1. Telemedicine Update for DBRA Members
Dennis J. Riedmiller, CBC
Riedmiller & Associates, Inc.
Chartered Benefits Consultant
September 29, 2015

2. “Mr. Jones the doctor will see you now in the office
“Mr. Jones the doctor will see you now in the office. Well maybe not today”!
Primary Care doctors – Calling all doc’s!!!
Where are You? Your doctor is only in office 28% of the work week.

4. Projected Demand for Primary Care Physicians
2010
2020
Total primary care physician demand (FTE)
212,500a
241,200
Generalb
164,400
187,300
Pediatrics
44,800
49,600
Geriatrics
3,300
4,300
Primary care physician supply
205,000
220,800
Supply and demand
(7,500)
(20,400)
a National demand projections presented in this report assume that in 2010 the national supply of primary care physicians was adequate except for the approximately 7,500 FTEs needed to de-designate the primary care HPSAs.
B This category includes general and family practice, and general internal medicine.

8. What Is Going On?
According to Centers for Disease Control & Prevention 1.25 billion ambulatory care visits in U.S. per year
Estimated that 33% or 417 million could be treated through telemedicine
According to National Association of Community Health Centers 62 million individuals in the U.S. have no or inadequate access to primary due to physician shortages
According to Department of Health & Human Services, ACA has expanded coverage to 16.4 million of the 47 million uninsured Americans
According to American Medical Association $734 billion, or 27% of all healthcare spending in 2011 was wasted due to unnecessary services, inefficient delivery of care and inflated prices

9. New Telemed Model - Active Platforms
Telemedicine is uniquely positioned to bridge the supply and demand gap between physicians and consumers
Fundamentally changing the way market participants access and deliver healthcare
Eliminating traditional barriers and inefficiencies and empower thru healthcare marketplace
According to Veracity Healthcare Analytics a client in 2012 with 150,000 members saved client $1,157 on average per employee. Return on Investment saved $9.10 for every $1.00 spent per member
92% of medical issues resolved which did not require follow-up
The Towers Watson 2014 study suggests that 71% of employers with more than 1,000 are expected to offer telehealth services by 2017

10. 2016 - The Future Has Arrived
Telemedicine Dream in 1925
The Future Has Arrived

12. Teledoc, Inc.
First telemedicine company to apply with the Securities and Exchange Commission for filing and approval as a common stock
Stock price range $19 - $35
$18.3 total revenue 78% from 2014
11.5 million members from 7.8 million in 2014 a 48% increase
$16.3 operating loss
Total visits projected to be 520,000 – 540,000

13. Game Players Teledoc American Well 1-800MD, LLC
Consolidation in the marketplace (Consult A Doctor, AmeriDoc, BetterHelp)
Hospitals and multi-specialty group practices
Dr. Phil – Doctor On Demand

16. Telemedicine Strengths
Concept is acceptable
Benefit Advisors “Channel Partners” are recommending to clients
HHS promoting for Medicare/Medicaid
Low Cost/High Value - $.70 - $4.00 EM/PM base costs
Alternative to costly Primary Care
Integrated technology platforms
High-Quality Provider Networks
Cost Reduction/Return on Investment
Increases access to appropriate care
Reduces use of hospital non-emergency care
Less absenteeism
Consumer Engagement
Telemedicine is an “Emergent” industry

17. Telemedicine Weaknesses
States are a patchwork of legislation
Teaching employees how best to use medical resources
Elderly have limited access to cell phones and computers
Some Benefit Advisors slow to move
Disincents rural hospitals to build more space

18. Phone & video consultations with Rx
Phone & video consultations, short-term Rx limits
Phone consultations only with Rx
Consultations unavailable

19. Telemedicine Opportunities
Trigger advancement in telecommunications
TPAs integration into medical model
$50 Billion+ industry in next 5 years
Sets the stage for more IPO offering
Capital infusion
Return of investment, lower utilization
Favorable utilization – 5% to 30%
Adds to inventory of alternative providers (Physician Assistants, Nurse Practitioners, Retail Clinics)

20. Telemedicine Threats
Legal field seeking new “victims” (no tort reform in ACA)
Rx in connection with telehealth visits
Evolving government regulation
Insurance companies could make punitive
Potential exposure to class action
History of net losses and deficit of some telehealth companies
Retention of qualified providers
Demise of solo medical practices
Primary Care group practice reduction of income
Prospect of drug abuse
State actions against business model

22. Opportunities of Telemedicine for Employee Benefit Advisors
Addition to product portfolio
Cash flow stream
True plan advisor due to financial reporting
Trend setter in industry
Educational propensity to serve client
Excellent alignment with wellness initiative
Cost reduction for employees and families
Wholesale model is aligned with traditional health and dental pricing
Market entry into new entities, like Association accounts, Board of Directors, 1099, part-time or seasonal employees
Some telehealth carriers offer retail products

24. Telemedicine is only for Large Employers or Entity Groups! Right?
Not Really!
“Money Follows Value” of any size!

26. Client Report Client located in rural Ohio, near Cincinnati
Blue collar manufacturing
37 full-time employees/75 members (2.02 family size)
Offered January 1, 2015
Reporting based on 8 months
No co-pay to employee
Fixed plan cost (Access Fee) is $4.00 PE/PM
Broker commission is $1.50 PE/PM
Client administration program cost - $1,188
15.5% employee/member utilization
Net savings - $4,258
Average savings - $ per employee
Return on Investment – 374%

27. What If?
What if I had a block of small group business based on 15.5% utilization with 1,000 employees that I service?
Let’s do the
math!

28. Agency Key Messages
Broker annualized commission - $18,000 ($1.50 commission x 12 months = $18.00 x 1000 = $18,000)
Aggregate client annualized costs - $48,000 - $48/Year/EM ($48 per employee x 1,000 = $48,000)
Percentage of hourly payroll based on employee W2 wages of $50,000 would be $0.023 cents per hour (2080 hours per year / $48.00/EM = $0.023 cents)
Aggregate annualized savings to client pool - $549,987 (Based on 15.5% utilization of 1,000 employees of $ per employee per year x 155) OR (using 2.02 factor size x $ family unit = $716,757

29. Outcome Message
Broker annualized commission - $18,000 ($1.50 commission x 12 months = $18.00 x 1000 = $18,000) Our Agency covered overhead with little time investment
Aggregate client annualized costs - $48,000 - $48/Year/EM ($48 per employee x 1,000 = $48,000) Offer a product at a low cost
Percentage of hourly payroll based on employee W2 wages of $50,000 would be $0.023 cents per hour (2080 hours per year / $48.00/EM = $0.023 cents) Offered a product that costs less than 1% of payroll with a 374% return on investment
Aggregate annualized savings to agency/client pool - $549,987 (Based on 15.5 utilization savings of $ = xyz Agency is a proven leader in savings significant dollars for our clients
Aggregate employee annualized savings - $354,830 XYZ offers a product that saves time and money, especially for those with high deductible health plans

32. TELEMEDICINE What are you waiting for???
Telemedicine is Here and NOW!!!