How Telemedicine And Telehealth Are Improving Health While Cutting Costs

by Greg Cleary

I love hearing about the future of healthcare, even if it sometimes freaks me out. At the recent Workgroup for Electronic Data Interchange (WEDI) 24th Annual National Conference, discussions focused on health information exchange, data collection and emerging healthcare delivery models. At first glance, this appeared to be a standard techie conference with discussions on 834 file layouts and ICD-10 implementations. It turned out, however, to be a whirlwind of innovative discussions, stretching the minds of attendees to use different calculated models of change. Our new healthcare environment has a heavy push from regulators, C-suite executives and consumers to significantly reduce healthcare costs and improve health outcomes. Seemingly benign conversations about futuristic care models have morphed into discussions about evidence-based effects that technology like telemedicine/health have on improving care delivery, cutting costs, collecting health information through new devices, and aggregating information across payers, providers and physicians.

Tele-technologies are today’s reality. Growing sets of telemedicine services are reimbursed by Medicare and almost 90 percent of Medicaid programs and payers are seeing the benefits of implementing the right technologies for their organizations. United Health Group CEO, Stephen Hemsley, said that in an environment where every innovation in healthcare seems to add to costs, “telemedicine has a great future.” Hiliary Critchley of Optimity Advisors and Donald Graf of United Healthcare, teamed up at the WEDI conference to present important insights on the emerging use of these technologies, highlighting the factors healthcare organizations may want to consider when starting a program or expanding their existing programs.

Key Drivers

Having all players in an industry pushing for the same end results doesn’t hurt. Level setting our stage, Figure 1 shows key industry drivers that are increasing traction due to market forces and stakeholder dynamics.

Figure 1: Key Tele-technology Drivers

Market Expansion

The Centers for Medicare & Medicaid Services (CMS) announced in March that it will expand telemedicine coverage for the newly created “Next Generation ACOs.”

The federally funded State Innovation Model initiative, a creation of CMS, first awarded $300 million to 25 states to design and test "innovative healthcare payment and service delivery models". Round Two provided more than $660 million to 32 states/territories to both design and test these models.

In addition, 52 percent of large employers plan to cover telemedicine in 2015. The main attraction of telemedicine is its potential to save money and streamline healthcare access. Beyond cost savings, employers can also look to telemedicine to improve employee productivity and reduce absenteeism. Telemedicine visits tend to be less time-consuming than taking time off from work for routine doctor appointments.

A recent online survey of American consumers indicated that 64 percent of consumers are willing to have doctor visits via video telehealth.

Figure 2: Forecast of Patients Using Telehealth in the US

Understanding Stakeholder Risks

There are concerns around the adoption of telemedicine and mobile health programs from all participants in the field. A few of the major concerns are shown in the figure below.

Figure 3: Major Concerns with Adopting Telemedicine and Mobile Health Programs

 Telehealth Coverage by State

Forty-six states have some form of reimbursement for telehealth in their public program. Only three states currently do not have any written definitive reimbursement policies. Policies vary greatly from state to state. Additionally, strong HIPAA compliance measures need to be put in place to ensure telehealth sessions and/or patient data is not compromised.

Figure 4: American Telemedicine Association’s State-by-State Report Card

Defining Measureable Goals

Identifying and measuring results against a telemedicine program’s goals helps achieve the promise of improving quality and reducing costs. An organization may want to adopt specific technologies, processes and programs that have measureable impacts to:

  • Admission diversion and readmission reduction
  • Disease management
  • Case management
  • Utilization management
  • Health and wellness (patient education and engagement)
  • Expanding primary care services (nutritionist, care coordination, access to nurse practitioners for urgent care and follow-up)

Adopting Telemedicine/Mobile Health and Telehealth

Strategizing, planning and maximizing revenue gain through minimizing costs and increasing quality care lead to valued results. A critical consideration for an organization adopting telemedicine is a clear approach with a clear evaluation of environment factors for each unique situation. Clearly understanding best practices and nuances within specific markets or among populations is a good place to gain some external perspective and insight. Figure 5 shows critical factors to consider when planning a telemedicine/telehealth program.

Figure 5: Critical Planning Factors For Telemedicine/Telehealth Programs

Accelerating developments in the areas of telemedicine, telehealth and mobile health mean it won’t be long before I will be sitting at home, in front of my computer, catching up with my doctor, while my smart watch transmits data to her so she can take a look at the results from the ingestible capsule I took a few days prior. The future of healthcare may be closer than we think.

  Greg Cleary is a Senior Manager with Optimity Advisors with more than15 years experience in the healthcare industry specializing in payer operations and technical solutions.

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