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Will Telemedicine Really Lower Costs?

I was talking with the mobile health lead at one of the large telcom providers recently and we had a good discussion about telemedicine and its possible impact for good or bad on healthcare. She asked a really good question, “Will telemedicine lower the cost of healthcare or just add new touch points?

The translation to that question is whether telemedicine will replace other healthcare costs or if it will just create new healthcare costs that never existed before. I should say that her feeling was that telemedicine would end up lowering costs, but the question is well worth asking. In fact, even if the answer is that telemedicine will lower healthcare costs, there are many on the payer side of the equation that aren’t as confident.

The reality is that a telemedicine visit likely could raise costs. The idea of having to uproot yourself, go to the doctors office, wait in the waiting room, wait in the exam room, etc is a really big deterrent that stops many of us from going to the doctors. The idea that I could click on a link and see a doctor from the comfort of my own home with no wait times (or at least I’m waiting at home where I can get other things done) will definitely cause us to see the doctor more often.

This means that the real question isn’t whether telemedicine will increase the number of visits to the doctor (and more visits equals more costs). Let’s assume that we do see the doctor more often in a telemedicine enabled world. This then begs the question of whether these extra visits will reduce the long term costs of healthcare.

Using our assumptions above, it suggests that we’ll visit the doctor earlier under telemedicine than we would today. Could these early visits catch a disease earlier? Could these early visits avoid a hospitalization or other expensive healthcare cost? Could early treatment of an issue prevent someone from having a visit (or dozens of visits) later? Looking at it from a different angle, can telemedicine make a doctor more efficient?

This impact won’t likely happen immediately, but is the long term hope of what telemedicine can become and how it could lower healthcare costs. I personally lean towards telemedicine being able to realize these goals. Although, we won’t know until we figure out the way to reimburse a doctor for a telemedicine visit. Not to mention overcoming the physician licensing issues with telemedicine. Each of those will happen though and then we’ll really know if telemedicine lowers the costs of healthcare or not.

May 21, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 6000 articles with John having written over 3000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 14 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John launched two new companies: InfluentialNetworks.com and Physia.com, and is an advisor to docBeat. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and Google Plus. Healthcare Scene can be found on Google+ as well.

New Telemedicine Stats Bode Well for EMRs

With the recent projection that telemedicine will reach 1.8 million patients worldwide by 2017, I think it’s fitting to continue the discussion I started last week pertaining to the current ROI of EMRs. While current utilization based on scrambling to meet Meaningful Use for federal incentives may not be all it’s cracked up to be, I do believe EMRs will ultimately provide a fiscally sensible return on investment, especially if telemedicine technology becomes part of any given vendor’s standard EMR package/offering.

I decided to bounce the idea off Sande Olson, a Twitter friend (@sandeolson) and Senior Healthcare Consultant at Olson & Associates. Being a healthcare professional that has worked in telemedicine long enough to witness its evolution, Olson seemed a fitting expert to speak with on the subject of EMRs, telemedicine and the bottom line.

How have you seen the telemedicine landscape change over the last few years?
Olson: Until recently, telemedicine has been a niche industry. Early users recognized the potential value of telemedicine, but successful business models (showing a viable ROI) didn’t exist, and technology was costly. The challenge was reimbursement; who was going to pay for it?  Without reimbursement or a viable business model, telemedicine could not go viral.

The telemedicine landscape began to change with advancements in information and communication technology on the heels of The Affordable Care Act. The push for healthcare reform provided financial incentives to “nudge” healthcare providers towards EMRs. Reform mandates and the availability of government funding created new opportunities around technology. Telemedicine, a valuable if fledgling technology, became a buzzword around technology and healthcare reform.

Industries saw business opportunity as solution providers for an “industry poised to undergo radical change.” Entrepreneurs, inventors, investors and healthcare visionaries followed new and sometimes disruptive ideas. Care delivery tools moved from PCs to tablets, along with mobile apps.

The confluence of all these influencers is creating a potential tipping point for telemedicine; it only needs wider reimbursement and licensure portability. Our aging population and forecasted physician shortage will help continue to thrust telemedicine into the forefront of change. Telemedicine is already being used successfully; reimbursement is still a challenge. But, healthcare innovation is just getting started. We have challenging times ahead, but this is also the most exciting time to be in healthcare ever!

Do you think there’s been a trickle down effect from the Affordable Care Act in terms of increasing interest in and adoption of telemedicine?
There has been a trickle-down effect on telemedicine. The Affordable Care Act has increased interest in exploring the possibilities of telemedicine outside of previous niche markets. As I noted, it is the confluence of influencers around healthcare reform that continues to push the tipping point for telemedicine.

Do you think EMRs will prove their worth in the coming years by better facilitating more novel methods of healthcare delivery, like telemedicine, or integrating with consumer-friendly mobile health apps?
Will EMRs prove their worth? Well, data silos do not support healthcare’s philosophy of providing a continuum of care from cradle to grave. And, you cannot provide care without a medical record; you can’t measure outcomes. So, interoperability– across all silos– is critical to successful healthcare reform. EMRs today may fall a bit short, but they will create efficiencies and improve patient outcomes. They will get simpler to use. EMRs will assist in improving reimbursement and revenue cycles. And, future EMRs will push and pull data from HIEs, PHRs and mobile health apps; we are just not there yet.

January 24, 2013 I Written By

As Social Marketing Director at Billian, Jennifer Dennard is responsible for the continuing development and implementation of the company's social media strategies for Billian's HealthDATA and Porter Research. She is a regular contributor to a number of healthcare blogs and currently manages social marketing channels for the Health IT Leadership Summit and Technology Association of Georgia’s Health Society. You can find her on Twitter @JennDennard.