has been hindered
by the uncertain reimbursement and
regulatory landscape.
Despite the uncertainty, the telemedi-
cine industry is growing with hundreds
of vendors and do-it-yourself solutions
that span many care settings and serve
a variety of conditions, specialties, and
populations. For a comprehensive sector
map, click here.
On the higher end of the acuity
spectrum, emergent use cases such as
telestroke have become more mature, to
the point that they are widely acknowl-
edged to have transformed the standard
METHODOLOGY AND RESPONDENTS
IN Q2 2017, SGP undertook a three-part
telemedicine primary research study to
gain insight into healthcare executives’
usage of, plans for, and attitudes about
the role of telemedicine. In phase one,
SGP conducted qualitative research,
including individual in-depth inter-
views with 15 C-suite executives from
integrated delivery networks (IDNs),
academic medical centers (AMCs),
community hospitals, and specialty
hospitals. In phase two, SGP conducted
preliminary quantitative research in an
online survey with 50 executive respon-
dents, of which 76% were C-suite execu-
tives and 24% were service line leaders.
Thirty-six percent of respondents rep-
resented IDNs, 36% were in specialty
hospitals, 24% in AMCs, and 4% were
in community hospitals.
SGP used the insights from these ini-
tial studies to design a more extensive
quantitative survey deployed to C-suite
executives and service line leaders in US
health systems and hospitals. Nearly 100
leaders completed this online survey. Of
the 98 survey respondents, the majority
were executives in the C-suite:
A SAGE GROWTH PARTNERS STUDY: DEFINING TELEMEDICINE’S ROLE—THE VIEW FROM THE C-SUITE
of care. On the other hand, the value
proposition of in-home remote patient
monitoring (RPM) is evolving under
value-based reimbursement, as organiza-
tions seek to enable elderly patients to
age at home as they attempt to manage
the total cost of care, often spurred by
triggering events such as financial pen-
alties for readmissions. On both ends
of the acuity spectrum, new use cases
are emerging and growing in popular-
ity – supported by a variety of vendors.
For instance, the Mayo Clinic recently
reported on their use of InTouch Health
solutions for their neonatology program,1
while Jefferson Health reported on using
TelaDoc for post-acute virtual visits.2
Faced with a wide array of vendors
and solutions, buyers are seeking
to better understand and calculate
• 59% – C-suite
executives (CEOs, CFOs,
CIOs, CMOs and CNOs)
• 41% – Service line leaders
or department chiefs
Almost a third of respondents were in
IDNs, and another third were leaders in
community hospitals. The breakdown
was as follows:
• 30% – IDN executives
•3  0% – Community hospital
executives
• 25% – Specialty hospital executives
• 16% – AMC executives
Except where noted, the data in this
report is taken from this longer quanti-
tative survey.
TERMINOLOGY DISCLAIMER
AND DEFINITION
In SGP’s qualitative interviews with C-
suite executives at hospitals and health
systems, a wide array of terms are used
to describe technology-enabled health-
care delivery. Terms such as “virtual
care,” “telehealth,” and “telemedicine”
encompass technology that connects
medical professionals with patients
the return on investment (ROI) for
telemedicine uses.
SGP sought to more deeply under-
stand the application and adoption
of telemedicine in the dynamic health-
care landscape. To learn more about
the attitudes of healthcare executives
towards telemedicine, SGP conducted
an extensive series of secondary and
primary market research studies. In Q1
2017, SGP published a telehealth report,
“Making the Connection: Is the
telehealth market ripe for a boom?”
In Q2 2017, SGP conducted qualitative
and quantitative market research studies
to further understand the rapidly evolv-
ing telemedicine landscape. This report
summarizes the key findings from our
most recent research.
through virtual visits and remote moni-
toring, while terms like “digital health”
and “connected care” are used even
more broadly to encompass technolo-
gies that are not necessarily strictly
medical, such as using a consumer
device to transmit activity data to a
smartphone application.
TERMINOLOGY DEFINITION
For the purpose of its longer quantita-
tive study, SGP provided respondents
with the following definition of
telemedicine:
“Understanding that there exists a
wide variety of concepts and defini-
tions regarding telemedicine, tele-
health, virtual visits, virtual care,
and remote monitoring, for the
purpose of this study, we will use
the term ‘telemedicine’ to broadly
encompass all of these. We will use
the term ‘telemedicine’ generally to
describe any technology, tools, plat-
forms, and programs that connect
providers and patients who are not
physically at the same location at
the time the care is provided.”
3
TELEMEDICINE ADOPTION
Telemedicine is a Fairly High Priority
but the Market is Still Immature
WHILE MOST healthcare executives
view telemedicine as a strong and FIGURE 1:
growing priority for implementa- Where is your organization on the telemedicine journey?
tion in the next three years, their
wariness of investing in yet another Already building
new technology has constrained or have built your
own solutions
adoption rates and budgets. As of
mid 2017, 56% of respondents to
SGP’s quantitative survey report 27%
having implemented telemedicine
in their organization, 24% are
actively seeking telemedicine solu-
tions, and 20% are just beginning to 20% 24% 29%
investigate telemedicine solutions.
(Fig. 1)
On the surface, these adoption Just learning Actively Already working
about what looking for with a vendor or
rates seem robust. However, given is out there solutions vendors
that the definitions of telemedicine
are wide and varied, a sober read of
the data appears to present a more
limited telemedicine adoption
curve, evidenced by fairly modest
capital investments.
FIGURE 2:
Over the next 3 years, how would you describe the relative level of priority of
FOR NON-ADOPTERS, investments in telemedicine solutions?
TELEMEDICINE IS A MEDIUM
TO HIGH PRIORITY
While 44% of respondents have 50% 47.9%
not yet adopted telemedicine, 87%
38.8%
say it is a medium to high priority. 40%
(Fig. 2)
30%

