Telemedicine Demand Dramatically Increasing

Healthcare and diagnsotic applications voracious bandwidth users

Telemedicine
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In rural areas of the country, telemedicine is about a doctor providing remote health care to people regardless of where they live, or a pharmacy electronically filling a prescription for a patient sitting in a doctor's office.  Access to the health care system is the same for patients in both rural and urban areas.  For a hospital, physician or healthcare provider in an urban setting, the focus is generally centered on economics.

The cost savings when a fully automated electronic medical records (EMR) system is implemented is significant.  Combined with human resource savings, and better patient outcomes, it is no wonder hospitals and doctors alike are aggressively pursuing this option. 

According to the 2016 U.S. Telemedicine Industry Benchmark Survey conducted by REACH Health, an increasing number of healthcare facilities are making telemedicine initiatives a priority at their institutions. The survey respondents for the survey includes 390 healthcare executives, physicians, nurses and other professionals throughout the United States.

The Main Findings of the REACH Survey Include:

  • Telemedicine continues to evolve from a specialty offering to a mainstream service. Nearly two-thirds of survey participants noted telemedicine as their top priority or one of their highest priorities for their healthcare organizations.
  • Patient-oriented objectives including improving patient outcomes, improving patient convenience and increasing patient engagement and satisfaction occupy the top three positions as the most common objectives for telemedicine programs.
  • Although “Improving Financial Return” ranks in the bottom third of telemedicine objectives, topping the list of return on investment (ROI) drivers is “Improved Patient Satisfaction,” which is also one of the top three objectives. This seems to indicate that patient satisfaction is recognized for driving increased ROI, but the primary motives for improving satisfaction may not be financially driven.

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    According to another recently released report entitled Global Telemedicine Market Outlook to 2018, the global telemedicine market ($14.2 billion in 2012), is expected to grow at a compound annual growth rate (CAGR) of 18.5 percent during 2012-2018.  According to the report released by the business research and consultancy firm RNCOS:

    "The deployment of telemedicine services is galloping with continuous development of telecommunication. The shortage of physicians in rural and remote areas provides opportunity for telemedicine to increase its services to millions of patients and this widespread deployment of services will continue at a rapid pace in future as well. The increase in telemedicine applications are surging due to high prevalence of chronic diseases, consistent need for improved quality services and rising elderly population across countries which thereby urge telemedicine to deliver improved products with higher patient satisfaction."

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    Also driving the bandwidth demand for healthcare is the availability of federal and state funding for electronic medical records (EMR). As a result, many healthcare facilities are connecting medical centers, doctor's offices and pharmacies to high speed Internet connections at a rapid pace.  The availability of funding to support both the high-speed connection to deliver telemedicine services, and the infrastructure to support these applications, the capital required to implement services such as electronic heath records, remote imaging, or telemedicine services is greatly diminished.  

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    There are multiple benefits of telemedicine programs, including the conversion to electronic medical records, and the use of video conferencing for virtual examinations by physicians.

     Healthcare analysts estimate that the widespread use of electronic health records could save $80 billion annually. In addition, medical errors would also be dramatically reduce because of the benefits of automated applications such as e-prescribing which increase the accuracy of a healthcare practitioner's care.

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    Other benefits which are often cited as major benefits to support the utilization of broadband for the healthcare community are the ability to extend the geographic reach of healthcare and access to specialists to rural and remote areas. Many studies cite significant differences between the quality of healthcare available in rural and urban areas. Broadband facilitates video consultations, exchange of diagnostic imaging, and remote monitoring. All of these applications bring specialists from anywhere in the country (or the world) to rural areas where healthcare is limited.

