Guest post by Bill Fera, principal, Ernst & Young LLP.
Healthcare reform, the newly insured and a growing interest in population health management are accelerating the market’s interest in telehealth technologies and services. Healthcare providers are developing integrated strategies for adopting these technologies with the goal of extending capabilities and patient interactions beyond traditional care settings. As more payers and employers begin to pay for telehealth services, the value of these tools is coming into focus. Market analyst IHS predicts the US telehealth market will grow from $240 million in revenue in 2013 to $1.9 billion in 2018, an annual growth rate of more than 50 percent, according to Forbes. Keys to the anticipated surge are the current physician shortage, an expanded patient base under the Patient Protection and Affordable Care Act and an effort to put consumers at the center of their own care.
Overcoming the obstacles
Historically, the healthcare industry has proceeded carefully in the world of digital advancements. High investment costs and uncertain return on investment have created a tenuous economic model. Healthcare providers also face three other key obstacles: uncertain reimbursement, varied state licensing laws and the potential for breaches in privacy and security.
Navigating reimbursement challenges
Reimbursement for telehealth services varies widely. Medicare pays for some services, especially in remote rural areas, but the program has several restrictions. It generally covers only services delivered “real time,” through videoconferencing, as opposed to “anytime,” through store-and-forward technologies.
Medicaid is the most common route states are taking to implement their telehealth programs. The National Conference of State Legislatures (NCSL) notes that to date, 43 states and the District of Columbia provide some form of Medicaid reimbursement for telehealth services.
Private payers need to comply with state regulations. Currently, 19 states and the District of Columbia require private insurance plans in the state to cover telehealth services, according to the NCSL. Arizona will join this list in January 2015. Nontraditional payers for telehealth services range from charitable organizations, long-term care and community health providers to self-insured groups and agencies serving special populations.
Policies continue to evolve. Several bills are before Congress to establish a federal standard for telehealth, while Medicare’s 2014 physician fee schedule will expand coverage incrementally for telehealth services.
Complying with multiple state laws
Differing state policies raise the possibility of violating state licensing and prescribing laws. A physician who sees a patient through telehealth in another state must then comply with the local laws in the state where the patient is located. With varied laws in 50 states, physicians need to consider multiple compliance requirements and follow current and pending legislation in the states in which they practice.
Maintaining privacy and security
With its electronic transmission of sensitive patient data, telehealth opens the door to potential privacy and security breaches. Federal legislation requires that healthcare organizations secure their data from all “reasonably anticipated threats.” Telehealth programs need to be implemented in a way that establishes rigorous security measures for reducing risks of telehealth data breaches — from data transmission that may be intercepted by third parties to the risk of information technology support staff or other personnel becoming party to a videoconferencing session. Also, data temporarily stored on telehealth devices, such as digital diagnostic tools, needs to be protected adequately from security risks.
Pursuing the opportunities
In addressing these challenges, providers can begin to evaluate the many opportunities offered by a sustainable telehealth program. A sound plan considers three overlapping and mutually reinforcing channels for market engagement — patients, providers and communities — all of which are enabled by infrastructure synergies. Real time and anytime technologies, along with digital communication media, offer approaches that can be applied across channels, establishing stronger market penetration and economics. Telehealth programs are more likely to succeed when they integrate appropriate services across channels to build multi-faceted relationships with patients, referring physicians and health system partners.
Patients: clinical services
From e-visits to at-a-distance monitoring and consultation, telehealth technologies extend the traditional practice of medicine to remote patients — at a cost far below that of visits to a physician, emergency department or urgent care center. These “virtual house calls” are particularly critical for patients who live in rural and underserved areas. And, for patients with chronic diseases, home-based monitoring devices can easily capture and transmit over the internet clinical data, such as blood pressure or glucose levels, helping to prevent avoidable hospitalizations and support patients in managing their health.
Providers: physician referrals and consultations
For providers, e-consults are enabled by store-and-forward technologies that electronically transmit prerecorded videos and digital images between primary care providers and medical specialists. Health professionals can consult and collaborate virtually with patients and other clinicians, regardless of geographic location. The result is a cost-effective alternative to physician office visits, increasing provider caseloads without increasing their workloads. Such remote monitoring services as the e-ICU provide real-time alerts and notifications that can significantly improve patient outcomes while reducing resource use, while other services, such as e-trauma, can extend clinical knowledge to remote locations to inform critical decision-making.
Communities: digital communication
For communities, telehealth leverages pervasive technologies to enable cost-effective, timely communications among patients and providers. These may include patient portals to provide advice and answer questions, internet-based clinical content delivered to patients through emails and links to support patient education, or social media to offer lifestyle guidance tailored to disease management groups.
The point of intersection: infrastructure synergies
All three channels are catalyzed by a robust infrastructure — providing connectivity with electronic health records and enabling communications among care facilities, referring physicians and patients. They also provide the link to population-based management databases and other healthcare analytic functions to measure value in the form of the “Triple Aim” metrics: better care for individuals, better health for populations and lower costs for healthcare overall.
Moving into the future
The time for telehealth is now. As the nation moves from uncoordinated, volume-based delivery of health services to an integrated, patient-centric, value-based model, the industry’s future will hinge on its ability to achieve higher-quality care, improved patient outcomes and lower costs. In enabling healthcare organizations to operate more efficiently and cost effectively — and deliver the care patients need where and when they need it — telehealth programs are an important part of the strategy to achieve these goals.
Bill Fera, MD is a Principal in Ernst & Young LLP’s Advisory Health Care practice and is based in Pittsburgh, Penn. Follow Bill on Twitter: @BillFeraEY