• 39% report that investing 20%

13.3%
in telemedicine is a high 10%
strategic priority
• 48% report it as a medium Low Medium High
strategic priority
• 13% report it as a low priority

“Many hospitals are looking at telemedicine as a potentially transformative

and revolutionary development of the healthcare system
and of the way they deliver care. So this is really big.”
–George Gellert, MD, CMIO, CHRISTUS Health

A SAGE GROWTH PARTNERS STUDY: DEFINING TELEMEDICINE’S ROLE—THE VIEW FROM THE C-SUITE 4
Access, Quality, Costs, and Branding Drive Adoption
SURVEY RESPONDENTS were asked how
they believe telemedicine solutions can
contribute to their success in a variety
of settings, from inpatient locations to
the home. They list the following as the
top drivers for adopting telemedicine:
• Improve quality of care
by increasing access to
specialty care
• Improve patient acquisition
by expanding catchment area
•R  educe cost of care by reducing
unnecessary ED visits
• Improve patient retention by
reducing leakage
“More timely care
will drive revenue
and patient satisfaction,
which is our
ultimate goal.”
–Tom Johnson,
CIO Penn Highlands Healthcare
In the inpatient setting, respondents
view telemedicine as important for
alleviating physician shortages, improv- “What we’re looking
ing access to care, and lowering the cost for now is a
of care. Home-based or app-based uses
telemedicine company
are seen as more important for enhanc-
ing brand awareness. In home-based
that can co-brand
monitoring, respondents see value in a complete offering.
lowering the cost of care and improving We don’t have
outcomes. that yet; that’s what
we’re still working on.”
TELEMEDICINE’S POTENTIAL –Tom Johnson, CIO Penn
TO DRIVE A STRONGER BRAND Highlands Healthcare
In SGP’s qualitative interviews, a num-
ber of executives underscored the find-
ings of the quantitative survey: that
telemedicine has tremendous potential These findings further support that
to help them attract and retain patients, a key driver for telemedicine adop-
and strengthen their brand. tion is consumer demand. In spite of
One COO stated, “We are looking reimbursement restrictions, healthcare
at telemedicine as a program that can organizations increasingly understand
expand our reach, making it more con- telemedicine’s ability to drive evolv-
venient for existing patients, or allow- ing metrics like consumer satisfaction,
ing us to attract new patients into our brand recognition, and patient acquisi-
system. With millennials, being seen tion and retention.
at their convenience is more important
than building a relationship with a
physician over time.”

FIGURE 3: How would you rank the following reasons for adopting telemedicine in order of most compelling (1) to least compelling (8)?

n 1 (most) Improve quality of care by increasing access to specialist care

n2 Improve patient acquisition by expanding catchment area

n 3 Reduce cost of care by reducing unnecessary ED visits

n 4
Improve patient retention by reducing leakage

n 5 Expand reach into ambulatory settings, SNFs, and patient

home without additional brick-and-mortar
n 6
Improve quality of care by integrating and
standardizing workflow best practices
n 7
Reduce cost of care by aligning patient care to most
n 8 (least) appropriate setting

