5 Reasons Teledermatology Will Continue to Grow in 2015

This post originally appeared in The Dermatologist online magazine.

Teledermatology has long been limited to the dermatology departments of large academic centers interested in researching innovative care delivery models. The safety and effectiveness of teledermatology has been established by these centers and has slowly been entering the offices of private practice dermatology in recent years. This past year showed a steep increase in the use of teledermatology, and I believe the momentum will carry throughout 2015 for the following 5 reasons.

1. Smarter Consumers & Mobile Devices

Consumer technology has long been a barrier for the adoption of telemedicine. This is definitely no longer the case. Mobile phones can be used to take pictures with the same quality and resolution as the high-end point-and-shoot cameras from only a couple of years ago. With the expansion of 4g networks, it now takes most consumers only seconds to upload these photos, too. In addition, patients have access to a plethora of reputable medical information resources — just look at the Mayo Clinic’s repository for example. As a result, patients are looking for a higher level of care and seeking more treatment from medical specialists like dermatology. A more knowledgeable consumer equipped with connected smart-devices means patients will begin to choose specialist care that offers more convenient channels of access to care like telemedicine.

2. Direct-to-Consumer Growth is Evidence of Growing Telemedicine Demand

Direct-to-Consumer teledermatology is the initial diagnosis and treatment over the Internet of a patient that does not have an established patient-physician relationship. 2014 was a big year in the dermatology direct-to-consumer market with the launch and expansion of several companies, such as sprucehealth.com and pocketderm.com. Patients want a more convenient way to treat and manage their skin conditions and the direct-to-consumer market responded. While I do not support this model of care and it is not legal in all states, it is evidence that patients are demanding telemedicine in the dermatology space.

3. Insurance Networks Continue to Reduce Costs

With the introduction of new, more expensive therapies, insurance carriers will continue, more than ever, to seek out ways to reduce costs. The Affordable Care Act, which sets caps on out of pocket maximums, is driving this action. In addition, insurers have an incredible amount of bargaining power. In Alabama, Blue Cross and Blue Shield (BCBS) covers almost 84% of the population and this is not uncommon. In 17 states, a single insurance company dominates with at least 50% market share.1

So how does this affect dermatology practices? To reduce costs, insurers are creating narrow networks and contracting with practices that provide the lowest cost of care.2 Faced with a large patient population to care for and lowered reimbursements, teledermatology is a way to counter and cost-effectively provide quality care.

4. ACO Models Will Continue to Grow

Accountable Care Organizations (ACO) are far from proving to be a cost-effective means for providing healthcare. The Pioneer ACO program is down to only 19 of the original 32 organizations that initially signed up.3 This doesn’t mean that organizations are not positioning themselves to deliver healthcare in a population management type of model. In fact, many of the healthcare organizations dropping out of the Pioneer ACO program are moving to Shared Savings Plans. These types of care models depend on providing a full suite of services to an entire population in a cost-effective way. One major component of this strategy is the implementation of telemedicine.

A November survey of healthcare executives found over half of their organizations are using some type of telemedicine and 84% felt the development of telemedicine programs were either very important or important.4 Most hospitals don’t have dermatology services. In order to provide a full Suite of specialists, I believe that hospitals will implement store-and-forward teledermatology programs to effectively engage dermatology specialists for consults.

5. Retail Clinics

In 2014, a significant amount of growth occurred in the retail clinic space with 2 recent major announcements. Target stores began piloting telemedicine with patients in the Kaiser Permanent network and Walgreens announced a partnership with MDLive, a telemedicine service providing primary care. With growing competition in this space, these organizations will have to expand their offerings to other medical specialties. Dermatology will most likely be the first due to the visual nature of skin diseases.

An opportunity exists for the development of telemedicine in the future and dermatologists are sure to be at the forefront.

References

1. AMA: 10 states with the strongest insurance monopolies. October 14, 2014.http://www.advisory.com/daily-briefing/2014/10/14/10-states-with-the-strongest-insurance-monopolies Accessed January 28, 2015.
2. Sanger-Katz M. Narrow Health Networks: Maybe They’re Not So Bad. September 9, 2014.http://www.nytimes.com/2014/09/10/upshot/narrow-health-networks-maybe-theyre-not-so-bad.html?abt=0002&abg=1&_r=2 Accessed January 28, 2015.
3. Evans M. Medicare’s Pioneer program down to 19 ACOs after three more exit. September 25, 2014. http://www.modernhealthcare.com/article/20140925/NEWS/309259938
4. Dvorak K. Survey indicates telemedicine adoption growth among healthcare execs. November 11, 2014. http://www.fiercehealthit.com/story/survey-indicates-telemedicine-adoption-growth-among-healthcare-execs/2014-11-11 Accessed January 28, 2015.