Movers & Shakers - A Conversation with Dr. Roy Schoenberg: Why Now is the Time for Telehealth to Take Off
MO V E R S
S H A KE RS
A Conversation with Dr. Roy Schoenberg:
Why Now is the Time for Telehealth to Take Off
“We Accelerate Growth”
MOVERS & SHAKERS
Interviewed by Nancy Fabozzi, Frost & Sullivan
American Well Systems, founded in 2006, provides a patented telehealth solution consisting of software,
services, and access to clinical services. American Well’s goal is to augment the in-office physician visit,
thereby improving access to quality healthcare for a wide range of consumers. The company’s core
offering is its Online Care Suite, a telehealth solution that connects providers and patients for live clinical
encounters using mobile, Web, or telephone.The company, which is currently the nation’s largest telehealth
network, also handles all the administration, security, and record-keeping that modern healthcare requires.
American Well’s core customers are healthcare consumers, national and local health plans, delivery
networks, retail pharmacies, providers, physicians, and payers in the United States and internationally.
The company’s partners include prestigious healthcare organizations such as Ascension Health,Veteran’s
Administration, Massachusetts General Hospital, Tufts Medical Center, OptumHealth, WellPoint, Rite Aid,
and numerous others. American Well is headquartered in Boston, Massachusetts.
As part of Frost & Sullivan’s ongoing analysis of the digital transformation of US healthcare, Nancy Fabozzi,
principal analyst with Frost & Sullivan’s Connected Health group, spoke with Dr. Roy Schoenberg, president and
CEO of American Well Systems, to get his perspectives on key trends impacting telehealth and what it takes to
successfully compete in this market. The interview took place at the American Telemedicine Association (ATA)
Annual Meeting and Trade Show, recently held in Baltimore, Maryland. Dr. Schoenberg serves on the board of
the ATA and is the 2014 recipient of ATA’s Industry award for leadership in the field of Telemedicine. In 2013,
Schoenberg was appointed to a telehealth task force convened by the US Federation of State Medical Boards
(FSMB).The federation recently delivered landmark guidelines for the appropriate use of telehealth in medical
practice, which he contributed to. Schoenberg founded American Well with his brother, Dr. Ido Schoenberg. Both
have a long history in health information technology. Prior to American Well, Roy Schoenberg was president and
founder of CareKey, a care management/patient portal company, which was acquired by the TriZetto Group in
2005. He also founded iMDSoft, a high-acuity care IT vendor, along with his brother Ido and Ido’s wife, Phyllis
Gotlib. Roy Schoenberg holds an MD from Hebrew University and an MPH from Harvard. Frost & Sullivan is
honored to feature Roy Schoenberg and American Well Systems as part of its Movers & Shakers series.
Movers & Shakers Interview
with Roy Schoenberg, MD, MPH,
President & CEO, American Well Systems
ROY SCHOENBERG, AMERICAN WELL SYSTEMS
Nancy Fabozzi: Talk about how you got started in
health IT and how you came to your current position
at American Well.
Roy Schoenberg: I was born in Israel and trained in
medicine there. I also served in the Israeli military as a
physician. From an early age,I liked playing with computers as
a hobby. My brother and I started our first software company
back in Israel called iMDSoft. That company created clinical
IT systems for intensive care units and operating rooms.
(Note: iMDSoft was acquired byTPG Capital in 2012).An early
adopter of iMDSoft was Massachusetts General Hospital, so
I started to fly back and forth between Boston and Israel.
This was around 1995. In 1998, I got an invitation to join the
informatics group at Harvard/MIT as a faculty member. So
I did academics for a couple of years and then my brother
and I started CareKey, where our focus was patient portals.
Our timing was fortunate with CareKey as this was roughly
around the time that HIPAA came into play, which caused
health insurance plans to realize that they needed to start
talking to their membership to get consent for managing
personal health information. After CareKey was acquired by
TriZetto, I spent some time ensuring a smooth transition.
Then, during a long-awaited vacation, it occurred to me that,
even though patients signed up for the portals, many didn’t
keep using them.We had a lot of early excitement and then
it kind of waned.