Reduce cost of care by reducing inpatient length of stay

0% 20% 40% 60% 80% 100%

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TELEMEDICINE BUDGETS AND ROI
Budgets are Modest but Growing
SGP’S RESEARCH SUGGESTS that most
executives are highly interested in us-
ing telemedicine across a variety of
FIGURE 4:
locations and specialty uses, but they What amount do you estimate your entire organization currently has budgeted
haven’t yet invested significantly. Of for telemedicine this year?
those who have telemedicine solutions
in their facilities today (Fig. 4):
40.8%
40%
• 66% have budgets of $250,000
or less (41% have budgets of
$100K or less and 26% have bud- 30%
gets of $100K to $250K) 25.5%
• 34% have budgets over $250K
(9% exceed $1M)
20%

13.3%
11.2%
9.2%
“[There is] no insurance 10%

company support...
Getting an insurance
0%
company to pay for these $0- $100- $250- $500- $1M-
services would cause this $100K $250K $500K $1M $5M
to boom. Everyone wants
to do it, they just can’t
figure out how to make
any money on it.”
–Sunil Eappen, MD, CMO, FIGURE 5:
Mass Eye and Ear Infirmary Does your organization intend to increase its budget for telemedicine
in the next year?

BUDGETS ARE INCREASING

While budgets today are modest, they 60% 58.6%
are growing. Nearly three-quarters of
respondents with existing telemedicine 50%
solutions expect their telemedicine bud-
40%
get to increase next year.
30%
• 26% expect their budget to 25.9%

stay the same 20%

• 59% expect it to increase
10.3%
up to 25% 10%
• 14% expect it to increase 1.7%
3.5%
more than 25% 0
No, No, it Yes, Yes, Yes,
• Only 2% expect it to decrease it will will stay it will by by
decrease the increase 25-50% 50-75%
These findings demonstrate that adop- same up to
25%
tion rates and budgets for telemedicine
are on an upswing, but that overall
investment is still relatively small. 2.1%

A SAGE GROWTH PARTNERS STUDY: DEFINING TELEMEDICINE’S ROLE—THE VIEW FROM THE C-SUITE 6
INVESTMENTS VARY BY
ORGANIZATION TYPE FIGURE 6: Breakout by respondents’ organization type
The survey reveals that respondents’ INTEGRATED DELIVERY NETWORK SPECIALTY HOSPITAL n N
 o, it will
telemedicine budget plans differ by type decrease
3.6% 3.6%
of organization. AMCs and IDNs are 12.5%
10.7% 17.9% n N
 o, it will
most likely to expect their telemedicine 37.5% 12.5% stay the
budgets to increase, while specialty and n=28 n=8 same
community hospitals are most likely to 64.3%
37.5% n Yes,
hold steady at their current investment
it will
levels. As shown in Figure 6: increase
COMMUNITY HOSPITAL ACADEMIC MEDICAL CENTER up to
• AMCs and IDNs are most likely 25%
4.4% 6.3% 6.3%
to be increasing their budget 13.0%
26.1% 6.3% 6.3%
n Y
 es, by
•S  pecialty hospitals and community 25-50%
n=23 n=16
hospitals are somewhat more
75.0%
n Y
 es, by
likely to hold their budgets steady 56.5% 50-75%
(38% and 26%, respectively)

Projected Encounters and Revenue from Telemedicine

SGP ASKED RESPONDENTS what
percentage of their encounters and FIGURE 7: In three years, what percentage of your organization’s patient
revenue are likely to involve tele- encounters and revenue do you expect to come from telemedicine?
medicine in the next three years.
50% 46
As shown in Figure 7, 65% expect
less than 15% of their encounters to
40% 36 40%
be virtual in that timeframe and 77% 31
29
expect less than 15% of their reve- % VIRTUAL 30% 30%
24
nues to be generated by telemedicine.
n 0  -5%
Of course, in three years, much 20% 20%
n 5  -15% 13
can change — a single move by CMS
n 1 5-25% 10% 7 10% 7
to increase their support for and
n 2  5-50% 2 1
reimbursement of telehealth could
n 5  0-75% 0% 0%
significantly modify this forecast. Percent of total patient en- Percent of total revenue
counters that will that will come from
be virtual in 3 years telemedicine in 3 years

“For us, the business case is doing the right thing for the patient.
If we can use a $300 telemedicine consult to connect with a specialist
that helps us safely keep the patient in our facility, then the patient can avoid
a $20,000 helicopter ride. The irony is that the helicopter costs
our health system nothing, but we pay for the consult.”
—Christopher Hall, MD, CMO, Providence St. Mary Medical

