First Stop Health – Interesting Approach To Growth In Telehealth

“We have over 30% utilization from all of our clients’ plans,” states Patrick Spain, CEO of telehealth provider, First Stop Health (FSH.) Plan utilization is a sometimes overlooked key aspect of the telehealth business. Spain adds, “We try to get users to use our service.”

The 30% is far above industry averages, said to be 6-8%. As Rock Health stated about the recent IPO of industry bellwether Teladoc: “…Overall utilization of Teladoc services is low, with best case rates (assuming no members utilized the service twice), reaching only 3.7% in 2014—which represents growth over 2013’s abysmal 2.1% utilization rate, but is still demonstrative of the challenges Teladoc faces ….” (

How To Encourage Patient Utilization

FSH uses two strategies to encourage members of corporate plans to actually use the service. First, they touch each individual user eight times in the first eight weeks of their membership – via email, posters, mailings, webinars, etc. – and thereafter one-to-two times per quarter. Secondly, Spain explains, they shun plans that have co-pays – this means that contacts with doctors are free to the individual user. (Utilization is defined as an employee using the plan at least once during the subscription year).

We asked Spain what accounts for his company’s aggressive approach. He believes that many other telehealth providers have an insurance-type mentality, that claims are not a good thing. Spain, however, has a digital information industry background – including, among other ventures, having been co-founder and CEO of Hoover’s (sold to D&B.) Thus he is accustomed to the concept that utilization is the ultimate indicator of success.

Advocacy Services In Healthcare

Another aspect of FSH’s approach that interested us is their provision of Advocacy services. Spain and associates had actually started with an emphasis on advocacy, but concluded that it would not support a scalable business on its own, because individual health plan users don’t have many recurring needs for advocacy (such as help with billing situations, or recommendations to specialists).

Instead, they turned to building a network of doctors and offering telehealth services. However, they still include advocacy as a feature and, he states, 40% of accounts choose it. There are three types of advocacy: a) Guidance, which permits an employee with a serious medical condition to get advice, such as a reference for a second opinion or direction to a source of excellence in treating the condition; b) Reviewing the patient’s side of a bill and helping to get a reduction when it is due; c) Auditing the billing history of large claims for their self-funded corporate clients.

FSH Telehealth Targets: Enterprises vs. Individuals

FSH targets self-funded health plans of mid-sized employers – with between 500-5,000 employees. Among this group, Spain states that 80% are self-funded. FSH gives clients a guarantee that it will save them money and will refund some of their fee, if they don’t.

While FSH has not experienced much demand from individual users, as opposed to enterprises, Spain believes this will change, in a big way, over time. “In ten years, 100% of adults will use telehealth service,” he asserts. The company is “dipping its toe” in the individual side of the market, and plans to offer service in several of the Obamacare exchanges next year, which is a first.

Longer Term Changes In Telehealth And Healthcare

What about the longer term outlook for healthcare? He believes that new aggregators – that are digitally focused – will arise for consumer-oriented healthcare, and he mentions companies such as Castlight and ZocDoc.

He believes that technology can make a big contribution to telehealth by facilitating ease of use of secure video consults. Over 90% of FSH’s consults today occur by telephone. He also looks forward to the proliferation of more connected health devices and the ability to collect longitudinal patient data.

He also foresees major changes in the management practices of an industry that, he points out, will be pressed to handle the matching of supply and demand – “25,000 primary care doctors short!” He references on-demand taxi service companies as examples of handling such logistical issues and states that, in healthcare there will have to be understanding of the differences in technology requirements for addressing non-emergent health issues versus the needs of the chronically ill.

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Photo by NEC Corporation of America with Creative Commons license.