NF: When I looked at the patient portal market last
year, I realized that most of this market is dominated
by enabling administrative functions. So “stickiness”
RS: That’s right. When you look at the consumer online
industry as a whole, everything is transactional. You can buy
airline tickets, download a movie, buy stocks, etc. You can
get the goods. In healthcare, prior to the development of
the telehealth industry, you could only get information–like
that provided with theWebMD’s of the world. You could get
health information but you couldn’t actually get healthcare.
We started American Well with the understanding that we
are now stepping into an era where the technology and the
need converge to the point where we can actually deliver
healthcare online. In doing so, we are going to do a lot of
good for a lot of people. And if we change the way people
acquire healthcare, that can have a big impact on costs. So
this was the thinking around seven years ago. I think it was
the right time. But it took a good number of years for the
telehealth market to get the point of alignment that we see
here today (at ATA) and almost take for granted. When
we started American Well, we had the technology to bring
patients and providers together, but needed to determine
the best entity to bring telehealth services to the market.
From the very beginning, we chose to bring that service
out through the large health insurance companies. They
were, and are still to this day, our biggest clients because,
fundamentally, they are the one entity that brings together
patients (or members) and providers that they contract with.
We felt that health plans were the natural introductory point
for American Well and this new technology.
NF: And you had those payer contacts from your
previous business (CareKey)?
RS: We had those contacts and the experience of working
with health insurance companies. That was helpful. This
industry puts a lot of focus on credibility and relationships
so this seemed like the right way to go and it was the right
decision. I don’t think we would have been here today
without the support of many of the large Blue Cross and
Blue Shield organizations, UnitedHealth Group, Wellpoint,
and others. So we started the new company and moved
along steadily for a number of years. In the last two years, all
of this started really accelerating.
NF: Before we look at trends impacting the telehealth
market today,let’s take a step back and look at how this
market came about. First,can you explain the difference
between telemedicine and telehealth?
RS: Well, telemedicine has been around for decades.
Different people have different definitions of telemedicine,
but this was fundamentally technology designed to connect
physicians. For example, you might have a physician with
a very deep specialty, say oncology, who worked out of a
specialty center,usually in an urban area.Then you had remote
physicians, often primary care physicians, that needed access
to that specialist. Every technology in the book, ISDN lines
MOVERS & SHAKERS
and older technologies, were used to connect the two. But
it was really to allow physicians to communicate.Telehealth,
which is kind of the little sister of telemedicine, showed up
just about five or six years ago. It was based on the same
notion of delivering care, but on the other end of the line,
you now have the consumer–the patients themselves rather
than the physician. This is a completely different thing. Today,
telehealth is using modern technology–Internet-based
mobile and Web video– to really connect physicians and
their patients. If telemedicine was really more of an efficiency
tool to allow skills to be spread inside the healthcare system
delivery arm, telehealth has the opportunity to completely
change where healthcare takes place and the accessibility of
healthcare for all of us.
NF: What is driving this new urgency,or acceleration,
around telehealth that we are seeing today?
RS: Our healthcare system is further and further stretched.
It can be a difficult and painful process for people to get
access to healthcare, and not only in places with challenging
geography. Even if you live in Boston, where it seems like
every other person is a physician,good luck finding a primary
care physician–it’s just impossible. Getting a specialist is
ridiculous! And we have all of those other barriers–like
people that don’t have insurance or that have insurance with
a high deductible that makes them pay a lot of money out
of pocket. Then there is the whole world of patients who
may have insurance and may live in a metropolitan area, but
they have chronic conditions and need ongoing care or they
are elderly and it’s difficult for them to leave their home.
There is also a new attitude about healthcare. Today, there
is a growing notion that patients have to have some level
of accountability for their own healthcare. It wasn’t the
case until a couple of years ago where, at least financially,
we didn’t care. We had health insurance, paid a co-pay,
and we just consumed whatever healthcare we needed
to consume. Now, everyone understands that that can’t
happen. We have to have skin in the game. A byproduct of
that new attitude is that we are slowly but surely becoming
consumers of healthcare services. We are beginning to ask
“do I need this?” “What’s the next best thing for me to do?”
