The rise of virtual care and how it is shaping the new healthcare story: An interview with Dr. Kurt Herzer
By Francesca Pinelli, Kellogg School of Management ‘22
It is undeniable that 2020 transformed the face of healthcare as we knew it. With so much change this year many of us are wondering what healthcare will look like going into 2021 and beyond. To quote this year’s conference theme: “What now? What is the next normal?” Prior to Kellogg, I worked at a health technology start up and growing national health plan in New York City called Oscar Health. As a Product Marketer on our Member Engagement Team focusing on Oscar’s virtual care offering, I often partnered with our Product and Population Health teams to tackle this question and think through how to better engage our members with their health. I decided to (virtually) sit down with a former colleague, Kurt Herzer, who ran Oscar’s Population Health team, to get his latest thoughts as we head into the new year.
Francesca Pinelli: Healthcare has historically been reluctant to change. The COVID-19 pandemic has drastically upended that story -- especially as it relates to the rise of telemedicine. Do you think it’s definitely here to stay?
Kurt Herzer: I do think telemedicine is here to stay, owing to several factors, which I’ll describe. But it’s important to remember that telemedicine has in fact been around for a long time. The earliest instances of telemedicine development in the United States date back to the 1960s and 1970s with pioneering work by NASA and Kaiser Permanente (NASA was interested in remotely managing the health of astronauts). In the decades since, major pieces of federal legislation have continued to drive the evolution of telemedicine technology. The American Recovery and Reinvestment Act of 2009, the HITECH Act, and the Patient Protection and Affordable Care Act helped establish the regulatory environment within which telemedicine currently operates. The COVID-19 pandemic led to a sudden relaxation in certain federal telemedicine regulations and a dramatic increase in Americans’ use of telemedicine. As lockdowns eased, office-based care picked back up, but virtual care remained prevalent. Some estimates suggest that $250 billion of healthcare spending could be “virtualized,” and theoretically at a lower cost to deliver than the equivalent office-based care. Venture capital has flowed to a myriad of health tech startups interested in capitalizing on this opportunity. When viewed collectively, all these forces conspire to suggest that virtual care will likely play a persistent role in the US healthcare system.
FP: What are your biggest concerns with the rise of virtual care?
KH: Unlike other contemporary virtual transformations affecting shopping (Amazon), video rentals (Netflix), and workplace meetings (Zoom), the delivery of clinical care virtually is imbued with more uncertainty, greater complexity, and higher stakes. My biggest concern is that in the short run virtual care, as a care delivery modality, undermines the quality of care that patients receive. High quality healthcare should be safe, effective, efficient, timely, patient-centered, and equitable. We know relatively little about how virtual care performs in these areas. Still, the fundamental duty of physicians to provide high quality care to their patients remains unchanged. In the long run, it will be essential that virtual care, as a new care modality, is thoughtfully integrated within the existing healthcare delivery system. Ultimately, virtual care must improve value—the quality or health outcomes achieved for the costs incurred. Too often health care has innovation theatrics in which shiny new technology does not improve value. We must ensure that it does.
FP: Along those lines, what would success look like for virtual care?
KH: In general, despite the excitement surrounding virtual care, there has been very little discussion about what principles are motivating its development. For example, imagine that a health tech startup were to race a minimum viable virtual care product to market that delivered substandard clinical care, and potentially harmed patients. Do we simply view this as the cost of creating a new healthcare technology? Is it ethically acceptable for the concept of a minimum viable product to exist in the context of patient care? Data from early in the COVID-19 pandemic when virtual care was at a peak suggest that primary care assessment of blood pressure and cholesterol declined significantly, in large part because assessment of these basic and important clinical indicators is harder and much less likely in the virtual setting.
So what does success look like for virtual care? I’d assert that 3 principles should motivate how virtual care is developed. First, virtual care must be as safe and effective as traditional care. Traditional care has a way to go too, but a new technology should not send us backward on the path to quality. Second, virtual care must not add to the total cost of care within a population. If poorly applied, there are multiple ways that virtual care could add to the US healthcare cost problem with no discernible benefit to patients. US healthcare costs are already far higher than those in other developed economies and some estimates suggest that 30% of healthcare spending is waste. Third, virtual care should not exacerbate healthcare disparities. Compelling and persistent data indicate that minority and low-income populations receive worse quality care. If virtual care proves effective, it could disproportionately cater to the young at the expense of older, less educated, and minority populations that are less likely to have the necessary digital literacy and technology needed.
FP: What excites you most about how healthcare has changed in 2020? Where do you think the greatest areas of opportunity lie?
KH: 2020 has been an incredibly hard year for everyone, and particularly for healthcare workers fighting the COVID-19 pandemic. But 2020 also demonstrated the scientific and medical communities working together cooperatively around the world to deliver novel vaccines in record time. To me, this shows the incredible promise of humanity and science to solve seemingly intractable problems. If we could achieve a similar sense of cooperation and urgency in many other areas of medicine and healthcare, one can only imagine the advances possible.
As we’ve discussed here, one area of opportunity is how virtual care unfolds. A second area that I see a big opportunity is in home-based care, where practitioners see patients in their homes. Health systems and companies are starting to enter this space. The cost of drugs continues to be a challenge, and between Amazon’s entry into the pharmacy space and some activity in federal policy, I think this is a space to watch. Lastly, I think there is a large untapped potential in the copious amounts of clinical data that have been collected in electronic health records (EHRs) over the last several years. Despite the massive data collection effort, there have been relatively few examples of using these data in scalable ways to actually improve patient care. One way could be through “precision health” applications, where we start to develop a much more granular understanding of patient variation and subpopulations that are most likely to benefit from certain interventions.
FP: Telemedicine can be a key piece of a population health model to deliver value-based care and provide high-quality, low-cost care to patients. Agree or disagree with this statement?
KH: I agree with this aspiration imbued in this statement. But we have a long way to go before this is true.
About the Author
Francesca Pinelli: Francesca is a first year 2Y MBA. Prior to Kellogg she worked in Product Marketing at Oscar Health. While at Oscar she focused primarily on driving engagement with the company’s telemedicine and prescription offerings in order to help improve health outcomes for members. While in this role she partnered closely with Oscar’s Product, Population Health, Clinical, and Go-to-Market teams regularly to help design an improved member experience. She is a marketing director for 2021 KBHC.
Kurt Herzer: Kurt Herzer, MD, PhD, is currently a Senior Advisor at the Centers for Medicare and Medicaid Services in Washington DC, leading efforts related to quality of care and data science. From 2017-2020, he served in leadership roles at Oscar Health, a health technology company and national health plan, including as its head of Population Health. Disclosures: Kurt is a strategic advisor for Here Health, a virtual care company, and has received personal fees from ASAPP, Inc. He also has equity in Oscar Health.