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    To understand the potential impact of telemedicine on healthcare, the statistics are compelling.  With rapidly increasing costs, a shortage of primary health care providers, and an aging population in America, broadband facilitates a more efficient and less costly form of healthcare delivery.  Healthcare costs in the United States continue to rise and are straining available resources. These are the staggering statistics cited by industry experts:

    • The cost of healthcare services is expected to rise 7.5 percent in 2013, more than three times the projected rates for inflation and economic growth.
    • In 2010, the World Bank reported that healthcare costs reached 17.9% of U.S. Gross Domestic Product (“GDP”)2 and is expected to reach 20% of the U.S. GDP by 2021.
    • In 2011, the average annual premium for employer-sponsored health insurance was $5,429 for single coverage—up 8% from 2010 —and $15,073 for family coverage — up 9% from 2010.

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      • According to the U.S. Dept. of Health & Human Services ("HHS"), growth in national health expenditures is expected to average 6.1 percent per year between 2009 and 2019.5 The health share of GDP is projected to reach 19.3 percent by 2019.
      • Spending on Medicare and Medicaid is projected to average 6.9 and 7.9 percent, respectively, per year through 2019.
      • Overall, real per person spending on healthcare has risen by 40 percent in the past decade.
      • As of July 2011, nearly 20 percent of rural residents considered themselves to be in only “fair” or “poor” health.
      • It is estimated that healthcare coverage costs for people with a chronic condition top $6,000 annually - 5 times higher than those without.
      • By 2025, chronic diseases will affect half of the U.S. population, an estimated 164 million Americans.

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      • A shortage of healthcare professionals threatens to place additional strain on the healthcare system.
      • According to the American Academy of Family Physicians (AAFP), the number of U.S. medical school students entering primary care has decreased by nearly 52 percent since 1997.
      • Only half of the needed number of physicians is currently entering the field. HHS predicts that healthcare staffing shortages will increase significantly after 2014, when 32 million more Americans become insured as mandated by the federal healthcare reform law.
      • AAFP predicts a shortage of about 40,000 physicians by 2020.
      • A shortage of nurses is also impacting the system. According to one study, 46 percent of nurses report that the shortage is decreasing the amount of time they can spend with their patients.

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      With insurance reimbursement being one of the most significant barriers of entry for telemedicine, what is the current state of insurance reimbursement for telehealth related services?  Healthcare policy and insurance reimbursement issues are generally regulated at the state level.  According to a 50 State Telemedicine Analysis published in May, 2015 by Latoya Thomas and Gary Capistrant, most states allow some sort of reimbursement for telemedicine service. The extent to which reimbursement is available and the policies which regulate telemedicine is directly related to doctors adopting and embracing the practice of telehealth.   This is where state policies vary widely.  Only five states received a grade of 'A', with most states receiving a 'B.'  Another 13 states received a 'C' and two states received a failing grade ('F').

      The study authors used 13 different indicators to assess each state's score, with Connecticut and Rhode Island receiving the two failing grades.

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      The REACH survey also queried respondents regarding barriers of entry.  According to the findings cited by REACH, issues regarding reimbursement and EMR systems pose the top impediments to telemedicine, accounting for "six of the top seven challenges."

      • Reimbursement, both government and private, poses the primary obstacle to success. Even when effective mitigation of challenges is taken into account, reimbursement continues to present the most formidable obstacle.
      • Persistent challenges related to EMR systems were also widely noted in the survey. These include the lack of integration between telemedicine and EMR systems and lack of native telemedicine capabilities in EMR systems. Also noted were challenges posed by the use of multiple EMR systems in heterogeneous telemedicine networks.

      According to Steve McGraw, President and CEO of REACH Health:

      “Telemedicine decision-making is rapidly moving from individual departments and specialties to an enterprise initiative. Both hospitals and health systems reported significant increases in the average number of telemedicine service lines which are active or being implemented in concert.”

      As hospitals and healthcare facilities continue to see the tremendous cost savings associated with the implementation of telemedicine initiatives, adoption of electronic medical records and remote telemedicine will increase.  This will challenge state and federal lawmakers who will need to keep up with legislation to both protect patients and facilitate efficient healthcare delivery.