American Well CEO Shares Vision on Future of Virtual Doctor Visits and How Healthcare Reform Will Boost His Company

1/22/10

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use their time while they are at their homes from 7 o’clock to 9 o’clock in the evening, those types of interventions are going to become a requirement. This is something that we see happening in 2010. So in a nutshell, we see healthcare reform providing a huge boost to the use of our technology.

X: Has reimbursement been an issue for the company? I recall that the reimbursement rates that are applied to online visits aren’t as high as physical office visits.

RS: We thought the fact that the system allows physicians to operate without overhead was going to be a very important factor in their decision to do this or not to do this. The reality is that we don’t have a shortage of physicians. Physicians are on the system, they are happy to do this, and they are delivering services 24 hours a day. The reimbursement rates differ from market to market. The reimbursement rates in Minnesota are different than they are in Texas, and the rates in Texas are different than the rates in Hawaii. But the rates are adjusted to the point that it’s attractive to the physician. Health plans determine reimbursement rates. The system not only allows health plans to play around with reimbursement rates until they find a sweet spot [where doctors are willing to provide virtual consultations], it has the capabilities also to provide great sophistication in what the rates would be depending on who the patient is, who the provider is, and under which circumstances they come together.

So the payment rate may be different for an HMO product versus a PPO product. It may be different by time of day. And some plans are actually thinking about an advanced perspective, where they are saying that there are certain patients that are extremely expensive to cover because their care is poorly coordinated. The diabetic patients that do not go to their follow-up appointments, for example, tend to show up in the emergency room with different kinds of extreme complications of their disease. With our system, health plans have the capability of saying that for those patients, where we could really benefit from advanced coordination, the payments for those patients are going to be lower than for patients who are perfectly fine. In a way, it’s a really good thing because those patients who are badly cared for are given positive incentives to get treated [in a virtual visit], and that in turn has a tremendous effect on the medical costs of managing those patients.

X: How do you envision American Well being used outside the U.S.?

RS: Here’s something to consider, which I think is very contemporary. Just imagine that we could open online care in Haiti. Just imagine that the service would be available in those very large places where wounded people are concentrated, and we could make U.S. doctors available from their desktops in their office. And all these physicians would be available to patients in Haiti.

X: It sounds like you’ve thought about this scenario quite a bit. Do you want to make an announcement?

RS: I don’t want to make an announcement because I don’t know who’s going to pick this up. I can definitely say that if someone had picked this up, we would have made the system available, we would have contributed the system for that. But I think these things would be a reality. Online care is all about projecting care from one place where it is available to another place where it is needed. Here’s another example that no one ever thinks about, of how dramatic that effect could be. It’s too early in the game of online care for people to translate what it offers into these kinds of applications, but the world of online care is literally opening up in front of our eyes right now.

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