A SAGE GROWTH PARTNERS STUDY: DEFINING TELEMEDICINE’S ROLE—THE VIEW FROM THE C-SUITE 7
Hospital and Outpatient Telemedicine Drive ROI
AS PAYMENT AND DELIVERY reform
continue to evolve, the metrics for
deploying and measuring the impact
of telemedicine continue to take shape.
For example, a plethora of studies
have shown that a telemedicine
encounter for “sniffles and sneezes”
is significantly cheaper on a unit cost
basis than a visit to an urgent care or
an emergency department, though there
is a growing debate over whether
telemedicine visits increase utilization
or serve as substitute for other care.3
But as value-based care increases, the
ROI of telemedicine adoption and
deployment is likely to be measured
beyond fee-for-service encounter
metrics.
When SGP asked executives if
they believed different locations of
telemedicine would generate positive
financial ROI, they responded that
(Fig. 8):
• Hospital-based, clinic-based,
and home-based telehealth
are most likely to generate ROI
•U  sing telemedicine for an
ambulance transport is least
likely to generate ROI

FIGURE 8: Telemedicine in this area can generate ROI for my organization within 3 years

n Yes

100%

80%

74.5%
72.5%
71.4%
68.4%

63.3%
60% 62.2% 62.2%

45.9%
40%

20%

0%
Outpatient Non- Emergency Remote Apps for Post-acute Apps for Emergency
clinic emergency cases in patient virtual care located virtual cases in the
cases inpatient the hospital monitoring post-acute at nursing patient- ambulance
cases in the (based specialty or long-term initiated during
hospital at home or care on facilities primary care transport
on mobile patient’s on patient’s
device) mobile mobile
device device

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TELEMEDICINE’S ROLE IN CARE
Telemedicine has Transformed the Standard
of Care for Stroke
TELEMEDICINE HAS BECOME widely
accepted as a proven clinical and finan- FIGURE 9: Do you believe that telemedicine has transformed
cial solution in certain cases such as the standard of care for stroke?
telestroke. Executives are eyeing tele-
medicine as a way to transform
behavioral health and other specialties
and conditions. YES NO I DON’T
70% 6% KNOW
More than two-thirds of respondents 24%
believe that telemedicine has already
transformed the standard of care for
stroke and it has the potential to similar- FIGURE 10: Select up to 5 specialties where telemedicine/virtual care solutions will
ly transform care in behavioral health, have the highest potential to transform the standard of care for your organization.
neurology, primary care, cardiology, and
Behavioral
other specialties. Health/Psychiatry 75%
Neurology 53%
• 70% of respondents believe
Primary Care 52%
telemedicine has transformed the
Cardiology 48%
standard of care for stroke, while
only 6% believe it has Infectious Disease 36%
not. (Fig. 9) Dermatology 32%
• 75% of respondents believe tele- Emergency Pediatrics 24%
medicine will potentially
Pain Management 24%
transform the standard of care
Oncology 18%
in behavioral health/psychiatry.
(Fig. 10) Neonatology 17%

• Approximately half believe tele- Rheumatology 17%

medicine will transform care in Surgery 15%
neurology (53%), primary care Other 10%
(52%), and cardiology (48%).
Gastroenterology 9%

Mobile Apps and Outpatient Care are the

Next Telemedicine Frontier
WITH A NUMBER of secondary research
sources estimating the compound annu-
al growth rate (CAGR) of telemedicine
to be anywhere from 18% to 27.5%,
industry growth rates for telemedicine
are intoxicating. However, an SGP man-
tra is, “don’t get drunk on CAGRs.” It’s
important to understand adoption rates
at a granular level over an established a lesser extent in home monitoring, its
time period. SGP’s research traces how future growth is expected to be greatest
executives use telemedicine today and in home and outpatient settings, cover-
how they plan to deploy it over the next ing an expansive range of specialties.
few years.
While telemedicine today is largely
deployed for a limited number of
specialties within facility walls, and to

