Telemedicine Boom Awaits Cost Studies

Telemedicine, or the use of telecommunications and information technology to deliver clinical health-care services, has become a fixture in some rural hospitals in the United States. Much of this presence is due to heavy government subsidies and grants, which leaves health officials unsure if telemedicine is cost-effective in these clinical settings. Other barriers-legal, financial, and technological-have limited its widespread use, and some critics charge that telemedicine is an unwise investm

Dec 8, 1997
Stephen Hoffert

Telemedicine, or the use of telecommunications and information technology to deliver clinical health-care services, has become a fixture in some rural hospitals in the United States. Much of this presence is due to heavy government subsidies and grants, which leaves health officials unsure if telemedicine is cost-effective in these clinical settings. Other barriers-legal, financial, and technological-have limited its widespread use, and some critics charge that telemedicine is an unwise investment for improving public health.

BOTTOM LINE: NLM's donald Lindberg says better studies are needed to determine if telemedicine can work in clinical settings.
Health officials note that telemedicine could have a positive impact on the research community. Using real-time teleconferencing equipment and the Internet, telemedicine allows rapid communication between investigators, speeds the translation of articles, and improves information access and education in developing countries. Telemedicine already is used in a variety of medical specialties, including telepsychiatry, teleophthalmology, telerehabilitation, and teledermatology. Telepathology could help basic science break out of the laboratory by allowing researchers from remote locations to examine and manipulate high-resolution "electronic slides" of cells and tumors. Teleradiology, the most practiced specialty in telemedicine, had a worldwide diagnostic equipment market of $89.2 million in 1996, according to financial analysts at Frost and Sullivan in Mountain View, Calif.

Despite $646 million worth of telemedicine trials in more than 10 government agencies, little information exists on the economic costs and benefits of these programs (D. Lobley, Journal of Telemedicine and Telecare, 3[3]:117-25, 1997). The National Library of Medicine (NLM) of the National Institutes of Health has invested $42 million in 19 programs that will attempt to make such an assessment.

"At NLM, we now see reams of research on telemedicine come in and out," observes Donald A.B. Lindberg, director of NLM. "But let's face it-most are feasibility studies for the government. Many of these applications of telemedicine are realistic in the military and in the prisons because you know who has to pay for it and you can force utilization. But we don't know if all of these programs will have currency in more uncontrolled health-care settings."

RURAL APPEAL: Telemedicine electronically eliminates the remoteness of rural regions, notes Hays Medical Center's Robert Cox.
Telemedicine trials have been hard to evaluate economically because of the difficulty of giving a value to certain qualitative outcomes (E. McIntosh, J. Cairns, Journal of Telemedicine and Telecare, 3[3]:132-9, 1997). According to Robert Cox, medical director of rural development and telemedicine at the Hays Medical Center in Hays, Kan., many benefits of telemedicine just can't be measured. "I know of a town of about 12,000 that needed a doctor," Cox recalls. "They put a lot of effort into recruiting because several other towns wanted a doctor. In the end, the doctor was persuaded to choose because this one town had telemedicine program linking it to a major hospital. In small Midwest towns, you cannot even begin to place a dollar value on landing a doctor in your hometown."

According to the Department of Health and Human Services' Office of Rural Health Policy, 353 of all 2,472 rural hospitals in the U.S. provide some form of telemedicine services. Each of these rural hospitals was linked to one of 205 larger health-care facilities. Of the combined 558 facilities, only 10 percent were doing more than one consultation per day.

Some researchers note that improved access to telemedicine may not improve rates of use for health-care facilities. For example, the U.S. Army, the National Cancer Institute, and the Department of Health and Human Services have combined resources to develop a prototype mobile breast-care center. The vehicle expands on site to reveal a comprehensive breast-exam clinic complete with a reception area, exam rooms, and an Internet education room. The heart of the mobile unit is its digital telemammography unit, which sends images to remote radiologists.