With that attitude comes the understanding that we are now
beginning to guide ourselves through that maze of healthcare
in order to save money and to appropriately consume
healthcare. Telehealth brings healthcare to us, essentially like
GPS. It helps us navigate healthcare. For many, telehealth is
becoming the first line of defense if we are the ones deciding
what healthcare we need to consume. That’s the key reason
that, in the last year or so, everybody has figured out that
this is the one technology that is going to fundamentally
NF: I’ve been hearing here at ATA a lot of talk about
the new position on telehealth from the US Federation
of Medical Board (FSMB). Can you explain that?
RS: Until the recent position on telehealth from FSMB,there
was a lot of great innovation (in the telehealth market) but
it was like any other novelty–something that people really
appreciate and really encourage, but many looked at it like
playing in a sandbox. It was interesting, but not yet part of
the mainstream. For example, getting paid for telehealth as
a doctor was difficult because the codes for telemedicine
are primarily for physician-to-physician or telemedicine
interactions,not the consumer side,or telehealth. One of the
main issues was that the medical authorities in this country
had never formally recognized telehealth. Medical boards are
the ones who issue licenses for physicians,or take the license
away if needed. They are the authorities on what is approved
medical practice. And they have been,across the board (until
now), skeptical about telehealth. Why? Potential competitive
issues, disruption, reimbursement questions, and, quite
appropriately, concerns about patient safety, which is really
their main charter. But this year was the first time that the
FSMB stepped forward and said that they believe that good
healthcare can be rendered through telehealth technology.
(Note: On May 9, 2014, the Federation of State Medical
Boards formally adopted new guidelines aimed at ensuring
the safety of telemedicine.) Essentially, what they said was
that, under very well-defined and well-controlled settings, it
is legitimate to establish a patient-physician relationship via
the use of video telehealth technology, as opposed to an in-
person visit, and to render care, including prescribing. This
is the first time in the US that the medical authorities have
embraced telehealth. This is a big deal.
ROY SCHOENBERG, AMERICAN WELL SYSTEMS
NF: What was the impetus for the change of attitude?
Why did they come to this conclusion now?
RS: I think there is a growing understanding in the medical
community that the inaccessibility of care cannot possibly be
better than allowing a patient to get in front of a physician
with this technology. With modern, video-based telehealth
technology allowing patients to get access to quality
healthcare where they wouldn’t have it otherwise, there was
no longer a moral justification to say “this is bad,” therefore
causing the patient to potentially be stuck at home and not
get care at all.
NF: So are the FSMB guidelines a real game-changer
for the telehealth market? What’s different now?
RS: The thing about the FSMB guidelines that will potentially
shake up the market is that while the Federation said that they
will allow healthcare to happen through telehealth, they are
also very specific about how that will look.That means not
everybody can do telehealth. FSMB actually lists the criteria
and the operational principles of what makes a good and
valid telehealth encounter.So they literally eliminated a lot of
players in the industry that were just doing email encounters.
That cannot be considered good healthcare. FSMB has said
that if you are to establish a physician-patient relationship,
you have to have video. This is because, if I’m a physician
treating a patient where there is no pre-established contact,
the visual clues become very important.The physician needs
to see whether the patient is young or old, whether the
patient is septic, frail, and so on. FSMB understands that for
patients interacting with their own physician, where the
relationship has been established, it is perfectly acceptable
to interact through phone or email as part of follow-up
care. That is encouraged. But if a patient is forming a new
relationship with a physician, there has to be a starting point
of intimacy that allows good care to be rendered. And for
that, you need to see your doctor and your doctor needs to
see you.That’s not going to happen through email or a phone
call from a doctor the patient has never met before, hoping
that good healthcare will come out of it. FSMB said this is
where they draw the line.
NF: Obviously, FSMB is concerned about patient
safety.What are some of the potential patient safety
implications of telehealth? Clearly, a safety violation
can put the skids on this new technology very fast.
RS: The state medical boards and associations are chartered
with making sure that patient safety is upheld, that we don’t
shoot from the hip because something looks sparkly and
interesting. A lot of people, especially at this conference,
are very eager to start allowing everything under the sun
to happen. We are seeing concerns about patient safety, like
physicians that are delivering care through the telephone
without seeing patients. We are seeing their license being
revoked and other actions from medical boards around
the country. I am all for the enthusiasm, but we need to do
telehealth right because if we do it wrong and some bad
apples cause patient harm,the entire industry will be marked.
That’s the thing that scares me the most. If people invest
money in companies that are pirating telehealth, we will end
up with so many misunderstandings about the safety and
appeal and vision of this industry, and we will set it back.