A SAGE GROWTH PARTNERS STUDY: DEFINING TELEMEDICINE’S ROLE—THE VIEW FROM THE C-SUITE 9
CURRENT USAGE OF
TELEMEDICINE Time to have telemedicine solutions for potential types and
Telemedicine adoption today is great- locations of patients
est in the hospital setting, followed by
remote patient monitoring: (Fig. 11)
FIGURE 11 n E
 mergency
cases in the
• 49% of respondents currently 30%
hospital
28.6%
use telemedicine in the
hospital (29% for emergency 25% n N
 on-emergency
21.4% inpatient cases
20.4%
cases and 20% 20% in the hospital
for non-emergency cases) 14.3%
15%
• 21% currently use telemedicine 12.2%
n E
 mergency
for patient home monitoring 10% 8.2% cases in the
• 14% use it for outpatient clinics ambulance
5% 4.1% 4.1%
during transport
and 12% use it for specialty
0%
or primary care on a patient’s I already do this today n P
 ost-acute
mobile device care located
• Only 4% use it for post-acute at nursing or
long-term
care in a facility facilities
FIGURE 12
FUTURE AREAS OF INTEREST n O
 utpatient
FOR TELEMEDICINE 75%
74.5% clinic cases
In the future, executives are highly 68.4% 67.3%
66.3%
interested in expanding the use of 65% 61.2% 60.2% n Apps for virtual
patient-initiated
telemedicine beyond the walls of 55%
54.1% 52.0%
primary care
their facility. (Fig. 12) on patient’s
45% mobile device
• 75% want to provide virtual
35% n Apps for virtual
post-acute specialty care on
post-acute
a patient’s mobile device 25% specialty care on
• 67% want patient-initiated patient’s mobile
15% device
primary care on patients’
mobile devices 5%
n Remote patient
• 68% want to use telemedicine 0% monitoring
in outpatient clinics I want to, but it can wait (based at home
or on mobile
device)
AREAS OF LEAST INTEREST
Respondents view the least urgent
locations for using telemedicine
FIGURE 13
solutions as follows:
(Fig. 13): 40%
35.7
34.7%
35%
• 36% of respondents say
they do not want or need 30%
telemedicine for emergency 25% 24.5%
ambulance transport 21.4%
20% 18.4% 17.4% 17.4%
• 35% do not want or need
it for post-acute care in 15% 13.3%
a facility 10%
5%

0%
I do not want or need it

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KEY FACTORS IN SELECTING TELEMEDICINE SOLUTIONS
Executives Prefer to Buy, Not Build,
Devices and Software
THE CURRENT TELEMEDICINE market is When asked if they prefer to build or
comprised of do-it-yourself solutions as buy various components of telemedi-
well as modular commercial solutions. cine, the vast majority of respondents
Some components of telemedicine prefer to buy the software platform and
are seen as easier to buy than to build. video-equipped devices (86% and 88%
FIGURE 14:
Preference to self-develop (build) or to use vendors (buy) for various telemedicine components.
Video-Equipped Devices
12%
(BUILD using existing hardware or consumer devices or BUILD
BUY using telemedicine-specific equipment)
14%
Software Platform BUILD
Network Monitoring 47%
(to ensure reliable connectivity) BUILD
Workflows (clinical documentation 59%
BUILD
and billing integration)
Physician Capacity 58%
(BUILD to virtualize the capacity of own physicians or BUILD
BUY capacity from physicians outside own organizations)
EMR WORKFLOW INTEGRATION: vendors are seeking to address the lack
Critical to a Successful of interoperability of healthcare data,
Telemedicine Program most executives are grappling with data
Healthcare organizations have invested systems that weren’t designed to talk
heavily in electronic medical record to each other, both within and outside
systems in the past decade, only to face their enterprise.
continued challenges when they try Physicians now spend more than
to integrate patient and financial data half of their time looking at a computer
from disparate sources without bur- screen rather than making eye contact
dening their doctors. While numerous with a patient. They’re struggling to
A SAGE GROWTH PARTNERS STUDY: DEFINING TELEMEDICINE’S ROLE—THE VIEW FROM THE C-SUITE
respectively), while they were more
evenly split on build vs. buy for network
monitoring, physician capacity and
workflow components. (Fig. 14)
88%
BUY
86%
BUY
53%
BUY
41%
BUY
42%
BUY
make sense of multiple ways that ven-
dors define seemingly straightforward
patient data, such as an HbA1c lab value
for evaluating diabetes. They view the
integration of a telemedicine consult/
visit into their workflow as yet one more
barrier to efficient care delivery. Health-
care executives also want telemedicine
solutions that are easy to use, easy to nav-
igate, and compatible with their EMRs.
11
Most Executives Prefer Single Vendor,
Enterprise-wide Solutions
DUE TO IMPLEMENTATION SPEED and
ease, predictable costs, and physician FIGURE 15:
satisfaction, many organizations that If you use telemedicine solutions in all five categories on the continuum of care,
started with an in-house solution have how many different telemedicine solutions would you be willing to use?
found it more challenging than expected
to build and maintain it over time.
SGP’s quantitative survey found that
60%
most health executives prefer to work
with a single telemedicine vendor that 53.9%

can provide a comprehensive approach

50%
to managing products and services
across the spectrum of care rather than
take a piecemeal approach.
40%
As shown in Figure 15:
30.8%
• 54% prefer a single telemedicine
30%
solution across the continuum
of care
• 31% believe two solutions
20%
are acceptable
• Only 15% believe three or more
solutions are acceptable 10%
8.8%

