The Effects of Financial Incentives and Clinical Practice Guidelines on the Adoption of Virtual Care

This quantitative dominant mixed methods study examined the effect of financial incentives and clinical practice guidelines on the adoption of virtual care during the COVID-19 pandemic. A quantitative analysis of physician billing data was conducted, supplemented by key informant qualitative interviews which were used to inform analytic decisions and interpret the study findings. Using Practitioner Claims data from Alberta, Canada, a sample of 105,222 physician claims relating to hepatology practice were analyzed using generalized linear models with cluster-robust standard errors over three study periods: pre-pandemic, intra-pandemic and late-pandemic. The quantitative findings indicated that virtual care adoption differed substantially by study period, with remarkably higher use during the intra-pandemic period and sustained use above pre-pandemic levels in the late-pandemic period. Financial incentives were associated with slightly higher odds of virtual care use; however these effects were limited in shaping virtual care patterns. Financial incentives were not found to moderate the relationship between clinical practice guidelines and virtual care adoption. Qualitative insights suggested that clinical practice guidelines legitimized the adoption of virtual care modalities during the pandemic although guideline effects could not be independently isolated from broader pandemic-related policy and system-level shifts. Drawing from business model theory, the study situated financial incentives and clinical practice guidelines as business model components that influenced physician practice within the broader institutional and policy context. The study findings suggest that pandemic-related policy and system-level shifts were the dominant catalysts for the extensive adoption of virtual care, outweighing the influence of financial incentives alone. While virtual care adoption declined between the intra-pandemic and late-pandemic periods, sustained adoption was demonstrated in the late-pandemic period suggesting an emerging shift in clinical practice patterns. However, the durability and generalizability of this change is yet to be established. Recognizing the complex regulatory, institutional, and professional environments in which clinical practice occurs, and drawing from business model theory, this study demonstrated how two foundational and complementary business model mechanisms influenced virtual care adoption and highlighted the critical import of rethinking business models in response to changes in the healthcare business environment. The advancement of virtual care as a form of digital health innovation is a healthcare challenge that demands the design and governance of an organizational capability. This study makes several contributions including demonstrating that value capture mechanisms and legitimacy signals create a context for influencing virtual care adoption and providing evidence of the sustained increase in virtual care adoption in the late pandemic period suggesting an emerging shift in clinical practice.