AcuteCare Telemedicine Blog


Looking Backwards to See Ahead – Part 5: Contracts & Technology

This is the final blog in a series chronicling the development of AcuteCare Telemedicine (ACT). Much of this reflection involves lessons learned at a past Annual Meeting of the American Telemedicine Association (ATA). What follows is an amalgam of facts, experience and opinions culled from that fantastic symposium and honed by hindsight. Today’s blog will focus on legal and technology issues.

As stated in Part 4 of this series, Running the Business, there are a myriad of issues confronting physician-entrepreneurs when establishing a telemedicine service. Physicians are trained to provide medical care, yet this is a technology business. Therefore, an overview of contracts and technology is paramount.

Contracts have to be written to fit the specific needs of each client. However, it is appropriate to have a boilerplate document that addresses both general contract features (e.g. non-malfeasance, non-compete, etc) as well as telemedicine specific features (e.g. the type of encounters covered, the times covered if not 24/7, etc). The contract should stipulate that the telemedicine provider will determine appropriate use of telepresence. If used for routine consults, a maximum number of encounters to be provided per time period can be stipulated in lieu of a sliding fee schedule. It is probably good practice to make it the obligation of the client hospital to maintain HIPAA compliance (e.g. not having the patient in an ED hallway) and assure patient identity prior to consultation (requiring the RN to show you the patient’s wristband ID [never thought of that, did you?]). The contract should also clearly state who is responsible for technical support (see technology below).

A few more legal issues bear mentioning. CMS may allow the originating site (i.e. telemedicine corporation) to do one time M.D. credentialing versus repeating at every client hospital. While CMS doesn’t apparently distinguish between corporations and health care centers, this credentialing allowance is likely in deference to university hospitals proving remote presence. It would ultimately be up to the client hospital to accept the remote provider’s credentialing process in lieu of their own.  Every business partner who has access to patient related data must have a HIPAA oriented contract. A written statement should be obtained from one’s malpractice provider documenting coverage for each state in which treating physicians are licensed.

There are ever expanding options for remote presence technology. Purchase or leasing of proprietary hardware by the client hospital has been the standard. This is attractive because the telemedicine provider makes more money and the hospital experiences lower upfront costs. In the long run, this is actually more expensive for the hospital, and obscures whether the service is providing medical care or simply technology. There are less expensive alternatives, including subscribiptions to web-based software for use with the clients preexisting resources (i.e. PC, webcam, ethernet, hospital IT department). However, choosing this technology will affect reliability; IT departments may not have dealt with the paradigm of providing 24 hour, secure, immediate, unfaltering access for physicians from remote sites.

The better alternative is the purchase of hardware and software from vendors dedicated to telemedicine technology and IT support. It has been demonstrated that client hospitals with a financial investment in the technology are more likely to use it. This leads to more encounters and a reinforcement of the value of the entire endeavor. The technology available varies from fairly fixed COWs (Computers On Wheels) to fully autonomous robots that can move independently between and within rooms, with one-time costs ranging from $25-60,000. Hospitals may then choose the technology based on budget, IT support, software and value added features (e.g. stethoscopes, government grant subsidies, etc). Hardware should undergo scheduled replacement (i.e. laptops every 3 years). Either a dedicated T1 line or reliable Wi-Fi are mandatory. Regardless of the technology employed, patient interaction should be standardized across sites by a telemedicine provider. This normalizes the decision process and improves remote partner (RN, MD) facilitation of exam at the bedside. A written protocol (e.g. NIHSS) is also useful. Finally, as technology continues to proliferate, the future holds great potential for interoperability of these systems with electronic health records, further revolutionizing patient care through telemedicine solutions.

Establishing a telemedicine service is a challenging yet extremely rewarding endeavor that will ultimately contribute to an overall higher standard of patient care. Armed with new insights culled from these experiences, AcuteCare Telemedicine is moving towards the future with consideration for the procedures and mechanics that are obligatory for success, yet not part of standard medical school curricula. 



Looking Backwards to See Ahead – Part 3: Revenue & Sustainability

This is another in a series of blogs chronicling the development of AcuteCare Telemedicine (ACT). Much of this reflection involves lessons learned at 2011’s Annual Meeting of the American Telemedicine Association (ATA). What follows is an amalgam of facts, experience and opinions culled from that fantastic symposium and honed by hindsight. Today’s blog will focus on telemedicine revenue and sustainability.

The business of medicine is a unique challenge for physicians used to focusing on clinical practice. Fee for service is now a relic in the changing healthcare landscape;  the days of physicians hanging up their “shingle” and watching patients flock to their doorstep are waning. An entrepreneurial spirit is required and is certainly not taught in medical school. A telemedicine startup may be costly in many ways. Besides “sweat equity,” it demands a large time investment dedicated to learning the marketplace, self-initiated marketing & sales, and direct client interaction. For doctors used to years of medical school, long residencies and fellowships, and 24+ hours of emergency call, this may be a natural investment. However, for long term sustainability, that patience must shift to the financial burden of expanding staff. An executive director, a sales force and marketing support are required, yet may not immediately lead to increased revenue. Balancing long term sustainability with short term revenue generation is the challenge.

Before taking the leap into the realm of venture capitalism, one must take a very critical look at economic realities. Healthcare delivery is changing, and ventures that offer reduced costs and improved outcomes, such as telestroke, are poised to grow exponentially – exactly what an investor is looking for. However, accepting capital early in business development may severely limit income if profit margins are small. That is, venture capitalists will expect a return on their investment regardless of your income. In contrast, investors may provide the guidance and experience not readily garnered from a career in medicine. Ultimately, pursuit of venture capital must meet a specific goal towards sustainability that is otherwise unattainable.

Other sources of revenue are available and should be investigated. Grants or other government funding help rural or safety net patients gain access to best possible care. For example, the state of California provided a $200 million grant to create a statewide broadband network resulting in an “eHealth Community.” They used telemedicine as a means towards a bigger goal of improved access, quality, and efficiency in underserved areas. Georgia Bill 144; The Distance Learning and Telemedicine Act of 1992, was the first mandate by any state for telemedicine. It led to development of the Georgia Partnership for Telehealth, a not-for-profit web of statewide access points based on strategic partnerships with successful existing telemedicine programs. Partnering with government and not-for-profits reduces overhead and increases client base for a telemedicine startup. In turn, the startup becomes their reliable source of clinical expertise and business acumen. In this case, it is important that businesses advocate for the common goal rather than simply for business success, and be prepared to give credit to all those involved.

Many remote presence technology companies are also working diligently to improve patient access to healthcare. By externalizing the technology component, a telemedicine startup significantly reduces overhead while giving their clients increased options for technology to meet their needs and budgets. This avoids the requirement of significant venture capital at the outset, and also ensures that the technology is handled by remote presence experts, allowing telemedicine practitioners to focus on providing cutting edge healthcare service.

Sustainability is inextricably linked to a company’s financial stability, but also derives from integration with the marketplace. While the aforementioned partnerships have obvious financial incentives, they also help make one relevant in the market. That relevance is not measured strictly in size or profit, but in the reputation of the level of service.

Goods and services can be obtained through a variety of outlets, from boutiques to so-called “superstores.” Finding one’s niche in the market will result in both profitability and sustainability.