4.4%
Implementing an effective telemedi- 2.2%

cine program is not as simple as setting 0

up a video monitor and a satellite con- 1 2 3 4 5
nection. To create effective, comprehen-
sive solutions, healthcare providers need # of Solutions
software, network monitoring, devices
and equipment, easy interfaces with their
EMR and billing systems, program imple-
mentation and maintenance capabilities,
and, in many cases, physician capacity
management (to address either under- The managed service, single vendor ap- more predictable, and as a way to keep
utilization or shortages of specialists). proach is preferred because it is viewed physicians satisfied.
A managed services approach , where a as making life easier for the CIO, CNO
single vendor provides all aspects of the and CMO. It is also seen as the best way
solution, can solve this problem. to speed implementation and make costs

“We would love to have a super vendor or a soup to nuts solution.

For the most part, our experience in the last three or four years is that
we are forced by the absence of really comprehensive vendors to
select more narrowly focused ones.”
—CMIO of multi-state IDN

A SAGE GROWTH PARTNERS STUDY: DEFINING TELEMEDICINE’S ROLE—THE VIEW FROM THE C-SUITE 12
Must-have Capabilities Include Security, Quality,
and Reliable Connectivity
SECURITY OF DATA and devices consis- ity to easily integrate with the existing •7
 4% – high-quality image
tently top the list of the most important EMR system. As shown in Figure 16, and audio resolution
factors in vendor or platform selection. the top ‘must haves’ are as follows: •7
 0% – near-perfect
The other most important factors are • 92% – security of data and connectivity rates
high quality image and audio, connec- devices (HIPAA compliant and •7
 0% – 24/7 tech support
tion success, tech support, and the abil- hacker-proof) •6
 7% – easy EMR integration

FIGURE 16: How important are these factors for your organization when selecting a telemedicine platform, partner, or vendor?
n Must have (need it) n Nice to have (want it) n Overkill (don’t want it, don’t need it)

2.0% 2.0% 6.1% 1.0% 4.1% 6.1% 8.2% 5.1% 16.3% 19.4%
100%
6.1% 24.5% 28.6%
26.5% 52.0%
90% 91.8%
23.5% 26.5%
38.8%
80% 50.0%
52.0%
70% 73.5%
70.4%
70.4% 69.4%
67.4%
60%
50% 53.1%

40% 42.9%

30% 33.7%
28.6%
20%
10%
0%
Security of High-quality 24/7 live Over 99.9% Easy to use EMR Clinical and Business Assistance Consumer
data and image technical connection interface integration operational intelligence with smartphone
devices resolution support for success and single and interop- workflow so- and analytics provider app for pa-
(HIPAA com- and devices and sign-on for erability lutions (docu- (track usage, shortages tient-initiated
pliant; Hack- audio network physicians mentation satisfactions, consults and
er-proof) and billing) outcomes) scheduling

CONNECTIVITY RATES
Although 70% of executives consider
connectivity success as a “must have”
factor, nearly half (46%) of executives
with existing telemedicine solutions
estimate that their connectivity rates are
lower than 85%. (Fig. 17)
FIGURE 17: What is your estimated connectivity success rate?
(Percent of attempted calls that result in a complete and uninterrupted physician
to patient encounter or physician to physician consult on the first call attempt.)
Less than 85%
85-95%

46% 95-99.99%

of executives estimate 99-99.99%

that their current

>99.99%
telemedicine solution
fails at least 5% 10% 15% 20% 25% 30% 35% 40% 45%

15% of the time.

A SAGE GROWTH PARTNERS STUDY: DEFINING TELEMEDICINE’S ROLE—THE VIEW FROM THE C-SUITE 13
EMR Integration is Critical
WHILE MOST MATURE use cases for
telemedicine are in the hospital setting,
there is a strong and growing demand
for consumer-based telemedicine that
allows patients at home or on the go to
reach a physician for a non-emergency
consult. In these direct-to-consumer
(DTC) telemedicine applications,
executives perceive the ability to
make it easy for providers to use by
integrating with their EMR to be the
most important factor. This makes
sense in light of the many challenges
that clinicians have faced due to the
limited interoperability of various
data sources.
Other important factors are giving
patients the ability to schedule an
appointment and offering a store-and-
forward communication capability.
As shown in Figure 17, when selecting
a DTC telehealth solution:
• 69% consider EMR integration
as a “must have”
•6  5% demand patient-initiated
scheduling
•6  3% demand a store-and-forward
communication capability

