Tech Companies Are Transforming People’s Bedrooms Into ‘Virtual Hospitals.’ Will It Last Post-COVID?

When Curtis Carlson started having back pain this spring, he tried to put off seeing a doctor. The COVID-19 pandemic was raging, his job at a transitional housing organization in Ukiah, Calif. was busier than ever amid the economic collapse, and a hospital seemed like the last place he wanted to be.

But when he finally took himself to the emergency room and he was diagnosed with a kidney infection, Carlson figured he would have no choice but to stay. Instead, his doctors told him about a new program that would allow him to finish the rest of his hospital care at home, with a medical team monitoring him virtually around the clock and making in-person visits multiple times each day.

“I was blown away,” says Carlson, 49. When it became clear that staff would set up the equipment, which all fit on a TV tray, in Carlson’s home, and that he’d be able to communicate with his medical team via iPad, he was on board. “It was easy enough that I could use it, which was awesome,” says Carlson, who describes himself as “terrible” at technology.

Carlson’s experience was revolutionary, he says. After one night in the hospital, he was back at home with his wife and their four sons. “The biggest part for me was when I got home, seeing the look of relief on my seven-year-old’s face,” Carlson recalls. “While they were putting in the electrical wizardry, I asked him, ‘Were you worried about me?’ You could see him just crumble a little bit. He was definitely very happy Dad was home.”

Hospital administrators at Adventist Health, the system that runs the Ukiah hospital where Carlson went for care, had been looking for ways to reach rural patients outside their hospitals for years. But when the COVID-19 pandemic came to California this spring, administrators felt the timeline collapse. After finding the right technology in April, they began offering the service to patients like Carlson within 29 days. By May, Adventist Health had the infrastructure ready to care for 200 patients in their own homes.

Adventist is not alone in its warp-speed embrace of new technology during COVID-19. In recent months, hospitals around the country, looking for ways to free up beds for coronavirus patients, began expanding their virtual offerings, launching video doctors’ visits and virtual therapy sessions, and rolling out programs to remotely monitor vulnerable patients, like those in nursing homes. As doctors and patients embraced these new, online methods of care, Medicare, Medicaid and many private insurers temporarily changed their payment rules to accommodate them. But many of these changes are only guaranteed through October, and plenty of regulatory hurdles remain.

Now that it’s clear the pandemic is not going away anytime soon, medical providers and hospital administrators say they need more substantial reforms to ensure their investments in telehealth can continue. Whether innovations like remote hospital recovery beds will be available in the long term depends primarily on whether public and private insurers will continue to pay for them. In other words, in the topsy-turvy health care economy of the United States, it’s payment models—not technological ability or patient benefit—that will now determine the future of virtual care.

Hospital care at home

Prior to COVID-19, Medicare only covered telehealth services from certain providers. It also generally required telehealth patients to be located in a rural area and at a medical facility. Many Medicaid plans and most private insurers had similar restrictions. But after the coronavirus outbreak this spring forced nearly all doctors to stop seeing patients in-person, the Centers for Medicare and Medicaid Services (CMS) issued a number of waivers relaxing these rules, and private insurers followed suit.

Once CMS led the way, private insurers temporarily changed their rules too, and telehealth usage exploded. Between April 2019 and April 2020, telehealth claims increased 8,336%, according to FAIR Health, a nonprofit that analyzes private health insurance claims. More than nine million Medicare beneficiaries used telehealth services during the first three months of the crisis. And at University of Virginia’s network, which already had a more robust telehealth program than many others, virtual visits increased 9,000% between February and May.

“COVID-19 changed everything when it comes to telemedicine services,” says Dr. Karen Rheuban, director of the University of Virginia Center for Telehealth. “The genie’s not going back in the bottle.”

The Trump Administration is now pushing for more telehealth access. On Aug. 3, the President signed an executive order calling on CMS to permanently expand the kinds of telehealth services that Medicare covers, and the agency’s administrator Seema Verma has also said she believes access to telehealth should continue beyond the public health emergency. Broader expansions would need to come from Congress, where dozens of bills on telehealth have been introduced in recent months, but lawmakers have not yet seriously considered the topic.

Telehealth advocates say now is the time to act. A range of virtual offerings could be revolutionary for patients who are seriously sick, need long-term care, or live in rural areas, where hospital closings have left millions of Americans without easy access to treatment. “The environment in a hospital, although it’s very conducive to high intensity care, is not that conducive to being able to engage in normal activities of daily living that might be actually important for recovery,” says Dr. Michael Apkon, president and CEO of Tufts Medical Center.

In March, when Apkon watched Italian hospitals overflow with coronavirus patients, he sped up Tuft’s long-simmering telehealth plans. Apkon called Raphael Rakowski, the CEO of the tech startup Medically Home, and by April, the two organizations had launched a program that would provide hospital-level care in patients’ homes. Rakowski says he’s spent years telling hospitals they could reduce overhead costs and improve the patient experience by embracing care at home. “Sadly, it took a pandemic to amplify the patient’s role in their own care,” he says.

