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Online Healthcare Hits the Heartland

Posted by: Jessie Scanlon on April 13, 2009

Tomorrow at the World Health Congress in Washington, D.C., Blue Cross and Blue Shield Minnesota will officially announce its partnership with American Well. The Boston-based start-up is the developer of Online Care, an innovative Web-based platform that gives patients real-time access to physicians, 24/7. That makes the Eagan, Minnesota-based insurance company the second American Well customer after Hawaii Medical Services Association (also know as BCBS of Hawaii), which launched its online care service in January.“We have an office of innovation that tracks developments across the healthcare marketplace, and we’ve had our eye on American Well for a while,” Pat Geraghty, the CEO of BCBS Minnesota, told me about the insurance company’s breaking news.

Even before President Barack Obama signed his stimulus bill on February 17, with its $19 billion set aside for health information technologies, digital healthcare was a growing industry. There are hundreds of health information Web sites and some 200 companies building businesses around digital health records, according to the American Health Information Management Association, a trade group. There are so-called “e-visit” systems that allow patients to schedule appointments and communicate with their physicians vie email.

American Well’s system does all of these things, sometimes in partnership with industry players such as Microsoft, whose secure HealthVault platform helps people collect and store personal health information. But the start-up goes beyond information; it enables physicians to offer secure, real-time consultations to patients on demand, via phone, secure Web-chat, or encrypted Web-based videoconferencing.

The American Well system acts as a broker, matching up patients who call or log in with an available primary care physician or relevant specialist within a couple of minutes at most. A patient could request, say, a Spanish-speaking pediatrician or a female obstetrician, or could simply view all of the currently available physicians, read their bios, see their consumer satisfaction ratings, and then make their choice.

Roy Schoenberg, who founded American Well with his brother Ido (both are doctors), stresses that the system matches patients only with licensed physicians in their provider network. So if you log or call in at 11 pm because your baby is running a fever, you might not be able to connect with your regular pediatrician, but you would be connected with one of his or her colleagues. Continuing that example, if you were using a Webcam and could hold the baby up to the camera, the doctor could see the general state of the child and look for any telltale rashes.

The system allows a patient to show the physician his or her whole medical record or just relevant lab results, and allows the physician to prescribe most drugs. At the end of the session, a summary is automatically sent to the patient’s primary care physician.

To be clear, no one – including American Well and its existing Blue Cross customers in Hawaii and Minnesota -- sees online care as a replacement for in-office visits. Some health situations require a visit to the doctor’s office. But as BCBS Minnesota’s Geraghty says, “many visits happen because that’s the way that the provider is paid, but it often isn’t needed.”

So while some health care needs still require a visit to the doctor’s office, many issues can be addressed through a virtual meeting. And that can be a win for everyone. Physicians benefit because they’re able to work more hours by making themselves available during a cancelled appointment, say, or at home after dinner. Insurance companies gain because it shifts care away from more expensive sites such as the hospital emergency room and the doctors’ office. And patients benefit from being able to talk to a physician almost immediately without leaving home or the office.

“Hawaii is essentially a rural state, and it is difficult for patients to access physicians, particularly specialists, who might be located on a different island,” says Joanne Galimi, a medical and insurance analyst and vice president at Gartner, the Boston-based research firm. “In that environment, online care makes a lot of sense.”

According to a report by Galimi, the American Well system went live in Hawaii “on time and within budget” on January 15. Michael Stollar, vice president of marketing and communications for Hawaii Medical Service Administration, says that, three months in, it’s too early to know the impact of the online care option. “What we can say is that we have had thousands of enrollees and hundreds of consultations,” he says. That suggests a rather slow start, given that HMSA has opened the program to all Hawaii residents, not just its 700,000 members. “We knew that the introduction of such significant change would be a marathon effort, not a sprint,” says Stollar.

For its part, Blue Cross Minnesota will first run a pilot of the service with its 10,000 employees and family members, rolling it out across its network of 2.8 million members as soon as 2010. CEO Geraghty says that during the test phase, his team will be evaluating customer and provider satisfaction, as well as impact on cost, quality of care, and worker productivity. “Our HR folks are very interested in this, because when an employee has to go to the doctor’s office it could take half the day.” Geraghty has also gotten a positive response from a number of large Minnesota employers. “They have been eagerly saying ‘we’d like to be your first client,’” he adds.

Meanwhile, American Well is continuing to sign on clients of its own. Schoenberg won’t name names, but he tells me, “You’re going to see a tidal wave of adoption by other health plans around the country.”



What comes next? The Bloomberg Businessweek Innovation and Design blog chronicles new tools for creativity and collaboration, innovation case studies in both the corporate and social sectors, and the new ideas that have the power to change the way things have always been done.

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