Long-distance medicine: telecommunication promises to deliver better care - includes related article on the employer's viewpoint

Telecommunication promises to deliver better care. But will it cut the nation's health hill?

Technology, often blamed for its role in increasing medical costs, may actually provide a way to save billions. The ability of hospitals, clinics, physicians, laboratories, insurers, and, eventually, employers, to use the nation's widespread telecommunication infrastructure for high-speed, high-resolution video, image, and data exchange could cut the nation's health care bill by as much as $36 billion, according to a 1992 study by international consulting firm Arthur D. Little in Cambridge, Mass.

According to the report, these savings could be achieved through four telecommunication applications: 1) Electronic management and transport of patient information: projected savings of nearly $30 billion; 2) Electronic processing of health care claims: projected savings of nearly $6 billion; 3) Electronic inventory management systems: projected savings of more than $600 million; and 4) Teleconferencing for professional training and remote medical consultations: projected savings of more than $200 million.

While difficult to quantify, early results from telemedicine projects are providing some support for Little's estimates.

One example is a telemedicine project linking specialists at the Medical College of Georgia (MCG) Telemedicine Center in Augusta, Ga., with physicians at Dodge County Hospital, 130 miles away in rural Eastman, Ga.

Established in November 1991, the system enables specialists at MCG to examine patients and to work directly with physicians at the rural Eastman hospital. High-resolution cameras transmit images across T1, or dedicated, phone lines so MCG doctors can see whatever the doctor at the remote location sees.

Using electronic stethoscopes, otoscopes, and laryngoscopes, the specialist can examine a patient's heart, lungs, eyes, and throat. Via teleradiology, X-rays and CAT scans are transmitted over the telephone lines for examination at MCG.

Based on some 300 telecommunicared consultations carried on at Dodge County and five other remote sites connected to the MCG network, about 83% of the patients who would have had to travel to the MCG for diagnosis or care were treated locally, says Jay H. Sanders, M.D., who directs the MCG telemedicine network.

If about half those patients had been treated as inpatients at an estimated inpatient cost per day of $800--about average for a hospital such as Dodge County, compared with about $1,300 per day at MCG--telemedicine could have significantly cut costs on a per-patient basis. Not factored into those figures are transportation savings, elimination of lost productivity, and the benefits that come from faster local treatment, notes Sanders.

Similar evidence of telemedicine's potential for cutting health costs comes from the Texas Tech University Health Sciences Center in Lubbock. The center's MedNet System enables primary care providers in rural west Texas to consult with medical specialists at the Texas Tech teaching hospital. Based on an analysis of 11 consultations between center physicians and those at Big Bend Regional Medical Center, a 30-bed hospital in Alpine, Texas, an independent accounting firm estimated an average savings of about $1,000 per consultation, says Steve Cotton, director of marketing and program development for HealthNet, the center's unit specializing in rural outreach via telemedicine.

Positive as those results are, the majority of telemedicine projects are still operating on a tryout basis, but efforts are under way to quantify cost savings benefits. In the first quarter of 1994, for example, MCG submitted a proposal to the Health Care Financing Administration to provide an extensive cost/benefit analysis.

RURAL OUTREACH

One of the most effective applications of telemedicine is delivering specialized health care to patients in rural areas. That is the reason Texas Tech adopted the technology. "We had a shortage of primary care doctors, an aging population, a lack of preventive health care, a lack of health care infrastructure, and huge distances to overcome," explains Cotton. "Driving to a tertiary care center is a matter of hours and hundreds of miles." To cut that time, the center instituted the MedNet System. Via MedNet, two-way video consultation can occur between center specialists and physicians 310 miles away at the Big Bend Medical Center.

One example: Shortly after the program was implemented in 1990, James Luecke, M.D., in Big Bend, initiated an urgent two-way consultation with a center neonatologist. He asked for a review of X-rays and the medical history of an infant with severe respiratory distress. During the videoconference, the diagnosis of respiratory distress due to aspiration pneumonia was made and emergency treatment was recommended. Within hours, the infant was in stable condition.

By the end of 1993, nearly 300 interactive consultations had been completed over MedNet. "Patients are relieved at not having to go 300 miles to see a specialist," says Cotton. "This system also prevents unnecessary duplication of tests at the tertiary center. It keeps revenue flowing into the local hospital, which may be struggling to stay afloat."

With the success of the Lubbock-to-Alpine connection, the project is expanding to include the Texas Department of Criminal Justice. "We found you could link specialists with prison hospitals and avoid the security problems that may arise from transporting an inmate," Cotton says. Based on the success of the pilot project, the medical center is now under contract with the Texas Criminal Justice Department to serve thousands of prison inmates at these facilities.

ONE STEP FURTHER

Interactive video consultation is also being done in Iowa. However, plans there call for using fiber optics rather than standard copper telephone lines as the primary telecommunication infrastructure.

