The Telehealth Panacea


The increasing cost of healthcare and widening gap in coverage has caused lawmakers and health service providers to explore cost-effective strategies for service delivery.

Telemedicine may be the panacea that could address this gap, as more experts arrive at the consensus that widespread implementation would improve healthcare and save the U.S. system up to $4.2 billion by reducing transportation costs.

Bridging the Gap

The current healthcare delivery system presents a wide range of problems related to physician availability and access to medical care – an estimated one in four people complain of having difficulty taking time off work to see their primary care physician.

Often, when patients do get to consult, around 60% say they have difficulty obtaining all the medical information they need during office visits because they forget to ask questions and more than one-third of physicians simply do not have the time to explain everything to them.

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Doctors also rarely consult by telephone or e-mail, especially after hours, so questions remain unanswered until the next office visit or when the patient decides to consult in the Emergency Department (ED). Consequently, patients tend to overuse the ED, with more than half of ED consults involving non-emergent health concerns.

Add to this the imbalance of doctors and specialists practicing in metropolitan areas compared to rural areas, encumbering patients with considerable travel expenditures. This is particularly taxing for the chronically ill, who require complex and expensive long-term monitoring and treatment strategies.

Telehealth offers innovative solutions to address these inherent frailties in the current healthcare infrastructure. A concept started in the 1950s, newer technologies have rapidly grown the field of telemedicine, allowing it to provide a wide array of services from real-time guidance in diagnosis to remote monitoring programs.

“Telehealth” is often used interchangeably with “telemedicine,” but strictly speaking, “telehealth” is a broad term that refers to the use of technology to provide healthcare and/or health information, particularly to patients living in distant areas; “telemedicine” refers to the provision of medical services only. 48 states have legal definitions for both terms stipulated in policy or law.

In some of these states, the use of email, phone or fax is excluded in the definition, but for all intents and purposes, telemedicine or telehealth is taken to mean provision of health-related services when the patient and the provider are in different geographic locations – with a designated “originating site” and “distant site.” Several communication tools may be used to convey medical information and the exchange may be done synchronously or asynchronously.

The interactive consultation is akin to an office consultation, consisting of a two-way video and audio exchange between the physician and patient and real-time evaluation and management. An asynchronous consultation involves the transmission of medical information via an electronic medical record – this has been found most useful in radiologic and dermatologic evaluations and for remotely monitoring chronically ill patients.

Telehealth & Cost Savings

The majority of savings from telehealth service delivery are expected to come from reducing expenditures for unnecessary ED visits and diagnostic tests. The latter is wrought by fragmented care, particularly in chronically ill patients. Telehealth offers an avenue for collaboration among multiple providers, centralizing all available patient data and diagnostic test results, reducing repeated tests and optimizing the use of scarce clinical resources.

While establishing a national telehealth program would entail significant investment – with returns commencing only on the fourth year of implementation at the earliest – by the sixth year of implementation it is estimated that a steady state in the cost-benefit ratio can be achieved. Expected savings in succeeding years include a 38% decrease in transport costs from one ED to another, a 14% in transport costs from nursing homes to the ED and a 68% decrease from transfers to doctors’ clinics.

Including $3.61 billion in savings from minimizing overlapping diagnostic tests, a net annual savings of up to $4.28 billion is projected within six to ten years of implementation of telehealth care provision.

Hurdles and Roadblocks

Despite the success of pilot programs in various states, key barriers other than limited reimbursement include resistance from healthcare providers to venture beyond traditional in-person consultations, qualms about liabilities in performing telehealth medical interventions and current state laws and regulations preventing doctors from providing medical care.

Limited reimbursements have thwarted telehealth expansion for several years now, although recent reforms in reimbursement policies offer hope. Medicare covers some telehealth services – with stringent specifications. Medicare will only reimburse telehealth services if the “originating site” (where the patient is located) is within a “Health Professional Shortage Area” and is a medical facility.

Also, Medicare covers only real-time, face-to-face doctor-patient services. Medicaid, on the other hand, being the most common route by which states have chosen to address telehealth funding, spends for telehealth services in up to 43 states. Reimbursement standards for Medicaid differ across states, however and there is no single standard for private insurer reimbursements for telehealth expenses.

Ensuring Sustainability

The issue of national telehealth implementation is multifaceted and requires creative solutions. It necessitates state support through legislation and policies that will standardize Medicare and Medicaid reimbursements and encourage comprehensive reimbursement coverage from private insurers and employers’ health plans.

With the current state of affairs, healthcare providers will mostly likely bear much of the initial financial impact of moving towards telehealth, but cost sharing initiatives between states and local health providers would expedite the process.

The states must also review their regulations on licensing limitations among healthcare providers across state lines. Rules addressing the gray area of applying telehealth strategies to two different states (with their own respective licensing and prescribing laws) must be thoroughly ascertained.

Telehealth is a cost-effective healthcare solution. Various states have already seen it work, and it’s time that the rest of America see it, too.

Richard Kimball, Jr. is the co-founder and CEO of HEXL, Inc.

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