“The part that’s important is to have a solution that works for your providers.
If it doesn’t, then the program’s worthless.”
—Manny Berman, President & CEO, Tuality Healthcare

FIGURE 18: How important are these factors for your organization when selecting a DTC telemedicine platform, partner, or vendor?
n Must have (need it) n Nice to have (want it) n Overkill (don’t want it, don’t need it)

Integration to EMR 69.4% 25.5% 5.1%

Patient can schedule

65.3% 31.6% 3.1%
an appointment
Patient can store and forward
63.3% 33.7% 3.1%
a message to a provider

E-prescribing 59.2% 37.8% 3.1%

Insurance verification 54.1% 42.9% 3.1%

Patient can initiate virtual

52.0% 42.9% 5.1%
visit with primary care provider
Patient can
48.9% 42.9% 8.2%
download an app
Patient can store and
47.9% 46.9% 5.1%
forward a photo to a provider

Vitals capture 45.9% 48.9% 5.1%

Patient can submit copay for

43.9% 51.0% 5.1%
virtual visit on app

Referrals management 38.8% 59.2% 2.0%

Patient can initiate virtual

30.6% 60.2% 9.2%
visit with specialist

Integration to smart TV 12.2% 56.1% 31.6%

0% 20% 40% 60% 80% 100%

A SAGE GROWTH PARTNERS STUDY: DEFINING TELEMEDICINE’S ROLE—THE VIEW FROM THE C-SUITE 14
Evaluating DTC Capabilities in the Acute Setting
Hundreds of vendors are competing for
buyers’ attention. The market appears to
have developed two adoption curves –
one focused on the acute-care landscape,
and one focused on the ambulatory
ecosystem. Increasingly, vendors seek
to position themselves as an enterprise-
wide offering, with acute-care vendors
attempting to move downstream to less
acute settings, while ambulatory and
DTC providers are moving upstream to
post-acute or acute care environments.
With the growth of DTC solutions,
and seemingly simple deployment of
common consumer applications like
Zoom, Facetime, and Skype, SGP asked
respondents to comment on the chal-
lenges of using DTC solutions in acute
care situations. The data suggest that
a one-size-fits-all technology approach
may present some challenges — espe-
cially when trying to translate DTC
offerings to emergency acute-care
use cases.
In the smaller 50-respondent study,
the majority of respondents believe
there is a risk in using consumer-based
technology for high-acuity telemedicine
(64%). (Fig. 19)
In the larger 98-respondent study, ex-
ecutives are most concerned about priva-
cy and security (HIPAA compliance) and
the ability to integrate with the EMR
when using consumer-based technology
in high acuity situations. (Fig. 20)

FIGURE 19: Do you feel that existing consumer technologies (e.g., Skype/Vidyo/iPhone/iPad) alone are suitable for acute care tele-
medicine applications on inpatient cases involving telestroke, tele-ICU, teleneonatology?

2%
6%

n V ery suitable
n Good enough
n Not very suitable
30% (could be a risk)
62% n Dangerous
(should never be used)

FIGURE 20: What are the possible challenges that consumer-based technologies face when used for telemedicine in acute-care
settings?

HIPAA compliance 21.2%

Integration to EMR 21.2%

Lack of workflows (clinical 16.5%

documentation, billing integration)

