AcuteCare Telemedicine Blog


The Dollars and Sense of Telemedicine

With the anticipated “break out” of telemedicine services looming on the horizon, an important and significant obstacle still remains to be cleared away if wide-spread expansion and acceptance of medical treatment and services is to be realized.  As with the growth of any new industry it raises the question of who is going to provide the investment capital and who is ultimately going to pay for the services necessary to sustain the budding industry?

Even with the obvious benefits that telemedical services promises to bring to the traditional health care delivery model, change to the well-established and traditional minded payers of medical services continues to be a major detriment to the crack of the starter’s pistol that will unleash the race to expansion.  Currently there are five primary sources of funding for the $2.8 trillion healthcare markets in the United States, according to Jon Linkous, American Telemedicine Association (ATA) CEO.

Hospital and Healthcare Systems now permits providers the flexibility to pay for telemedicine services wherever warranted, over 100 million Americans are now covered and the number is growing rapidly.  This source remains the most fit of providers readily eager to set the pace.

Private and public employee insurers in the U.S. are expanding coverage of telemedicine but only 16 states currently mandate private insurance coverage.  This important source of funding continues to lag well behind the pace and is not likely to contribute seriously to a break-out soon.

Federal Medicare payments are currently approved for imaging and live consultations to patients in rural areas and Congress is expected to take up expansion of the payments in the coming year, but this is Congress an agency not known for leading or setting any records for implementing change.

State Medicaid coverage is available in 44 states at some level of reimbursement and three more states are considering full support in 2013.  In April, legislators in Arizona passed a law prohibiting insurers from denying payment for medical services solely because they are provided through telemedicine. The law is limited to providing payments in 13 specific rural areas and only for telemedicine treatment for seven specific conditions. The laws implementation was delayed until the end of 2014 to satisfy insurance industry concerns.  Such tentative, piecemeal advances’ provides little hope for a surge in Telemedical services being paid for by Medicaid provider’s in Arizona.  Apparently, as with justice, the wheels of bureaucratic change move slowly.

Direct federal healthcare agencies, such as the U.S. Veterans Administration, Department of Defense, Indian Health Service, federal and state and local corrections departments are active providers of remote health care.  This is rapidly expanding and increasingly relies on partnerships with non-governmental health providers.

Investment capital remains a concern for providers looking to aggressively enter the telemedical marketplace. While the mystery of how the new technology will generate returns on investment begin to fade in investors and venture capitalist minds, infrastructure funding sources are limited and somewhat timid in this hesitant economic environment.

The benefits of telemedicine to improve the access and quality of patient care is obvious, and makes perfect sense to providers, practitioners and patients alike, but the dollars portion of the “dollars and sense equation” is proving to be a more persistent challenge to expansion and sustainable growth of this new industry.


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