The value proposition in the widespread use of telehealth

Introduction

One barrier to the widespread adoption of telehealth is the question of value. This has been examined in a recent report, The Value of Provider-to-Provider Telehealth Technologies, ¹ from the Center for Information Technology Leadership (CITL). In this report we examined the value of implementing a subset of telehealth technologies: those in which there are providers at both the near, or patient side, and the far side of the encounter. We considered three types of telehealth technologies: store-and-forward, real-time video and hybrid systems. Their use was examined in four settings: emergency departments, prisons (correctional facilities), nursing home facilities and physician offices. The projections we made show that overall the benefits of telehealth technologies to the health-care system far outweigh the costs of implementation. In addition, the research showed a clear cost benefit advantage of hybrid systems over either store-and-forward or real-time video systems.

Methods

We conducted a rigorous search for evidence of telehealth value, first reviewing the peer-reviewed literature, then reviewing the grey literature and finally conducting interviews with experts in the field. The results showed that value in telehealth fell into two broad areas. First, there were savings achieved via a reduction in transfers of patients, prisoners and nursing home residents to and between emergency departments and from facilities to physician offices. Second, there were savings in reduced health-care utilization, specifically from fewer face-to-face physician office and emergency department visits and from a reduction in duplicate and unnecessary testing. With the data collected, we developed a simulation model, which was used to predict costs and benefits nationally in each of four scenarios.

The CITL simulation found that the hybrid model was the most cost-effective of the three considered. Emergency departments could reduce their annual transports by 850,000 per year, saving the health-care system US$537 million annually. In prisons, transports to emergency departments could be reduced by 40,000 per year with a saving of US$60.3 million annually. Avoidance of physician office visits from prisons could save US$210 million annually. For nursing home facilities, 387,000 transports to emergency departments could be avoided at a saving of US$327 million annually. Hybrid systems could reduce the number of physician office visits from nursing homes by 6.87 million, a saving of US$479 million annually. In reducing face-to-face visits and redundant and unnecessary tests, hybrid systems could save US$3.61 billion annually. In addition, of the 142 million referral visits in the US each year, a reduction in patient travel could save US$912 million. Thus nationally implemented telehealth systems could save US$4.28 billion annually at a steady state.

We conducted a sensitivity analysis in order to determine which factors most affected costs and savings. For all three telehealth models, the highest sensitivities were to the cost of a face-to-face visit, the cost of a televisit and the success rate of a televisit, i.e. the rate at which a virtual visit was able to avoid the need for a face-to-face visit. Thus the higher the fee for the face-to-face visit, the greater the expense avoided with a televisit, and the higher the telehealth return on investment (ROI). The lower the face-to-face fee, the lower the ROI. Similarly, the higher the fee for the televisit, the greater the expense incurred with telehealth and the lower the telehealth ROI. As the success rate increases, i.e. patients complete their care with a televisit and do not require a face-to-face visit, the ROI increases for all three models. The conclusion from this is obvious: when implementing telehealth it is critical to optimize health-care processes, such as protocols to determine who is appropriate for a televisit.

It is noteworthy that the savings projected by the CITL simulation are to the health-care system as a whole. With the exception of prisons, costs are borne by providers and savings accrue to payers. It is clearly time for payers and providers to discuss how to share the burden of costs, so that the potential savings can be realized and care provided to those who need it.

In clarifying the value proposition for telehealth, we hope that the door will be opened to remove other barriers to the adoption of telehealth: dysfunctional reimbursement patterns, concerns about malpractice and a lack of cross-state licensure.

The lack of real progress in creating a rational and reasonable reimbursement model for telehealth may be due to the fear that an increase in access will lead to an increase in costs to the payer. While this may be true in terms of professional fees for visits, our findings suggest that the costs to the payer can be offset by the savings achieved when specialists are involved earlier in a patient's care, and by reductions in unnecessary and duplicated tests. Thus policy-makers and payers should overhaul reimbursement models and create incentives to adopt telehealth, rather than continue to support reimbursement policies that have created the current disincentives to the adoption of telehealth.

Many providers have genuine concerns over the question of liability in telehealth. In the current US health-care environment it is clear who holds responsibility for a patient's care and thus who is liable in the case of malpractice. Liability in a telehealth encounter is less clear: is the provider who is with the patient during the encounter liable, or is it the provider who is being consulted liable, or is it both? The fear of being potentially liable for care given by a provider at a distance has made people reluctant to adopt telehealth. Lawmakers must renew their efforts to clarify who is liable in a telehealth encounter.

Finally, lawmakers need to examine cross-state medical licensing. Those who have begun to set up telehealth programmes have found that the US system of disparate individual state medical licensing is a barrier. Many states require physicians to be licensed in the state where the patient is present. This process can be onerous. If telehealth is to reach its full potential to improve access to care, cross-state licensure of physicians will be required.

Telehealth in provider-to-provider settings has tremendous potential to improve access to care, to improve the quality of care and to bring about new efficiencies in the health-care system. Our work suggests that the costs of telehealth systems are outweighed by their benefits. It is time for payers, providers and lawmakers to work together to remove the barriers to the adoption of telehealth, thus bringing closer the day when we can draw upon the collective wisdom of the entire health-care system for the benefit of any patient, at any time.