Changing times and the business case for 'telestuff.'

Health Management Technology, July, 1997 by Patrick Burns

Advances in client-server technology coupled with a new health care business environment are opening doors to new and less expensive telemedicine solutions.

Health care organizations must adapt to a changing environment and new business rules. Telemedicine has the potential to improve the quality of care, expand access to care, and reduce costs.

My experience with telemedicine goes back to the late 1980s when I was chief information management officer--a CIO-type of position--at Brooke Army Medical Center in San Antonio.

Then, it was true in the Department of Defense and Veterans Administration systems, as it was in the civilian medical community, that if you did more work and did more procedures, you made more money. That was profit under the old paradigm of fee for service.

In today's world--with capitation, HMOs and PPOs--the whole concept of reward and incentives has been turned on its head.

With a capitated population, we make a profit if we do less. That's basically our target to work against to provide health care. So the emphasis for the military as well as the commercial world is to try to give the same high quality of service, and maybe even improve that, and at the same time not limit access.

The key is to do it in a controlled-cost environment. The way to do that is to look at how to better utilize assets.

With an integrated delivery system covering a wide geographic area, it is not affordable to have specialists and very expensive equipment in multiple locations. Assets need to be centralized.

However, if you do not implement a network or a communications infrastructure, the patient population would be penalized because they would have to go to a central facility. Or conversely the health care specialist would have to do a circuit around the area visiting patients.

We think there is a clinical business case and a pure business case to implement the technology called telemedicine and teleradiology--what I like to call "telestuff."

Making it work

To be done successfully, telemedicine has to clearly meet the organization's mission statement and be within the vision of key executives--everybody from the board of directors to the practicing health care provider. Otherwise, it will not work.

Before attempting to implement telemedicine it is important to do a baseline survey of the automation capabilities among the different hospitals that are going to be sharing a telemedicine project. A successful telemedicine project begs that there is a preexisting commonalty of relationships, automation and infrastructure.

For example, if hospital "A" has an SMS system, hospital "B" has an HBOC system, and hospital "C" has a Cerner system, each will probably have different patient identification matrixes. There might not be a master patient index within the area and telemedicine will not overcome that.

If clinicians think telemedicine will magically bridge the gap from one system to another, that's just not the case.

If in fact you want to do telemedicine between a physician in rural Kansas and Johns Hopkins, and there is not existing communications in place, at least by phone, fax or e-mail, to implement telemedicine is a giant leap.

lf nothing else, if health care facilities were providing a common e-mail system among themselves and health care providers were communicating by e-mail, that's telestuff. It's low-end telemedicine but it's good telemedicine.

If a region of facilities does not have that kind infrastructure in place, the million dollar question is: "Are they willing to commit the resources to implement that infrastructure?"

That will be the biggest cost of any telemedicine project. It won't be the telemedicine boxes--either the PCs or codecs that would go inside a facility--but the communications. There's a one-time cost of buying the boxes and then the recurring costs of communications. My belief is the recurring costs of communications will be the biggest problem and that cost will far exceed the initial acquisition of the PCs and codecs.

Before purchasing a system, a baseline survey of facilities' equipment needs must be done. Analyze the integrated delivery system and look at referral patterns. I also think administrative and health care provider buy in and leadership has to be present. Then the infrastructure costs need to be measured and supported.

It would be criminal to implement a telemedicine program without the board of directors knowing about recurring costs. There needs to be a business plan similar to any capital investment: Measure the one-time costs and measure the recurring costs.

Challenges for telemedicine

Any potential candidate for implementing a telemedicine program should look at a number of non-clinical and non-technical challenges. Most are legal and ethical.

I would suspect that chief financial officers raise their hands and ask "How much money am I going to save?"

There is not a lot of referenced literature out there that really shows that telemedicine saves money. It's an implied assumption. It's a gut feel. It's a common sense, "Yeah, I think it's got to be, but who knows?"