Telemed vs Heads-in-Beds

It’s behind a paywall, but The New Yorker reported on telemedicine in “Hands Off”, John Seabrook, June 29, 2020.

A medical professional using telemedicine for the first time commented in a letter to the editor:

. . . my colleagues and I continue to wonder how a for-profit medical systems that relies on “heads-in-beds” can adequately deliver virtual care, particularly amid a pandemic. In developed countries with socialized medical systems, saving lives means saving money, because reducing the number of sick people lowers costs for the system. But in the United States the situation is reversed. Despite surging E.R. and I.C.U. admittances, hospitals - owing to the cancellation of lucrative elective procedures - are losing money and laying off staff. Although preventive medicine, such as a visit with a primary-care physician, produces the best patient outcomes, it generates only a fraction of an organization’s profit. Thus there is little economic incentive for health-care professionals to permanently adopt telemedicine.

I thought it was an interesting opinion, but it doesn’t seem to address all the economics involved.



…there is little economic incentive for health-care professionals to permanently adopt telemedicine.

It might be the insurance companies who select that option.

That seems counter-intuitive. The issue is (should be) what the reimbursement rate on telemedicine is, versus the inpatient visit? Plus, “lost workdays” for infected docs and staff due to seeing people in person, during the current time.

The docs who wrote are absolutely correct that the perversities of the current system provides poor financial incentive for solutions to come from the healthcare system.


Doctors are the ones being cut out. My own GP told me he if he had to do it again he would not go to med school. But that was 2 years ago. He is now starting his own practice w a subscription flat rate per month, catastrophic insurance patients buy on top of that. And most drugs will be free from his clinic or at reduced rate.

Telemedicine is being done by doctors on their own to enable them to get out of the system.

This part may be perceived as political, but not intended that way as it is very relevant to this investment. The law currently allows my GP to do this as well as take telemedicine calls. Canadian medicine not so much. So there is a real risk as an investment opportunity w government in this field.

Absent that, doctors are disintermediating third party payors by either starting their own clinics largely outside the system or just like an UBER driver but at higher compensation, taking teladoc calls. There are actually learning materials on line teaching doctors how to do this and earn $150 to $250k a year
And never leaving their homes. Does take a lot of hours however to make it so.

Telemedicine is here to stay. The success as an investment is not the same thing. But absent political issues we don’t need to discuss (as that is the real risk) telemedicine exists despite the insurance companies and the hospitals etc. it is freelancing doctors sick of the system.

Livongo is a different business, but Livongo, as they describe it, is taking baby steps to go direct to consumers. Would think that is a delicate thing for the mom to do, but they already have done it with CVS.



“preventive medicine…produces best outcome” in the real world (not counting vaccines I do not know if that is true. Many people who have chronic diseases simply will not make the disciplined life-style changes needed. You can tell fair skin people to avoid the sun but most of them will ignore you. You can tell type 2 diabetics to lose weight, but most won’t.
Prevention only works for some but it can be a lifesaver for others.