Can ‘Docs in a Box’ Save the Health Care System?

Lawmakers Push for Federal Telemedicine Standards

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The Fiscal Times
March 5, 2014

Can long-distance virtual doctors stop U.S. healthcare costs from spiraling out of control? Better still, can these camera-ready physicians deliver an even better quality of care? 

Lawmakers in Washington think so, and they are pushing to expand the use of telemedicine and other technologies that will cut costs, ease doctor shortages and improve healthcare outcomes.

Telemedicine--the technology allowing doctors to visit patients via a Skype-like program—is already being used widely across the country.

Related: The Doctor is in your TV: a $27 Billion Business

Several insurance companies including WellPoint have established specific services for patients that utilize these tools instead of going into a clinic. For instance, if consumers want to schedule an appointment for a cold or the flu, doctors can simply beam in via a computer screen, assess the patient and write a prescription, all from potentially hundreds of miles away.

According to a study by the Affiliated Workers Association, more than 36 million Americans have already used telemedicine in some way, and as many as 70 percent of doctor visits can be handled over the phone—which typically cost much less than an in-person visit.

Though telemedicine has become more mainstream, insurance companies do not always reimburse doctors for these services. Several states, including Florida, have legislation pending that would create statewide insurance standards for telemedicine. Additionally, several pieces of legislation in Washington would require federal health programs to cover the new cost-saving technology, which is currently very restricted –especially under Medicare.

Under current law, Medicare can only reimburse telehealth for patients located outside city limits or in areas with a provider shortage. One measure, sponsored by Reps. Gregg Harper would expand that to large metropolitan areas as well.

Proponents of the technology say it is a proven cost-savings practice.

Related: Got Coverage? Great. Now Try to Find a Doctor

In one study by the Center for Information Technology Leadership, the researchers examined the impact of implementing telemedicine practices in emergency rooms and found that the cost to equip all US emergency departments with telehealth technologies could easily be covered by reductions in transfers between patients.

“From a baseline of 2.2 million patients transported each year between emergency departments at a cost of $1.39 billion in transportation costs, hybrid technologies would avoid 850,000 transports with a cost savings of $537 million a year,” the study said.

In another study, researchers at Health Affairs measured the spending difference between chronically ill Medicare patients that used a telehealth program and those that did not. They found that patients that had used the telehealth program had spending reductions of 7 to 13 percent or $312–$542 per person per quarter compared to those that did not.

“These results suggest that carefully designed and implemented care management and telehealth programs can help reduce health care spending and that such programs merit continued attention by Medicare,” the researchers said. 

Related: Opening the Black Box of U.S. Health Care Prices

Lawmakers say federal health programs could experience similar cost savings by requiring these programs to accept the new technological alternatives to in-person care.

“Technological advances have created new opportunities for enormous advances in health care delivery. However, this progress is stymied by an outdated statutory regime that restricts the use of telemedicine under Medicare,” the bill’s sponsors wrote in an Op-ed published Roll Call. They added that states that already required Medicaid to cover telehealth consultations have created a “pathway to expand telemedicine on the national level.”

This isn’t the first time federal lawmakers have tried to expand the use of telemedicine. Rep. Mike Thompson (D-CA) sponsored the Telehealth Promotion Act of 2012, which would have increased federal support and payments for telehealth services nationwide. According to the bill's sponsor, the legislation would extend those benefits to nearly 75 million Americans. The measure failed to get out of committee.

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Washington Correspondent Brianna Ehley, based in D.C., covers Congress, government agencies and spending issues, health care, and tax and economic policy for The Fiscal Times.