Fiber optic transmissions are superior in cost, speed, image clarity, and dependability compared with standard telephone lines, says Ginny Wagner, director of physician and office systems at the 710-bed Iowa Methodist Medical Center in Des Moines. "Fiber optic transmits the same kind of image you get with Monday Night football"--something not possible with T1 technology, she says.

The Iowa Communications Network (ICN) is a state-owned fiber optic network that has more than $200 million worth of cable extended into all of Iowa's 99 counties. Originally established as an education vehicle, state law currently limits ICN usage to that purpose, says Steve Brenton, president of the Iowa Hospital Association in Des Moines.

The state-subsidized ICN charges $5 per-hour, per-site. Therefore, a two-way videoconference costs $10 per hour. In contrast, the normal teleconferencing rate across commercially available copper lines is $400 per hour, Wagner says. Even if the cost of ICN triples when hospital access isn't subsidized, the savings would still be substantial.

In July 1993, IMMC sponsored an eight-hour demonstration using the ICN to link Greene County Medical Center (GCMC), a rural hospital in Jefferson, Iowa, to IMMC. During the demo, patients were simultaneously examined by GCMC physicians and IMMC specialists and two continuing education sessions were conducted for providers.

On the strength of the demo results, IMMC has been awarded a $700,000 grant to reinstate the pilot telemedicine network and test it over a one-year period. Telemedicine applications slated to be brought up with GCMC and Trinity Hospital in Fort Dodge, Iowa, include teleradiology, telepathology, echocardiography, and remote patient consultations.

Legislation to open the ICN for telemedicine applications was passed by the Iowa General Assembly in mid-April. Governor Terry Bransted signed the legislation last month.

However, there will be significant costs for hospitals that want to connect to the ICN, Brenton cautions. "A lot depends on where the access line is within the county, because it is going to cost several thousands of dollars a mile to lay the cable to the hospital," Brenton says.

Additional costs for required hardware and software mean that, "in many cases, you're going to be looking at over $100,000 in equipment, initially." Brenton says, "We are going to be looking at grant funding opportunities for our hospitals because these rural hospitals don't have that kind of money lying around."

ELECTRONIC BULLETIN BOARDS

Whether transmitted over standard T1 lines or fiber optic cable, interactive video and audio are not the only way providers are taking advantage of telecommunication technology.

Since its inception in January 1993, the Virtual Medical Center, an electronic bulletin board system operating from Montana State University in Bozeman, Mont., has provided clinical support and CME courses to callers nationwide as well as four foreign countries (Canada, the United Kingdom, Mexico, and Sweden), says Robert J. Flaherty, M.D., project director.

Through the VMC, any medical professional with a personal computer, a modem, and BBS software can do the following:

* Participate in case discussions;

* Access medical library services;

* Download and receive credit for CME courses which St. Vincent Hospital, in Billings, Mont., has made available on the VMC;

* Access all of the resources of the University of Montana School of Pharmacy via E-mail; and

* Receive the latest available public health advisories and information.

Since the beginning of 1993, more than 25,000 calls have come in to the VMC and Flaherty estimates more than 1,300 health care professionals are regular users. Currently, an estimated $75,000 to $100,000 in annual network costs are funded by grant money, he notes.

INFORMATION NETWORKS

Videoconferencing for remote medical consultation and professional training is where some of the more highly visible telemedicine projects' efforts are concentrated. However, telemedicine, broadly defined, also includes electronic management and transport of patient information. It is in this area that some of the largest return on investment from telemedicine may be realized.

For example, Little estimates that $30 billion of the potential $36 billion total in savings that could be delivered by telemedicine would come through applications that involved sharing patient information in a sort of super-patient record. "Over time, there will be complete patient records with diagnostic images of all kinds, and patient information such as prognosis, diagnosis, outcomes, drug reactions, billing information...the whole thing," predicts John Scott, president of the Center for Public Service Communications, technology consultants in Arlington, Va.

As with clinical applications using telemedicine, health care information networks also are in the early stages of development. Several programs illustrate the direction and potential benefits of these information-sharing applications.

VENDOR-DRIVEN NETWORKS

The Wisconsin Health Information Network (WHIN), which began operating in March 1993, is designed to allow Wisconsin health care institutions to share information electronically across telephone lines.

Membership is open to physicians, hospitals, insurers, employers, and medical support facilities such as labs, home health care organizations, and pharmacies.

WHIN uses a shared pricing model, according to Frank Hoban, WHIN general manager. "That's a nice way of saying that everybody pays a proportionate share based on the value of the work [performed through WHIN]." Initial costs for hospitals range between $50,000 and $125,000. Annual fees range from $30,000 to about $120,000, depending on institution size and number of physicians accessing the network.

WHIN is a joint effort of Ameritech Health Connections, a subsidiary of Ameritech, a regional Bell operating company in Chicago, and Aurora Health Care Systems in Milwaukee, a hospital network which includes seven hospitals, multiple clinics, and home health care facilities.

