The telemedicine space is getting a lot of attention these days. The Wall Street Journal’s Melinda Beck did an excellent overview of the industry, key players, issues, upsides and downsides. Boston’s NPR affiliate had a roundtable discussion of the industry a few days later that included Beck as a panelist.
The concept of telemedicine holds much appeal in these days when keeping people out of the hospital or doctor’s office is seen as a big cost saver. Having a doctor available by phone to answer questions could save a co-pay for the patient, missed work for the employer and a claim against the health insurance plan.
In describing telemedicine companies, a big focus is how many people are covered by an individual company. But in talking to Patrick Spain, a founder of First Stop Health, an emerging company in the telemedicine space, the key number in evaluating the value of a telemedicine company isn’t how many people or companies it has as clients.
The key number, according to Spain, is utilization: the number of people within a client company that actually use the telemedicine service. That’s where the ROI for the employer is found. Breaking it down further, Spain says that any utilization figures should break out the number of people who call, not just the quantity of calls. After all, a few people who use a telemedicine service over and over doesn’t have the same ROI as a broader number of people who may only use the service a few times.