In order to be eligible for the Tufts-Medically Home partnership program, patients must typically have a similar profile to Curtis Carlson: they must have relatively stable health, be suffering from common conditions such as heart failure, diabetes, pneumonia, or kidney infections, and they must have a safe, stable place to live. If a patient meets that criteria, Medically Home provides all the equipment, including communications devices, monitors, backup internet, cell signals and power sources. (Some locations are admitting patients such as those with cancer, COVID-19 or who need longer-term care, and over time those will grow, says Rakowski.)

In Boston, where Medically Home is based, the tech company itself employs nurses, paramedics and other staffers who visit the Tufts patients in person several times each day to administer IVs, do blood tests or provide other care, and the patient checks in with their doctors via video. In California, where Carlson was treated, and in other locations, Medically Home’s partner hospitals provide the staff. Teams of nurses and physicians also monitor each patient 24 hours a day from a “command center,” and can be reached immediately if any questions or complications arise.

Even accounting for the time and cost of staff traveling to visit patients at their homes, Rakowski says at-home hospitalization costs about 20 to 25% less on average than care in a traditional hospital setting. In California, where Carlson was one of Adventist Health’s first patients to use the Medically Home model, Adventist Health President Bill Wing sees significant savings in the future. Maintaining hospital facilities and building new infrastructure is very expensive, he notes, so if Adventist Health can care for more patients remotely, it could potentially avoid hundreds of millions in construction costs.

“I believe that longer term we’ll see at least 20 percent less utilization inside the four walls,” Wing says. Adventist Health had been considering building a couple new hospitals, but may no longer pursue those plans, he says.

Keeping patients healthy

Telehealth can also play an important role in helping patients before they reach the point of needing hospital care. When non-urgent procedures were canceled during the early months of the pandemic, many Americans turned to virtual visits to keep up with routine treatment and ask for guidance from health care providers before venturing into offices.

While some doctors have returned to in-person visits, telehealth remains an important component of many practices, says Dr. Joseph Kvedar, a dermatologist in Massachusetts and president of the American Telemedicine Association. Physicians in his office have all added a half day of telehealth onto their in-person schedules so that they can keep the number of patients in the waiting room low and minimize their exposure to the coronavirus.

Even emergency rooms, which typically serve the purpose of receiving unexpected in-person visits, have turned to telehealth. This spring, the University of Virginia started a virtual urgent care service to address smaller problems without requiring patients to come to the hospital. UVA also expanded its remote monitoring program to keep tabs on patients quarantined at home with COVID-19.

And as nursing homes and other congregate care settings saw massive outbreaks of the virus, University of Virginia doctors developed a telemedicine strategy that allowed them to partner with long-term care facilities, rapidly deploy technology, coordinate care with on-site nursing staff and reduce hospitalizations.

These kinds of programs do require large investments in technology and training, UVA’s Rheuban says, but in the long-term, she has seen that telemedicine “diminishes the need for in person visits and improves clinical outcomes.”

Paying for the care

For these innovations to continue, doctors and health systems need to convince insurers—or lawmakers—that virtual services go beyond convenience and are important for treating a broad range of conditions. Already, commercial insurers are raising questions. “Since we’ve had this explosive growth, we don’t necessarily know what the impact on patient outcomes has been,” says Kate Berry, senior vice president of clinical affairs and strategic partnerships at America’s Health Insurance Plans (AHIP), the industry’s main lobbying group.

During the pandemic, many major insurers have reimbursed telehealth at the same rates as in-person visits. Some have said they will continue these rates until the end of the year, while others have not made decisions past September or October. AHIP says it wants patients to have access to telehealth, but is opposed to laws that would mandate coverage or require insurers to reimburse telehealth at specific rates.

Nancy Foster, vice president of quality and patient safety policy at the American Hospital Association, says that some of her organization’s members have already heard from insurers that don’t plan to cover telehealth beyond the emergency, or that only want to cover it at reduced rates. “They seem to be taking some steps back, which is unfortunate,” she says. “It may be yet another thing that creates a greater opportunity for the wealthy than for those who are unable to afford the additional cost of paying for it themselves.”

The AHA supports the changes that CMS has made and is advocating for Congress to pass legislation that would allow more permanent flexibility in where patients could be and what technologies they use to access telehealth.

But cost is still a central concern for lawmakers and insurers. “There have been a bunch of barriers to telehealth,” says Glenn Melnick, a health care economist at the University of Southern California who studies hospital systems. “If you take those out of the equation, utilization is going to go up.”

In the current system where each visit means a separate fee, this could add up quickly. Physicians typically argue that telehealth should be paid the same as in-person care because the work is equally complex and time-consuming, but insurers will want to find savings. “It’s sort of a balancing act,” says Josh Seidman, managing director at consulting firm Avalere Health. “There are going to be a lot of changes over the next six to 12 months that will last long term in terms of how care is delivered and paid for.”

In the meantime, Medically Home and its hospital partners are working to secure more commitments from private and government insurers to cover their care. Both Adventist Health and Tufts are excited with the results of the program so far, but their leaders say the program’s ability to scale remains to be seen.

Carlson, the patient in California, had his stay covered by his state Medicaid plan, and says he would choose the at-home model again if he needs care in the future. After four days of treatment at home, his doctors determined he was ready to be discharged. But before the Adventist team moved forward, they helped Carlson find a primary care physician, transitioned his records and relevant information, and made sure he scheduled a follow up appointment. The tech team arrived to pick up the equipment and Carlson remained in place. “No complaints,” he says.