The Michigan Value Collaborative

Helping Michigan hospitals achieve their best possible patient outcomes at the lowest reasonable cost

Author: Chad Ellimoottil (page 1 of 2)

Telemedicine growth in Michigan has the potential to reduce episode spending

Chad Ellimoottil

Chad Ellimoottil MD, MS is Director of Analytics for MVC and is an Assistant Professor and urologist at the University of Michigan.

Telemedicine use is rapidly growing in the state of Michigan and is increasingly gaining the attention of health system leaders, payers and policymakers as a way to improve value in quality of care for patients. Telemedicine is defined as the delivery of healthcare services and clinical information using telecommunications technology. Telemedicine can be synchronous (real-time) or asynchronous (also called store-and-forward). There are several commonly used telemedicine modalities:

  • Video visit: A form of provider-to-patient telemedicine whereby a clinician conducts an office visit with a remotely located patient using live video
  • eConsult: A form of provider-to-provider asynchronous telemedicine whereby a primary care physician sends a specialist a brief question to avoid a formal consultation
  • eVisit: A form of provider-to-patient asynchronous telemedicine whereby a patient submits a question or photo and a clinician answers it a later time
  • Remote patient monitoring: A form of provider-to-patient synchronous telemedicine whereby a patient is monitored by clinical staff at home using a device
  • mHealth: All forms of telemedicine that are conducted using mobile applications


The growth of telemedicine in Michigan has been fostered by forward-thinking commercial payers including Blue Cross Shield of Michigan and Blue Care Network who have been telemedicine friendly. For example, in January 2016, Blue Cross Blue Shield of Michigan began reimbursing for telemedicine visits conducted by patients at home. As we move beyond the early adoption phase, it is helpful to think about ways that telemedicine may be able to help reduce episode spending. For more information click here.

Reducing readmissions

Telemedicine interventions such as post-hospitalization video visits and remote patient monitoring may help reduce readmissions for conditions such as congestive heart failure. For example, by engaging the patient one-week after discharge using a video visit, clinicians can ensure that the patient is complying with discharge medications and that he/she understands important dietary recommendations. A video office visit may be more convenient for a patient who has transportation issue. In addition, daily remote monitoring of the weight of patients with congestive heart failure may help clinicians intervene before a hospitalization occurs.  While the opportunities are promising, it is important for health system leaders to know that many studies have shown mixed results on the association between telemedicine use and readmissions [1-2].

Reducing emergency rooms visits

Telemedicine is used in two main ways in the ER. First, telemedicine can be used in the ER itself to help connect ER physicians to specialists.  Second, telemedicine can be used to prevent patients from arriving in the ER by offering them a faster solution at home.  This latter promise of reduced expensive emergency room visits has been driving much of the momentum for telemedicine adoption. Several studies have shown that telemedicine has the potential to reduce unnecessary, low-complexity, ER visits, however, the verdict is still out there [3-4].

Telemedicine offers a number of opportunities to help reduce episode spending. As the technology gains traction with payers and health systems, it will be important to build an evidence base to support its use in an optimal way.

  1. Feltner C, et al. Transitional care interventions to prevent readmissions for persons with heart failure: a systematic review and meta-analysis. Ann Intern Med. 2014 Jun 3;160(11):774-84.
  2. Comín-Colet J et al. Impact on clinical events and healthcare costs of adding telemedicine to multidisciplinary disease management programmes for heart failure: Results of a randomized controlled trial. J Telemed Telecare. 2016 Jul;22(5):282-95.
  3. Ward MM. Systematic review of telemedicine applications in emergency rooms. Int J Med Inform. 2015 Sep;84(9):601-16.
  4. Uscher-Pines L, Mehrotra A. Analysis of Teladoc use seems to indicate expanded access to care for patients without prior connection to a provider. Health Aff (Millwood). 2014 Feb;33(2):258-64.

