Contrary to what many people think, virtual health care, also known as telemedicine or telehealth, is much more than a cheap digital knockoff of in-person care. When used appropriately, it improves patient health, reduces costs, and makes care more equitable and accessible to anyone with a smartphone. Its use has soared during the Covid era--and the authors argue that providers around the world should aggressively strive to tap its full potential even after the pandemic abates. Pearl and Wayling take readers inside Kaiser Permanente and Intermountain Healthcare, two of telehealth's earliest adopters and most effective users in the United States. They show how telehealth can reduce expensive and unnecessary trips to the ER, reduce America's chronic-disease crisis, address disparities in care, make specialty care faster and more efficient, and provide access to the best doctors. And they outline what's needed to spur adoption to a fully telehealth-driven system. Employers, who currently provide health insurance coverage to nearly half the U.S. population, could drive such a change by banding together and designing new reimbursement and care delivery approaches. The resulting savings could amount to tens of billions of dollars a year.

Discussions about reining in health care costs invariably turn to the sickest 5% of the population, who account for 50% of all health care spending. Most of these patients have multiple chronic conditions, and the hope is that through disease-management programs that use registered nurses and social workers to monitor and help them, we can care for them better and achieve big savings. But these programs are expensive. Typically each focuses on just one disease, which means that many patients deal with multiple teams. The programs also operate outside primary-care practices, so they often duplicate doctors' work as well. And in the experience of the authors, the former CEO and associate executive director of Kaiser Permanente (KP), they do not reduce net costs. KP has come up with a better approach: providing coaching and support to patients through IT and inexpensive assistants who are integrated into primary-care practices--avoiding duplication. KP applies it judiciously, focusing only on patients whose chronic conditions can truly be improved (about a third of the most expensive 5%). This strategy has not only led to better medical outcomes but cut costs so much that KP has been able to lower premiums for millions of members by 10% to 15%.

Richard Townsend has recently been elected CEO of Liberty Medical Foundation (LMF), a nonprofit HMO. Due in part to a rapidly changing competitive environment, LMF has faced serious financial problems over the past two years. Confounding the problem are low morale among physicians and staff and declining patient satisfaction. Townsend will present to the board of directors the two strategic choices that he sees for keeping LMF alive. One choice involves LMF regaining its low-cost position that originally attracted so many of its members. LMF's low-cost, high-efficiency positioning has historically been its competitive advantage. Regaining the low-cost position would mean implementing prior authorization requirements, drastically cutting the number of physicians and staff, and copying other cost savings measures that for-profit HMOs use. The other option is to change radically LMF's positioning so that it is the quality and service leader. This option assumes that customers will be willing to pay a premium for excellent service. Either option will require drastic changes to LMF's culture.

What impact could information technology have on the problems affecting health care in the United States? It seemed that IT would have a fast impact on improving transaction processing (reducing costs), improving the accuracy of diagnoses and treatment (improving quality), and improving the availability of care in some instances. But what had to happen for IT to play a more significant role in health care today and in the future? What forces had to come to bear, what structural and cultural changes were necessary for this? Were there examples of a successful implementation of IT systems in health care today? If so, what was the impact of their investments?

In 1999, Richard Townsend, M.D. was the newly appointed executive director (CEO) of the Liberty Medical Foundation (LMF). Townsend was responsible for both the Liberty Medical Group (LMG), a large, 3,000 physician multispecialty medical group that provided health care to two million subscribers, and the Liberty Medical Plan (LMP), a nonprofit insurance company. This was his first official meeting as CEO with the board of directors and a critical one. In it, he would formally present to the board his strategy for the struggling LMF. Townsend believed that Liberty faced a stark strategic choice: either dramatically lower its rates through cost cutting to become a cost leader once again or to differentiate itself by building a reputation for both quality and service. The first option would require them to re-establish a price advantage by reducing the cost structure by 10% to 15%. This tact would almost certainly entail layoffs and salary reductions. The second option would be to raise rates and rely on a service, access, and quality strategy.