Private telehealth platform growth is changing system dynamics quickly

10 minute read


Letting the single-indication non-Medicare telehealth platforms develop standards and regulation for GP telehealth is an obviously flawed idea.


If you are wondering just how fast the non-Medicare telehealth platforms are growing – still largely outside the purview of the government regulators whose power largely is drawn from Medicare – a good indication came a month or so back when the group running our government-mandated electronic prescription platform (eRx) decided it could no longer afford to run private scripts on its platform for free, and introduced a 15c transaction charge for every private script.

eRx, run by FRED IT, which is now fully owned by Telstra Health, was contracted by the government two years ago, for about $26 million per year, to transact all MBS electronic scripts (it’s a four-year contract).

Private scripts weren’t technically part of the deal, but at the time, eRx didn’t care, and had agreed – loosely we guess – to process the private scripts for nothing.

The government didn’t seem to care because the government was only concerned with Medicare-rebated scripts. Or so we thought.

In what appeared to be very messy and illogical process at the time, not that long after they awarded the contract for MBS scripts to eRx, the government decided to shut down the losing tenderer for the government contract – Medisecure – which had managed to work out a way to survive on processing private scripts only.

After that eRx owned the whole show – hence, the idea of a government-mandated monopoly.

At the time no one could quite work out why the government forced the closure of Medisecure if it wasn’t so concerned about the private script market and private scripts were being processed for free.

But it looks like it was thinking ahead. The government saw a time in the future when it would want much better oversight or even control over the private script market.

Either that or we’re giving it way too much credit.

When FRED IT announced its decision to charge for private electronic scripts in May, it said that the eRx Script Exchange had seen a 60% increase in prescribing of private prescriptions over the previous18 months to the point where private scripts now comprised 25% of the entire market.

At the moment, when you look at the plans of groups like Wesfarmers (InstantScripts), Eucalyptus, Mosh, NIB, Medibank, and the vertically integrated medicinal cannabis platforms, you’ve got to think that this wild growth is probably set to get wilder, not more settled, over the next few years.

The implications of such growth for the healthcare system are big in a few ways.

For one thing, the well-heeled patient is entirely capable of paying, and they will for convenience.

That turns a lot of ideas about how the system works upside down in some ways and must be making people think a little about who pays, access and equity.

One thing it should make the government think a bit more carefully about is trying to force bulk-billing rates up in a uniform way, as it has with its recent election promise.

Obviously if you make it convenient, the rich will pay. But access and equity then start becoming a big problem if you design it the wrong way.

As a previous president of the RACGP commented a few weeks ago at our Health Services Daily health leaders summit in Canberra, a reasonable chunk of patients can, and should, pay more to go to a GP than the Medicare rebate, so long as you can make sure those that can’t afford it don’t somehow end up as second-class citizens – that’s if they’re not already second-class citizens, of course.

All this non-Medicare growth is a fascinating dynamic that you suspect the government now has a keen eye on, probably with a view to bringing it all into the same tent Medicare sits in somehow so the government doesn’t lose control of the health system to the privateers and the rich.

Why then has the government so far done nothing – well, not much – about trying to co-ordinate universal standards and regulations in Australia for telehealth? Most of that private script growth is, after all, being driven by the private telehealth platforms.

This week the People’s Front of Judea vs The Judean People’s Front Monty Python skit came immediately to mind when  the news came out that the Australian Telehealth Standards Consortium was being established, which was not to be confused with the the Telehealth Sector Working Group which was only established less than a month ago.

Why are two competing private platform telehealth providers suddenly fighting for the high moral ground of first to establish good governance and standards in Australia for telehealth?

And given the vital role that telehealth plays now with Medicare-based GP, allied health – especially mental health – and specialist providers across the country, and the potential for this vital arm of access and delivery to help the system migrate its focus to better chronic care management in the community, especially in rural settings, why is the government sitting back and tolerating what is going on?

Answer to the first question: all of these providers have at one stage or another pushed the limits of safety and governance in health in ways which the government can’t continue to tolerate and probably won’t.

So, they are trying to market themselves to the government and to the patient community as responsible people.

Are they, though?

It’s a moving feast and it’s hard to keep up sometimes.

Once the single-platform weight-loss providers such as Eucalyptus were being outright cowboys in how they were prescribing their weight-loss drugs.

Several groups doctor-shopped them (patient-shopped), including us, and it was clear only two years ago that anyone could get an Ozempic script, using text only, answering questions that the platform claimed came from a doctor.

