Research: 4 out of 5 Patients with Access to Telemedicine Use the Service

Although the term “telemedicine” probably conjures up the image of a physician interacting with a patient using video, earlier forms of telemedicine used the telephone (or even the telegraph) and allowed physicians to talk to patients without one or the other having to…well, saddle up a horse.

Telemedicine is more than just a way to avoid having to travel to a physician’s office. Advances in technology are allowing telemedicine to develop into a whole system of care that will eventually become integrated into daily life. Additionally, telemedicine is becoming a systematic form of data creation, transmission, analysis, and action. But, before we get too deep into the future, let’s look at the past. 

In 1844, during the Civil War, soldiers used the telegraph to order medical supplies using a new telegraph connection between Washington and Baltimore. 

In 1876, Alexander Graham Bell invented the telephone, and, within a decade, networks of wire were connecting homes and businesses in many communities.

In 1906, when the first EKG machine was developed, its inventor, Willem Einthoven, performed one of the earliest examples of data transmission. When the local hospital did not want him to transport patients to his lab, Einthoven used telephone lines to transmit the data there from the hospital. 

In the 1920s, the basic television was developed, and soon thereafter, articles envisioned an audio/video, patient/physician interaction.

The 1950s brought the first transmission of radiographic images, which later revolutionized radiology practices. 

Continuous technologic advancements have dramatically changed the concept of telemedicine—the development of a secure and an ubiquitous wireless system and Internet connectivity; smartphones; “smart” pill dispensers such as Clevercap that dispense medication and alert a data system that it has done so; scales to weigh patients with congestive heart failure and alert caregivers if rapid changes have occurred; pulse oximeters and glucometers that download to a central warehouse for monitoring; consumer wearables of all sorts; and, of course, big data, with all of its associated analytics.

Clearing up Confusion

People often wonder about the difference between the words telehealth, telemedicine, and mHealth. The terms telemedicine and telehealth are basically interchangeable. The US Department of Health & Human Services defines “telemedicine” as the use of telecommunications and information technologies to share information, and provide clinical care, education, public health, and administrative services at a distance.

The term “mHealth” has evolved into something slightly different, and is generally defined as the technology of remote monitoring and the apps used with smartphone devices. As such, mHealth is a component of telemedicine.

The Allure

The allure of telemedicine is different for different people. For the patient, convenience. For the physician, a new revenue source. For insurers, an additional cost and management burden. For technology companies, another way to sell gizmos, software, services, etc. For lawyers, another potential niche practice. For those in government, another layer of regulations and bureaucracy. For integrated hospital systems, a way to decrease admissions. For risk bearing groups, a way to expand access to care and avoid ER use—the list goes on and on. And each “allure” is creating opportunity for businesses to blossom.

The fuel causing this sector of medicine to explode is in a word, payment. Remember that in medicine, traditionally, a phone call between a physician and a patient has not been a billable event. 

The decision by employers, payers, and CMS to actually pay for medical care rendered from afar to broad segments of society is the real fuel. In addition, high office co-pay costs for patients make a $50 telemedicine visit for a common acute illness approximately the same cost as a visit to their primary care physician. 

Medicare Payment

Payment for telephone (audio only) communication began in earnest in 2013 when Medicare started to reimburse physicians and non-physician practitioners for transitional care management (TCM) under two Current Procedural Terminology (CPT) codes: 99495 and 99496. TCM involves a range of specified services to support a beneficiary for 30 days following his or her discharge from a facility setting. 

Then, in 2015, CMS added payment (about $43 once per month) for a new CPT code—99490—for complex Chronic Care Management (CCM), defined as the non—face-to-face services provided to Medicare beneficiaries who have multiple (two or more) significant chronic conditions. In addition to office visits and other face-to-face encounters (billed separately), these services include communication with the patient and other treating health professionals for care coordination (bothelectronically and by phone) and medication management. 

Although there have been some attempts in Congress to significantly expand Medicare coverage for telemedicine using both audio and video, current coverage is limited to just a few Part B services from specific geographic areas such as a rural Health Professional Shortage Areas. CMS allows payment for services ranging from the traditional medical care interaction to a variety of other visits including: substance abuse, psychological visits, end stage renal disease, smoking cessation, and others. 

The sites where the patient is being “seen” are strictly defined and include specified rural health clinics and hospitals, federally qualified health centers, and community mental health centers. For the roughly 80 covered codes, the use of a telecommunications system substitutes for an in-person encounter for physicians, nurse practitioners, physician assistants, nurse-midwives, clinical nurse specialists, and certified registered nurses.

Medicaid Telemedicine

Medicaid also has gotten into the mix. Most states now offer some coverage for telemedicine, although it varies by state. 

For purposes of Medicaid, telemedicine “seeks to improve a patient’s health by permitting two-way, real time interactive communication between the patient, and the physician or practitioner at the distant site.” Again, being consistent, CMS considers this electronic communication to mean the use of interactive telecommunications equipment that includes, at a minimum, audio and video equipment.

States are encouraged to use the flexibility inherent in federal law to create innovative payment methodologies for services that incorporate telemedicine technology. As such, states have the option/flexibility to determine whether (or not) to cover telemedicine; what types of telemedicine to cover; where in the state it can be covered; how it is provided/covered; what types of telemedicine practitioners/providers may be covered/reimbursed; and how much to reimburse for telmedicine services (subject to Federal Upper Limits).  

Private Insurance

Employers and commercial health plans also have coverage policies for telemedicine services and this coverage is growing rapidly. According to a survey done by the telemedicine company American Well, about one-third of employers offered payment for telemedicine services in 2015. Most major insurers also cover various levels of payment for telemedicine services for their fully insured members—another area where coverage is rapidly growing.

Currently, the most common uses for the “physician-patient” telemedicine episodes are general health assessments, behavioral health, and diet services. The most common conditions treated during these sessions include sore throat, respiratory illnesses, and  pink eye. Some of the providing companies limit their care to these or similar conditions.

Benefits of Telemedicine

Telemedicine offers numerous potential benefits, including: 1) Cost efficiencies. The average telehealth visit is about $50, which is much lower than an office visit—typically around $130 to $180—and significantly lower than an ER visit, which comes in at about $600 to $700; 2) Improved access to care. With telehealth available 24 hours per day, employees can access care after normal physician office hours, keeping them at work during the day—something employers like; 3) Improved quality. By removing a major barrier (ie, needing to leave work, travel, wait in a waiting room, arrange for babysitting), it is actually not a far fetched idea that people may be able to better manage their chronic illnesses, perhaps leading to better outcomes; and 4) Attract new talent. Employers are offering telemedicine services to attract millennials, a group that is demanding more technology in their health care.

Cost and ROI

Employers and insurers are looking for telemedicine to be budget-neutral or even provide a lower-cost alternative to ER and urgent care centers. There is concern, however, that people will “abuse” this new benefit and increase the absolute cost. 

That concern seems to have been disproven in a white paper by Dale H. Yamamoto. His conclusions were that existing data suggest that the time of telemedicine visits appears to correspond to the most common ER visit times of the day. His research also demonstrated that only about 4 in 5 patients for whom telemedicine was available actually used the service in a given year, with the average number of telemedicine visits at 1.3 per year leading to no increase in total costs.

It is obvious that payment has fueled the revolution in telemedicine, but there are numerous other major trends that are driving telemedicine to perhaps become the most strategically disruptive technology in medicine yet. 

Be sure to check out the April issue for part two of Telemedicine: Challenges and Potential, which will discuss the barriers, business models, and finally, the future of telemedicine.