Top 10 Takeaways from the National Bundled Payment Summit

Chad Ellimoottil

Dr. Chad Ellimoottil is a Clinical Lecturer and Postdoctoral Fellow at the University of Michigan.

Vinay Guduguntla

Vinay Guduguntla is a medical student at the University of Michigan and a Research Assistant with the MVC.

MVC had the opportunity to attend the 2016 National Bundled Payment Summit in Washington, DC. The annual Summit brings together individuals from academia, health systems, payers and industry to discuss the future of episode-based payment measures and bundled payments.  


Takeaway 1:  There are many unknowns. There are so many models out there, each with different guidelines and metrics. After listening to the Q&A sessions from CMS and large private payers, it is clear that bundling is a far from perfect science.

Takeaway 2: Addressing knowledge gaps in bundled payments is a priority. While we are in our second iteration of bundled payments, there is still much to consider regarding program development. A common topic was the level and appropriateness of data granularity (e.g. cancer staging). Specifically, the inclusion of patient-reported outcomes for quality measurement, incorporation of drug costs, and condition vs. procedure specific bundling were discussed. 

Takeaway 3: Start slowly. If you are a health system, do not be too disruptive when initiating a bundled payment program – one-sided risk is not that bad. It is nice to have initially as you work out the kinks of the model.   

Takeaway 4: Invest resources into care transformation that can scale. Future bundles are coming from both CMS and private payers, so it is important to have processes that are not tied to a specific reimbursement program (e.g., Comprehensive Care for Joint Replacement, Bundled Payments for Care Improvement). Many health systems and physician groups are planning for future bundles by developing bundles that are multi-state and multi-payer.

Takeaway 5: Care standardization is necessary for success. Consulting companies will spend hours with physicians understanding their practice patterns to reduce variation (e.g., who do physicians send to a SNF and why?).  In addition, health systems like Mount Sinai create clinical pathways that reflect best practices.

Takeaway 6: Physician engagement is key.  This message was echoed throughout the conference. When implementing a new bundle, make sure to start with a clinical department that is engaged.  Then, focus on building new workflows into current practice (i.e., use Epic). Change is not easy, though, and framing the situation is vital. At the Summit, Mount Sinai discussed using principles of behavioral economics to adjust physician behavior.  For example, people have “loss aversion”, or the strong tendency to prefer avoiding losses than acquiring gains, so it is better to highlight incentives as “lost money”. Unblinding data is also effective because it increases transparency and accountability.

Takeaway 7: Employer-led bundled payments is a rapidly growing area. Employers need to reduce healthcare costs, and are attracted to bundled payments. However, many employers lack the expertise to develop and implement bundled payments. For this reason, physician organizations (e.g., North Carolina Orthopedics) and institutions (e.g., Northwestern) rely on the payer or broker (e.g. Pacific Business Group on Health) to create a bundled payment programs. These programs have greater focus on consistent high quality service instead of dramatically lower costs. Overall, employers are taking a cautious “test the waters” strategy by trialing pilots of narrow networks rather than going all-in from the start. Walmart is arguably the best example of employer-led bundled payments.

Takeaway 8: Providers are approaching insurance companies with bundles.  CIGNA now has over 50 bundled payment arrangements in various states for various conditions. Blue Cross Blue Shield New Jersey (BCBSNJ) has reported the same.  These payers work closely with providers and other payers in the state to discuss the construction of the episode.

Takeaway 9: Pay attention to Arkansas state-wide bundled payment programs and Blue Cross Blue Shield New Jersey (BCBSNJ)[1].  Arkansas has state-wide, multi-payer mandatory bundled payments for multiple conditions.  As a result, Blue Cross of Arkansas has seen millions in savings. They have bundles for joint replacement, c-section, heart failure, and other conditions. BCBSNJ has showed similar success in this area, and has lots of experience with bundles. More information here on AR and NJ.

Takeaway 10: There are many companies in the bundled payment and episode cost analytic space. Venders are very willing to talk to hospitals about how their products can help administrators improve data collection.


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