Telehealth revenue cycle

How Telehealth Impacts the Revenue Cycle

When hospital executives sing the praises of telehealth, they usually talk about how it improves patient access, not its positive impact on their facilities’ revenue cycle. But since telehealth has grown with e-commerce, it offers many opportunities to improve hospital revenue and profitability.

Twenty years ago, the patient’s portion of a hospital bill was often in the 5% range. Now it’s closer to 20%, and some experts predict it won’t be long until it reaches 30% or more. That’s a big chunk of income that hospitals can’t afford to write off.

As telehealth consultations and retail clinic visits continue to skyrocket, many hospitals are taking note of the payment models they’ve introduced. Most patients don’t blink an eye at paying a portion of the bill upfront for either a retail clinic visit or telehealth consult with a primary care physician. In fact, many people are willing to pay a bit more for a telehealth consultation simply because they don’t lose $50 or more by missing work.

A lot of hospital billing takes place after the service has been rendered. That would be laughable In e-commerce and retail, where upfront payment is the norm. A small-but-growing percentage of healthcare consumers are even willing to pay a monthly fee on their credit cards in order to receive premium services. It’s an arrangement inspired by the “concierge medicine” phenomenon, where celebrities pay a much higher fee for personalized pampering.

Competing With Retail Giants

Large retailers like Walmart are now aggressively adding primary care services at their stores – a trend that could significantly alter the hospital referral patterns in a community.

A recent study by Blue Cross concludes that nearly 30% of ED visits could potentially be treated in retail clinics. That’s a statistic that’s not lost on Walgreens, Walmart and other retail innovators.

At the recent Health:Further conference, Marcus Osborne, Walmart’s vice president of healthcare and wellness transformation, told attendees “about half the population of the U.S. physically walks into a Walmart store every week. One-fifth of all the food sold in America is purchased at Walmart, so we have tremendous insights into what foods people are eating and how we can improve their eating habits. And on the wellness front, half of the bikes sold in the U.S. each year are bought at Walmart.”

Other Bottom-Line Benefits

Here are some other financial benefits that have accompanied the rapid rise in telehealth and retail healthcare visits:

    • Reduce no-shows: The Medical Group Management Association has documented that some hospital-affiliated practices have no-show rates as high as 50%. According to the organization, even the best-run physician practices experience at least a 12% daily no-show rate. In industries that are e-driven, this is seldom a problem. For example, if you buy a movie ticket from Fandango, you pay upfront…and if you miss the show, tough luck. Statistics show that telehealth and retail visits have exceptionally low no-show rates.


  • Faster scheduling increases revenue: A recent study from MD Live found that 82% of adults age 18 to 34 prefer a same-day telehealth consultation versus having to wait a week or more for an in-person visit. And a recent Intel study found that 72% of all people – regardless of age – are enthusiastic about seeing a doctor virtually for non-urgent cases.

Walmart’s Osborne feels that hospital billing is complicated and slow because we have a “balanced interest” healthcare system, where providers, payers, patients and pharma all try to carefully balance their interests.

“We at Walmart feel that it would be better to go to a purely consumer-centered system where the only people who matter are the consumers of healthcare products and services,” Osborne noted.

Hospital leaders are finally getting on the same page with healthcare consumers who are happy to pay in advance for the convenience of a telehealth visit. And in their world, convenience is king.