ATA is rolling out a certification program for telehealth
vendors that will create transparency for the public.This is
not only protecting patient safety, but it is also important for
companies that want to operate in the telehealth ecosystem.
A certification program like this is going to provide a good
benchmark for vendors to understand what they need to
build, what standards they need to comply with, and what’s
good telehealth in medical practice.The clarity around (these
standards) is also going to change the industry very quickly.
NF: One of the things that has impressed me at ATA is
seeing the high level of quality of the technology; the
clarity of the video and sound. It actually makes for
a very satisfying encounter, and much more intimate
than I thought. It seems this is conducive to high-
RS: I think in years to come, it is going to become clear that
not only can telehealth technology provide safe healthcare,
but in some circumstances, it can do more effective and
more beneficial healthcare. One of the aspects of telehealth
is the assumption that, as a patient, when you tap into a
MOVERS & SHAKERS
telehealth network, there is going to be a physician there.That
is also a change in thinking. Physicians usually don’t wait for
you, you wait for them! So at AmericanWell, we have invested
a large amount of development dollars to focus on building a
brokerage system that allows physicians to make themselves
available on their own terms and then allows patients to come
in on their own terms and still marry them effectively. That
network of real-time availability of healthcare services across
a national network also allows you to do some unbelievable
things. For example, say you’re diabetic and, during the
telehealth encounter, the physician tells you what you eat is
very critical for controlling your blood sugar and that you
need to talk to a nutritionist. Right there, the physician can
hand you over, in real time, to a nutritionist on the network
that can pick it up from there and help you. So you can literally
sit there, see the physician and then seamlessly transition to
a nutritionist. This is a totally different process from what
usually happens today, where one physician sends you to
another side of the healthcare system hoping that you’ll follow
up and get the care you need. However, you may never come
back, no one follows up, and so on. This fragmentation leads
to gaps in care, worse outcomes, and higher costs. The patient
gets lost along the way. Also, there are new things that we
can do with telehealth that we have never thought about.
For example, our client, WellPoint, recently provided one of
our telehealth kiosks to a large homeless shelter in Ohio
through the work of their charitable foundation. The kiosk
was delivered by FedEx, plugged in, powered by the Internet,
and then, instantly, everybody in this very large homeless
shelter had healthcare! These people, who are a challenging
population, had zero access to healthcare and then suddenly,
out of nowhere, they had access to healthcare.
NF: Amazing. This is like what Dr. Paul Farmer spoke
about in his opening keynote about telehealth as a
tool for global health equity.
RS: Absolutely. We have an opportunity here with this
technology to bring healthcare to where it’s needed most.
We think about those things and how it changes people’s lives
in environments like Haiti or a homeless shelter in Ohio, or
federally qualified health centers serving Medicaid patients.
In addition, so much healthcare has to happen with elderly
populations that are not necessarily deprived or not covered.
They have Medicare but they are still very challenged in
getting the healthcare they need. There is enormous social
value in telehealth, and that is why this industry is seeing its
inflection point. It’s because people now understand that this
will impact the lives of Americans. One of the reasons this
has happened is because the health insurance companies–the
Blues,WellPoint, UnitedHealth Care–took a step ahead of the
government payers and said that they fundamentally believe
that this (telehealth) will be part of the fabric of healthcare in
the US. These payers have gotten ahead of the game and have
introduced telehealth into their benefit structure. So between
the health insurance companies covering it as a benefit,
between the medical state boards embracing this, because of
the government’s increasing awareness of this, and because we
all now have the technology to do this via our smartphones
and computers, this is all new. We didn’t have this five or six
years ago. But it’s now here, today.
NF: What is the training that goes into helping
physicians conduct an effective and appropriate
telehealth consultation with patients? Is AmericanWell
involved in medical training efforts?
RS: We are very involved in this because, side by side with
the legitimacy of telehealth, comes the understanding that
the physician that you see through telehealth will understand
that medium and be able to give you good-quality and safe
care. And that means that physicians also have to learn the
advantages and disadvantages of seeing a patient through
videoconferencing. At American Well, we have been fortunate
enough to be given the right, with some of our clients, to
build networks and train physicians on how to do telehealth
right. We’ve started certification and training programs.