In our case an under 25 BMI male got a prescription for an apparently overweight female (no photo, not directly talking to a doctor on the phone or video, no Medicare card, no actual patient identifier).

To be clear, Eucalyptus doesn’t do this now. Now they’ve got pretty strict governance and monitoring of what is actually going on.

But the fact that they thought it was okay to do it once and were either that naïve about healthcare safety, or that cynical about getting a revenue stream rolling for their investors to prove their model out, is a big and ongoing worry for any service that sits at least partly outside government reach by sitting outside of Medicare.

The modern-day version of what the weight-loss platforms once did is what the medicinal cannabis platforms are doing now.

AHPRA and the medical board introduced new guidance on medicinal cannabis this week, after revelations that eight practitioners wrote more than 10,000 cannabis scripts each within a six-month timespan and a single nurse practitioner allegedly issued up to 31,000 scripts over that period.

All those scripts are being written by practitioners working for telehealth platforms that decided a month ago that they’d form a new group to oversee governance and regulation in Australian telehealth.

Further, the main group driving the formation of the group, Montu, has and is currently in a lot of hot water with AHPRA over misrepresenting its position to the public.

It is alleged by AHPRA that Montu and Alternaleaf unlawfully advertised medicinal cannabis implying that medicinal cannabis had been approved or recommended by the TGA, representing medicinal cannabis to be safe or without harm or side effects, and even, magical or miraculous.

Does that sound like a group you’d want making standards and regulations which will govern safety around patients getting drugs off telehealth platforms?

Then, somewhat bizarrely this week, but in line with its new role as responsible and ethical providers of telehealth services, Montu came out and strongly endorsed AHPRA’s new guidance which is aimed at reinforcing the importance of clinical integrity and patient safety in medicinal cannabis prescribing.

“We have consistently called for stronger safeguards around prescribing including the appropriate use of Schedule 8 controls, real-time prescription monitoring, and prescribing practices that prioritise therapeutic need over commercial convenience,” said Jodie Thomas, vice-president of corporate affairs and patient advocacy at Montu.

“Our clinical standards have long reflected the core principles AHPRA has outlined: longer consultations, mental health and substance use assessments, clinician education, and clear protocols to prevent early repeats or product oversupply.”

Hmmmm … is that right?

It has the distinct whiff of some wily old foxes wanting to make the standards and regulations on how you build that chicken house.

Eucalyptus and the new group it is associated with has, we have to say, been a lot more careful and serious about developing standards and regulations. It realised a long time ago that it needed to be a lot more upright and serious about this stuff or it would fall off some sort of regulatory cliff eventually.

But it’s still a fox – albeit a more genuine and well-meaning fox in the case of the Australian Telehealth Standards Consortium. At least this consortium rang the RACGP and asked if it could help. For reasons we aren’t clear about yet, the RACGP agreed.

So where are we?

Twenty-five percent of electronic scripts are now private and that number might go to 40% within a few years. Much of this growth is being driven by single-indication platform providers.

By the way, that there is so much growth from these providers goes to the argument you will get from Eucalyptus and others in the private market: “the demand is there, don’t kill us for coming to the party and meeting it”.

They are in essence giving patients what they want … another interesting aspect of the market dynamic that the Medicare providers don’t seem to be contemplating in their business models well enough yet.

The private market platforms do have a point, one the government, and I guess bricks-and-mortar GPs, need to think a lot more carefully about moving forward.

Guess how much of the total Medicare GP consults market telehealth makes up? You guessed it – about 25%.

Unlike private telehealth consults, public ones aren’t really growing, but overall it’s still much bigger, which is one of a few reasons AHPRA and the MBA need to get going themselves on standards and regulations.

The private electronic script market and the MBS stats aren’t exactly comparable because electronic scripts only represent about 23% (and growing fast) of the entire scripts being generated.

But in relative terms it’s giving us a picture.

One argument you get about the private providers doing all the standards and regulation work is that private scripts are quintessentially a different game.

It’s not.

It’s different but that’s all the more reason that AHPRA and the Medical Board need to now move more quickly and oversee the whole telehealth sector. Harmonisation between public and private telehealth is going to be hugely important to getting access and equity right and it will probably end up throwing up some good ideas on productivity as well.

So, I guess that means the Romans (AHPRA and the MBA) need to get their skates on and bring a bit of singular law and order to the entire realm of telehealth.

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