Since WHIN went up, nine Wisconsin hospitals have come under contract and five of them have begun using the system. Networks such as WHIN offer participating hospitals an alternative to establishing proprietary links--between hospital and physicians, for example--that are too costly to establish individually.

That was the primary reason Children's Hospital of Wisconsin, a 224-bed pediatric tertiary acute care facility in Milwaukee, opted to join the network. "We couldn't spend millions of dollars developing a proprietary system to link everyone [at Children's Hospital]," says Dennis Casey, director of information services. To date, hospital costs to set up on WHIN have been under $200,000, he says. In addition, the WHIN infrastructure can be leveraged eventually to "get to things like videoconferencing and teleradiology as well as CME", he says.

So far, dose to 50 physicians are accessing the hospital data base via WHIN and the reaction from physicians is positive. An additional benefit may be cost savings. The first two hospitals that joined the network estimate minimum annual savings of $200,000 so far.

TELEMEDICINE CHALLENGES

Major strides have been made in telemedicine over the last few years. However, some daunting challenges must be overcome before this technology for electronic health care delivery becomes a standard way of delivering health care information.

One area of concern is the cost of telemedicine. Depending on the size of a community, for example, it might take $5 million to $20 million to start a community-driven information network, says Roy Walters, vice president in the Chicago office of First Consulting Group. And even if telemedicine limits the need for specialists in rural areas, "you still need a high-priced, high-tech maintenance crew" to maintain the technology, notes John Gosbee, M.D., executive director of the Center for Applied Medical Informatics at the Kalamazoo Center for Medical Studies in Kalamazoo, Mich.

Gosbee and others also pinpointed reimbursement for consultation as a stumbling block. Currently, some specialists are not reimbursed for the services they provide over electronic networks because HCFA has not issued policy approving reimbursement levels for Medicare or Medicaid. So far, only MCG's telemedicine program--perhaps the largest and longest-established in the country--has received a HCFA waiver that allows specialists to be reimbursed for electronic consultations, says Sanders.

Reimbursement is "a very lively question" in telemedicine, acknowledges Tom Gustafson, acting director of HCFA's Office of Legislative and Intergovernmental Affairs. Noting that HCFA is studying the question, he points out that "we want to see telemedicine improve access to care as opposed to being used to increase market share."

Economics and government policy also play a part in another challenge to full-fledged telemedicine implementations. Since the 1984 breakup of AT&T, regional Bell telephone companies such as Ameritech have been banned from providing any service across the Local Access and Transport Areas that have been defined by the government. This ban prevents the regional Bell companies from linking hospitals, health care providers, and patients in any instance in which a LATA boundary would be crossed," according to Little.

"The long-distance restriction precludes the Bells, however, from developing applications which, to be most effective, need to be statewide, regional, or national in scope," the consulting firm writes in a summary report, "Health Care Cost Reductions: The InterLATA Component." Only with the removal of the interLATA restriction can the Bell companies, together with health care providers, achieve the cost reductions identified by the study, the consulting firm concludes.

Despite challenges, telemedicine leaders are confident that this technology is the way of the future. In Georgia, MCG is planning to have 60 health care sites throughout the state linked into a telemedicine network by September so that "any patient anywhere in Georgia can be examined by a doctor anywhere in Georgia," says Sanders.

The Employer's Viewpoint

Health care experts predict that eventually employers will connect up with the many variations of telemedicine networks now beginning to emerge. "Increasingly, large employers want access to patient care data so they can monitor cases and know that the negotiated purchasing of contracts that they do with group plans is effective," says John Scott, president of the Center for Public Service Communications, a consulting firm in Arlington, Va. "The technology is going to allow employers who are the purchasers of the care., to have access to that kind of [health care] information."

However, the operative word here is "eventually". The Wisconsin Health Information Network (WHIN), for example, is actively soliciting employer and employer coalition memberships. While "employers have been very receptive to the whole concept," especially for the potential to develop outcomes data based on the electronically stored information, none had signed up at press time, says WHIN general manager Frank Hoban. However, on April 1, the Wisconsin Physician Services, in Madison, became the first insurer to join WHIN, he notes.

Similarly, no employers are currently linked into videoconferencing networks such as those currently hosted by the Medical College of Georgia Telemedicine Center in Augusta, Ga. or the Lubbock, Texas-based Texas Tech University Health Sciences Center (TTUHSC). However, direct participation may be in some employers' not too distant future. For example, large firms might consider directly linking up to access interactive consulting services to cut down on workers' compensation claims, says MCG telemedicine director Jay H. Sanders, M.D. Indirectly, virtually all employers could benefit from insurance premium decreases that would be the result of cutting health care costs, assuming telemedicine reaches its potential.

Still, "we are all naive if we think that total health care costs will go down in the first few years," asserts Sanders. While telemedicine can definitely result in decreasing costs on a per-patient basis, the increased access provided to people who are currently disenfranchised from the nation's health care system will probably lead to an initial increase in total costs, he predicts.

COPYRIGHT 1994 A Thomson Healthcare Company
COPYRIGHT 2004 Gale Group