We’ve learned a lot over the years. For example, we found
the level of intimacy that happens when a patient is sitting in
their home, with a good chunk of uninterrupted time with
a physician, is actually sometimes better than being chased
through exam rooms, and having the physician brought in for
three minutes ... . Today, a lot of medical schools are doing
courses or introducing telehealth and telemedicine into the
curriculum. There are medical schools that have created
telemedicine labs for medical students to train in, including
the use of biometrics. This is really amazing when you think
about the new generation of physicians. They know how to
ROY SCHOENBERG, AMERICAN WELL SYSTEMS
do this and they’re ready for it. That’s why this is a perfect
storm brewing; we have so much need and we’ve stretched
the healthcare system so thin that we have got to start
embracing new technologies in the delivery of care.
NF: The drivers for telehealth are certainly strong
and that’s one reason we are seeing so many vendors
jumping into this space.
RS: A lot of people are mistaken to think that telehealth is
just videoconferencing–that it’s a glorified Skype or something
like that.The truth is that, when you start peeling the onion
of what it takes to actually have a healthcare encounter,
this is not about getting two talking heads together. This is
also about the full clinical documentation that encompasses
Electronic Health Records (EHRs),coding solutions,care plans,
identification, authentication, and so on. It’s endless; but this is
the spaghetti that needs to be in place in order to allow quality
healthcare to take place. What’s happening now in the market
is that investors are pouring money in and there are a lot of
Tom, Dick, and Harrys out there saying they can do telehealth.
But it’s not just about buying WebRTC or something, adding
a little bit of technology that has videoconferencing, and then
you’ll have a telehealth system. That’s the same mistake that
happened with EHRs,the same naiveté that thinks just because
you have Microsoft Word you can be an EHR. You really have
to understand that, if you are trying to stretch the health
system into the patient domain, it has to speak healthcare, not
videoconferencing. The challenge (for a successful telehealth
service) is that not only does it have to speak that language,
but it also has to speak the consumer language. Blending the
two together is a major challenge. One of the things we are
seeing here at ATA is that we are beginning to cross that line
where we now have systems with maturity that can do both
and blend that, delivering unbelievable, unfathomable value.
I think one of the great developments that we’ve seen literally
in the last year is that people from every area of the healthcare
system are coming out and saying it’s now time for us to put
our arms around telehealth.
NF: What is the trajectory for vendors in this market?
Will we see lots of players jump in and then we see
this market will stabilize at a state of 300 million transactions
per year. We don’t even have a million transactions per year
now. So there is potentially a huge growth curve to the market.
That’s why we are seeing so many vendors wanting to enter
this market. But investors have to be very careful because
once you start realizing that telehealth is part of healthcare,
every one of those systems can’t just be a glorified Skype, but
it has to tie into reimbursements and EHRs, etc. Once you
have to tie all these pieces together, the lifting is much heavier.
So today, we see a lot of new companies coming in, bidding at
our fees, and winning because they say they can deliver on a
variety of things. Then six months into the process they are
being thrown out and we see the contracts coming back to
more established players. In terms of the future, I don’t know
if the telehealth market is going to consolidate around a few
key vendors like with what the EHR market has done with
Epic, Allscripts, etc. But you are going to rapidly see a lot of
dissatisfaction from the flurry of newcomers,and that will result
in a growing understanding of what it actually takes to make
telehealth a part of healthcare delivery and see the ROI. That’s
when the market will recognize and value serious, established
companies that have the experience of working with delivery
systems, health plans, employers, and governments.Telehealth
is a very serious extension of healthcare, so I expect we will
see this market consolidate very quickly.
NF: Final thoughts?
RS: There is no question that the growth of the telehealth
industry has affected American Well in a very favorable and
exciting way. We try to take a conservative course in the
sense that we work very closely with the medical boards,
with medical associations, and other organizations from
everything like ATA,American Medical Association (AMA), and
others. That strategy has paid back dividends in a great way
because we are the telehealth operator of the very largest
systems. Between the new ATA certification for the telehealth
services, the pillars of good healthcare like the medical boards
coming on board, numerous bills advocating various telehealth
endeavors before Congress, and what we are seeing at this
conference with the investment community coming in–we are
truly at the inflection point of this industry, without a doubt.
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