TECHNOLOGICAL QUICK-FIX: North Carolina's Etta Pisano worries that other aspects of health care may be ignored by telemedicine.
According to Etta Pisano, a professor of radiology and chief of breast imaging at the University of North Carolina, Chapel Hill, projects like the collaborative mobile telemammography unit potentially focus on technology at the expense of other aspects of health care. An admitted "technology lover," Pisano states, "There can be no technological fix to the biggest barrier to the success of telemedicine. You have to get people to use it. It is not clear at all that telemedicine can improve access. My opinion is that if you build it, they won't necessarily come. So, you have to look at how rural people think, where their values lie, and how the community is structured. You have to look at why people go to the doctor and especially why they don't go. A big piece of medical machinery alone won't improve access."

Pisano found that in rural regions of North Carolina, nearly 40 percent of African American women with a positive screening mammogram did not comply with follow-up examination recommendations. She says this high noncompliance rate shows that telemedicine programs need to develop better strategies for increasing health care utilization.

Some models already are under development. The North Carolina Breast Cancer Screening Program (NCBCSP) has done extensive research on the social structure of African American communities in rural North Carolina (J.L. Earp et al., Breast Cancer Research and Treatment, 35:7-22, 1995; J.L. Earp et al., Health Education and Behavior, 24[4]:432-51, 1997). The NCBCSP research team found that African American women most frequently sought health advice from other women in the community, according to Mary Altpeter, a professor of public health at the University of North Carolina, Chapel Hill, and a researcher on the project.

Others question whether high-technology projects like the mobile digital mammography unit are worthwhile investments for public health. Ronald E. LaPorte, a professor of epidemiology and director of the Global Health Network at the University of Pittsburgh, estimates that 99 percent of all long-distance health-care funding goes toward "high-tech" research and development in telemedicine, while only 1 percent goes to teleprevention (R.E. LaPorte, The Scientist, Aug. 18, 1997, page 10). Teleprevention, which combines epidemiology and the Internet, often is touted as the most cost-effective way of improving public health through rapid telecommunications. LaPorte argues that expensive technology developed for telemedicine has a small payoff in improving health. "During the last century in developed as well as developing countries, there has been a 25-year increase in life expectancy," he says. "It has been estimated that 24 of the 25 years were the result of public health/ prevention."

THINK GLOBALLY: Reimbursement issues have forced Robert Brecht's company to seek private telemedicine markets overseas.
Programs in the military and the prison system provide evidence of some of the advantages and promise of telemedicine. Robert M. Brecht, CEO of the consulting firm International Telemedicine Center Inc. in Houston, developed and implemented 18 telemedicine specialty clinics for the Texas Department of Criminal Justice prison system. Facing mounting transportation costs for inmates, prison officials have increasingly looked to telemedicine as an economical health-care alternative, according to Brecht.

COMPUTERIZED TESTS: Using telepsychiatry to identify mental disorders is very effective, says Dean Foundation's Kenneth Kobak.
Telepsychiatry programs that use computer-aided surveys to diagnose patient conditions can be more effective than one-on-one interviews. For example, one recent study shows that computer-administered surveys, which are frequently used by telephone marketing companies, identify mental disorders as effectively as those administered by mental health clinicians (K.A. Kobak et al., JAMA-Journal of the American Medical Association, 278[11]:906-10, 1997). Kenneth A. Kobak, a researcher at the Dean Foundation for Health, Research, and Education in Middleton, Wis., reports that the computer-administered version of the Primary Care Evaluation of Mental Disorders (PRIME-MD) identified alcohol abuse in 15 percent of patients tested. This compares with a 7.5 percent identification rate in clinician-administered PRIME-MD tests. At the very least, users trust it more in certain circumstances. Computer-administered interviews to identify potentially HIV-positive blood donors turned up more than six times more at-risk donors than did written questionnaires or interviews conducted by professional staff (S.E. Locke et al., JAMA, 268[10]:1301-5, 1992).

Telemedicine also shows advantages when health information is sensitive and potentially damaging to the patient, according to Richard A. Quattrochi, president of the Home Access Health Corp. (HAHC). Based in Hoffman Estates, Ill., HAHC has become the only full-service home HIV-testing company in the U.S. following the sudden discontinuation of the New Brunswick, N.J.-based Johnson and Johnson's Confide (Notebook, The Scientist, Sept. 15, 1997, page 31). The company provides remote and anonymous HIV testing and counseling via the postal and telephone systems. More than 3,000 customers per month send in home blood tests for analysis by the company. A staff of professional counselors provides 24-hour support and counseling to test-takers. The home HIV test has been recommended by groups concerned about the establishment of state HIV registries.

