In this article, I will discuss how our approach to virtual care was developed, sustained, and optimized. However, before diving into the specifics, it is essential to understand the funding model that has enabled our success—full-risk capitation.
Understanding Full-Risk Capitation.
ChenMed operates under a full-risk, value-based care model, also known as full-risk capitation. This payment structure involves a partnership between a healthcare provider and a private insurer or Medicare. Unlike traditional fee-for-service models where providers are reimbursed per visit or procedure, full-risk capitation places financial responsibility on the healthcare provider. This means that ChenMed, rather than the insurer, covers the cost of all preventive, specialty, and emergency care for its patients.
The “risk” in this model comes from the provider’s responsibility to manage patients’ health effectively. If patients require extensive medical interventions or emergency care, the provider absorbs the costs. However, if the provider successfully helps patients maintain their health and manage chronic conditions—thereby preventing expensive hospitalizations—the resulting savings are retained. This creates a strong incentive to prioritize preventive care and proactive management, ensuring better health outcomes while reducing overall healthcare costs.
At ChenMed, the financial incentive to keep patients happy, healthy, and out of the hospital has fostered a culture of innovation.
How Full-Risk Capitation Enabled a Smooth Transition to Telehealth.
ChenMed’s payment model played a crucial role in our swift and efficient adoption of telehealth. Unlike fee-for-service providers who faced uncertainty regarding reimbursement for virtual visits, we had the financial flexibility to shift to telehealth without disruption. Since our compensation structure remained the same regardless of visit type, we were able to invest in and implement virtual care solutions without hesitation.
Our approach to telehealth was designed to maintain the high-touch, patient-centered experience our patients were accustomed to. Before their virtual appointments, patients received a call from a front-desk staff member, confirming their upcoming visit and providing essential instructions—such as ensuring a quiet, private space and having vital signs-recording devices on hand. Shortly before the appointment, a care promoter (as we refer to them at ChenMed) sent a secure, HIPAA-compliant video link, allowing patients to connect with their doctor in a private virtual exam room. This process ensured that, even from their homes, patients received the same level of personalized care and attention as they would in a clinic.
Fostering a Culture of Innovation in Patient Care.
At ChenMed, our financial model directly supports a culture of continuous innovation aimed at keeping patients healthy and out of the hospital. This focus on proactive care allows us to prioritize patient well-being rather than react to illnesses after they occur.
Although in-person visits have resumed, the healthcare industry is now grappling with the future of technology-assisted care. We have seen a dramatic shift from nearly 100% in-person visits to a hybrid model, with virtual care accounting for nearly half of all interactions. The exact balance between telehealth and traditional visits remains uncertain, but one thing is clear—convenience has become a key value in healthcare.
Patient feedback confirms that many prefer virtual visits over the traditional model, which often involved hours of travel for a brief in-person consultation. Moving forward, our priority at ChenMed will be to align with our patients’ preferences and needs, ensuring they receive care at the appropriate level and through the most effective channels. The lessons learned over the past two years, combined with our commitment to leveraging technology, will guide our continued efforts to enhance patient-centered care.
