The doctor will see you now . . . online: American Well powers virtual visits

We're already totally comfortable using the Web to pay bills, shop for books, look for mates and reveal to the world our darkest secrets -- checked out PostSecret lately? So are we ready to go online to talk to a doctor about our migraines and our leaky bladders? If you ask digital-consultations provider American Well, the answer is apparently yes.

In January, the Boston-based outfit's service went live in Hawaii, offering physician appointments by phone, secure chat and video-conferencing to the state's 1.3 million residents through the Hawaii Medical Service Association. (Health plan members pay $10 to use the service while non-members can "see" a doctor virtually for $45). Then in April, insurer Blue Cross Blue Shield announced the American Well-powered virtual clinic would be available to 10,000 employees and their families in Minnesota. Since then, American Well has inked more deals.

It will come as no surprise that every time a health plan steers a patient away from a doctor's office toward a Web visit, it can save a lot of money -- potentially more than 50 percent of the cost of an office visit. Roy Schoenberg, American Well's chief executive officer, says a trip to a brick-and-mortar doctor's office can cost a health plan more than $100. Seeing a doctor via two-way video or secure chat can cost the plan less than $50, he says. "You're seeing a very significant cost reduction to the health plan."

To get a better feeling for how it all works, I caught up with Schoenberg, a doctor and previous entrepreneur, on the sidelines of this week's Health 2.0 Conference in San Francisco.

American Well built a back-office system that allows health plans in turn to get their own doctors chatting and video-conferencing with patients. But that was the easy part, Schoenberg says. More challenging was figuring out how to handle huge amounts of sensitive data so doctors could review patient charts and prescribe medications during their virtual appointments. "We've done the heavy lifting to bring every record in front of the physician," says Schoenberg, who sold the previous company he founded, care-management software firm CareKey, to TriZetto Group for $60 million in 2005.

Electronic doctor consultations aren't exactly new. Large insurers Cigna (CI) and Aetna (AET), for instance, have been offering e-visits to their members through RelayHealth since 2006. But Schoenberg says that typical e-visits can amount to sending a note to a doctor and waiting a while for a response. American Well's system, he says, allows patients to go online and click on any of the physicians ready to begin consulting immediately. "That is the biggest change," he says. "We live in a world where immediate gratification is the name of the game."

Patient co-pays cover the cost of the virtual visit, he says. But to lower their costs, some plans may reduce online care co-pays for "expensive patients," or those who are constantly in and out of the doctor's office, he adds.

What ailments are patients seeking care for online? Some of the main complaints are rashes, migraines, infections and lower-back pain, he says. "Mostly primary care issues are the ones we see in the system," he says.

But some are getting appointments for the management of chronic diseases, Schoenberg adds. A patient with diabetes, say, might see the doctor in the office once a month and have virtual consults in between, he says. "That allows patients to get good compliance with treatment."

Not everyone in the medical establishment is sold on the idea of virtual visits, especially if they're being used by doctors who have never "seen" the patient before offline. American Medical Association President James Rohack, for instance, told the association's publication American Medical News last year that there are parts of medicine that should be handled with an in-person visit. "A face-to-face interaction to allow the nonverbal communication, and a physical examination is needed for most diagnosis and treatment," he told the publication.

Part of the push for telemedicine -- a field in which clinical care can be delivered over the phone or internet -- comes from a demand for more convenience. People living in remote areas -- or perhaps those who don't want to get off the couch -- like having another option to talk to doctors. Some 78 percent of Americans want to be able to communicate with their doctors online, says American Well, citing a recent survey from the California HealthCare Foundation.

But pressure is also coming from health care providers, and the people who pay them, to find ways to control escalating health care costs -- now 16 percent of gross domestic product, versus just 5 percent in 1960.

For doctors, the arrival of services like American Well's "Online Care" may present an interesting dilemma. For the first time, there may be a way for them to get paid for responding to patient phone calls or emails. Typically, time spent on such tasks has not been something for which they have charged patients.

Doctors who sign up to be on call with American Well's system can get anywhere between $25 to $35 per patient consultation, depending on where they're located, Schoenberg says. "For 10 minutes of their time with zero overhead, it's quite a good thing," he says. American Well covers the doctors' malpractice insurance through a company called Lexington Insurance.

But it's unclear how doctors may feel if greater numbers of patients are diverted from regular office visits for which physicians are paid more. For its part, American Well charges a licensing fee to health plans to make the technology available. Some health plans may also pay an additional fee to have American Well host the service. Plus, the company receives a transaction fee for every consultation. "That allows us to align interests for our clients," Schoenberg says.

And American Well seems to have little problem adding clients so far. TriWest Healthcare Alliance, which provides health care for military service members and their families, said in June it would use American Well to hook up patients with behavioral health providers, including social workers, psychologists and psychiatrists. The service was available in Hawaii as of August 1. And around the same time, national insurer OptumHealth said it would make the service available to its members across the United States. "Our goal was to go national in 2011," says Schoenberg. "This has become a reality sooner than that." Does this mean more Americans could be seeing the doctor in their pj's?


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