STREP 2001: HAHC's Richard Quattrochi envisions strep throat tests and remote examinations being available in drug stores.
Quattrochi declines to specifically discuss Home Access Health's future activities in telemedicine, although he envisions on-demand strep throat tests and examinations in drug stores by the end of 1998. Such tests would use on-site diagnostic tests and real-time teleconferencing with a physician, he says.

But barriers remain that prevent telemedicine from becoming a major force in health care. According to Brecht, reimbursement and licensing issues have sharply limited the practice of telemedicine. Teleradiology, which accounted for 67 percent of all telemedicine consultations in 1996, is fully reimbursed by almost all private health insurers. But many services, including teleconferencing, are not covered by insurers.

"Reimbursement is one of the No. 1 reasons why our business focus has been international," Brecht says. "We've focused on fee-for-service markets in the Middle East and Southeast Asia because most insurers and even Medicare refuse to count anything but face-to-face consultations as legitimate health care."

MARKETING TECHNOLOGY: Allina Health System's William Goodall believes telemedicine increases a hospital's marketability.
Medica, the health insurance division of the Allina Health System, based in Minneapolis, is one of a handful of private insurers that provide reimbursement for all telemedicine services, according to William Goodall, regional vice president for medical affairs at Allina. "As a marketing strategy, insuring telemedicine works," Goodall says. "Telemedicine is one of major things we're doing to compel rural populations to use our services. Insuring telemedicine is one of the things we can do to compel them to use our insurance. We hope other health-care providers will begin to follow our lead."

Barriers are beginning to come down. Beginning in 1998, the Federal Communications Commission (FCC) will provide $400 million in subsidies to health-care providers seeking access to telecommunications lines. The cost of transmitting large amounts of information typically is higher in rural areas, and the FCC subsidy will ensure that rural hospitals pay rates comparable to those in urban areas. At the end of October, the Department of Agriculture's Distance Learning and Telemedicine Program announced additional disbursements for $10 million in grants and loans to fund telemedicine programs and improve the telecommunications infrastructure.

In June, Congress approved Medicare payments for telemedicine consultations occurring in rural areas. In 1996, only two private insurers that reimbursed for long- distance consultations were identified by the congressional Joint Working Committee on Telemedicine. But in the last year, a number of legislative reforms that will widen coverage were passed in states like California and Oklahoma.

ACROSS STATE LINES: Lawyer Robert Waters says reactionary legislation has hindered interstate telemedicine.
Licensing continues to restrict the growth of interstate telemedicine as a number of states have enacted "reactionary legislation" that all but prohibits telemedicine, according to Robert J. Waters, an attorney specializing in telemedicine at the Arent Fox law firm in Washington, D.C. Alabama has prohibited teleconferencing by permitting only no-fee consultations with out-of-state doctors. In Mississippi, any doctor who renders a medical opinion as a result of the transmission of information must obtain a license to practice in the state. Waters is hopeful that states will soon adopt voluntary reciprocity agreements similar to those for drivers' licenses, which would allow interstate medical consultations.

"The fundamental problem with licensure is that 19th-century laws are being bent to the 20th century," Waters maintains. "These laws were framed at a time when medicine was new and without standards. But medicine now has rigorous standards from state to state. For example, every state now requires applicants to graduate from an accredited medical school and pass the U.S. Medical Licensing Exam. Any existing licensing differences between states are really differences of paperwork and not substance."

Some private companies have found ways to short-circuit the interstate licensing issue. Home Access Health avoided licensing problems when the entire diagnostic and counseling service was approved as a medical device by the Food and Drug Administration, Quattrochi says. Another way around the licensing problem is to hire physicians and clinicians from each of the 50 states. But such a solution is costly and unrealistic for smaller telemedicine practices. Until legislative reform takes effect, Quattrochi concludes, individual state laws will continue to hinder telemedicine's growth.