Reliability 15.5%

Integration to medical imaging 14.7%

Physician resistance 10.9%

0% 5% 10% 15% 20% 25%

A SAGE GROWTH PARTNERS STUDY: DEFINING TELEMEDICINE’S ROLE—THE VIEW FROM THE C-SUITE 15
CONCLUSIONS
THE QUALITATIVE AND quantitative
research undertaken by SGP reveals that
telemedicine is growing in importance
and in investment, but despite the hype,
hospitals and health systems’ budgets
are still modest. Reimbursement and
regulatory issues have slowed the adop-
tion of telemedicine and prevented
systems from investing more in this
potentially transformational way of
delivering care.
Nonetheless, healthcare executives
today are convinced of the clinical value
of telemedicine in numerous specialties
and use cases. Most have already seen
the value of telemedicine in treating
strokes, while other specialties are play-
ing catch-up along the maturity curve.
The areas most ripe for transforma-
tion and growth are seen as behavioral
health, neurology, cardiology, and
primary care/pediatrics. Telemedicine
applications for oncology, infectious
disease, dermatology, orthopedics,
radiology, and neonatology are in
their infancy but also moving up the
maturity curve.
Across all care settings, our respon-
dents perceive telemedicine as impor-
tant for improving access to care and
meeting patient demands. While they
are currently using the technology
chiefly in hospitals and in patient home
monitoring, outpatient and DTC uses
are poised for significant growth.
The ROI for telemedicine under fee-
for-service healthcare reimbursement
has been challenging. However, given
its potential to improve outcomes and
REFERENCES
1
http://www.healthcareitnews.com/news/
mayo-clinic-says-neonatology-telehealth-saves-
infants-lives-avoids-transfers
2
http://www.modernhealthcare.com/
article/20170606/NEWS/170609935
3
https://www.rand.org/news/press/2017/03/06.html
A SAGE GROWTH PARTNERS STUDY: DEFINING TELEMEDICINE’S ROLE—THE VIEW FROM THE C-SUITE
reduce utilization and costs, telemedi-
cine will become increasingly impor-
tant under value-based reimbursement,
by monitoring health, preventing
disease exacerbation, and improving
access. Telemedicine is also seen as
an opportunity for organizations to
position themselves as the provider
of choice and build their brand.
Fewer executives are convinced of
telemedicine’s utility in emergency
ambulance transport and in post-acute
care facilities, although some respon-
dents recognize its potential to address
physician shortages in the latter. Given
that post-acute care still represents a
‘black hole’ in the healthcare spend, and
that many facilities are still being penal-
ized by CMS for avoidable readmissions,
telemedicine may have greater utility in
this setting than some realize.
The executives responding to SGP’s
research largely want single-vendor solu-
tions that can deliver comprehensive
‘managed services’ telemedicine across
the care spectrum, with proven ability to
deliver data security, reliable connection
rates, 24/7 technical support, high-qual-
ity images and audio, and easy integra-
tion with their EMRs – at a reasonable
cost. This may be a backlash to the high
cost of EMRs and their cumbersome
implementation and usage, and telemed-
icine vendors should heed this issue.
Most survey respondents prefer a sin-
gle vendor to offer care across various
specialties and care settings. They view
this as offering greater convenience,
more predictable costs and potentially
higher physician satisfaction. However,
healthcare executives selecting a single
solution should ensure that the vendor
can truly meet their needs across the
care spectrum. In high acuity situations
such as telestroke or teleneonatology,
executives strongly prefer using secure
and reliable telemedicine-specific equip-
ment and networks; relying on consum-
er-based devices like iPhones in life-
threatening situations is seen as risky.
Conversely, in low-acuity telemedicine
applications such as primary care, pur-
chasers are demanding the convenience
of using these consumer-based devices.
Given the growing consumer demand
for telemedicine, coupled with greater
physician shortages in some specialties
and the growth of value-based care, the
rate of telemedicine adoption should
accelerate in the next few years, despite
regulatory and reimbursement barriers.
While the ROI of telemedicine cannot
readily be measured with traditional
metrics, it has tremendous potential to
improve care access and delivery – criti-
cal factors in the long-term success of
health systems attempting to address
population health.
Foresighted insurers will seek ways to
provide a better financial ROI for provid-
ers, and government agencies should
find ways to continue reducing regula-
tory barriers. In the meantime, progres-
sive providers should continue to look
beyond immediate financial returns
to telemedicine’s potential to position
them as a provider of choice and prevent
the loss of their patients to competitors.
16
ABOUT SAGE GROWTH PARTNERS
BASED IN BALTIMORE, MD, Sage Growth
Partners is a research, strategy, and
marketing firm dedicated solely to the
business of healthcare – accelerating
commercial success for healthcare
organizations through a singular focus
on growth.
We help our clients thrive amid the
complexities of a rapidly changing mar-
ketplace with deep domain expertise
and an integrated application of strat-
egy, marketing, and research.
A SAGE GROWTH PARTNERS STUDY: DEFINING TELEMEDICINE’S ROLE—THE VIEW FROM THE C-SUITE
Founded in 2005, SGP transcends the
traditional definition of a consulting
firm. We understand the complexi-
ties, the nuances, the players, and the
interdependencies of healthcare in a
way that allows us to create potent
strategies, form mutually beneficial
coalitions, build tools, and execute our
pragmatic thinking in remarkable ways.
We solve complex problems. We opti-
mize operations to achieve new levels
of efficiency. We help clients see and
actualize growth opportunities.
SGP’s current and past clients include
GE Healthcare, Philips Healthcare,
The Healthcare Association of New
York State (HANYS), Healogics,
Quest Diagnostics, Qlik, and Legacy
Community Health.
For more information, visit
sage-growth.com
17