While virtually every aspect of health reform is front-page news, there are demographic and technological changes underway in healthcare that rarely make headlines.
While ICD-10 and ACOs vie for health leaders’ attention, it’s easy to overlook the fact that the population is shrinking in many parts of the country. For example, there are now 57 counties in Michigan that are designated as rural – and many counties in the west meet the federal definition of “frontier,” with fewer than six residents per square mile. At the same time, many of our most medically underserved communities are in the heart of large cities.
But in areas both rural and urban, there have been steady upgrades in communication bandwidth and network speed.
The result is that telemedicine is now more cost-effective and strategically important than ever. CMS already reimburses for telemedicine consultations in communities experiencing physician shortages. And 19 states have enacted so-called telemedicine “parity” laws requiring remote consultations to be reimbursed identically to in-person visits. Another nine states are currently weighing similar legislation.
Acute care telemedicine is growing rapidly as more tertiary care hospitals establish relationships with smaller facilities on the edges of their service area. These healthcare systems are improving care and building market share by bringing medical expertise to communities that find it difficult to attract their own neurologists, cardiologists and other specialists. Thanks to telemedicine, the percentage of stroke patients able to receive timely tPA treatment in their own communities has increased ninefold in some service areas.
Growing list of benefits
Healthcare systems that launch state-of-the-art telemedicine networks can gain significant strategic advantage over competitors that don’t (or ones that offer only token connectivity). These advantages include:
- Providing high-quality care across a geographically sprawling service area – One leading telemedicine network is bringing telestroke services and more to rural sections of Idaho and Oregon, which span more square miles than all of Denmark, Belgium, the Netherlands, Switzerland and the U.K. combined.
- Rapid access to specialty care – By providing timely access to highly trained specialists, telemedicine offers patients in small town America the same caliber of care they’d receive in Boston or Chicago.
- Gaining market share and enhancing the hospital’s brand – A healthcare system’s reputation for quality grows every time a small-town patient receives life-saving treatment or greater access to specialty care. Researchers at the University of California Children’s Hospital in Sacramento recently reported that 16 northern California hospitals had gained market share and nearly doubled average annual hospital revenue by implementing telemedicine programs.
- Networks that are cost-effective and easily scalable – The first wave of telemedicine networks used the “bunker” methodology, requiring an expensive standalone center staffed by a dedicated team. That approach has been supplanted by the “hub and spoke” model, where outlying hospitals use robotic technology to connect quickly and cost-effectively with a tertiary care facility.
- Greater convenience for patients – Through telemedicine, far more patients can be treated in their local communities without the hassle of traveling to the hub hospital.
- Significant cost reduction – By treating more patients at community hospitals, one healthcare system has saved nearly $850,000 to date by reducing transport costs to the tertiary facility. That same network has also lowered the cost of a psychiatric ED visit from $1,300 in-person to about $100 using telemedicine. Some hospital systems are also using telemedicine to avoid having to create or expand entire departments like neonatology.
- Reducing hospital readmissions – Some healthcare systems are reporting dramatic reductions in hospital readmissions for serious conditions like congestive heart failure and stroke complications because patients can be remotely monitored by specialists, not just by a home health nurse.
- Preparing for new alliances and payment structures – By helping build a network of clinically aligned hospitals, telemedicine prepares a healthcare system for changing payment models and creates a foundation for building an ACO.
Ideal medium for collaborative care
The shift from the fee-for-service model to accountable care is also giving new impetus to telemedicine. Montana just passed a telemedicine parity law that makes remote consultations reimbursable not just at hospitals but at hospices, long-term care facilities and mental health centers. The Montana reimbursement coverage also extends far beyond physicians and nurses to include pharmacists, physician assistants and other caregivers.
Telemedicine also makes sense in states like New Jersey, which has no rural counties. For example, the Thomas Jefferson University Hospital telestroke network in Philadelphia includes a community hospital in Salem, N.J., an hour’s drive away. Stroke patients there can now rely on the expertise of the hub hospital without transport delays – and in stroke treatment, “time is brain.”
Telemedicine is gaining traction because it shares the long-term goals of health reform: improving quality and access while lowering costs. Since telemedicine is a stellar example of coordinated care at its finest, healthcare systems that harness its full potential can gain significant strategic advantage.
Rob Fisher is vice president of clinical services at InTouch Health in Santa Barbara, Calif.
