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Trends in Telehealth
Making healthcare more collaborative, affordable, and effective.
Telehealth is changing the way healthcare is delivered and consumed. It
gives patients the tools to manage their health, extends services to rural
areas, and enables specialists to intervene in real time. But can it
overcome the barriers to adoption?
NTT DATA
www.nttdata.com/americas
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Trends in Telehealth
EXECUTIVE SUMMARY
Telehealth is a game changer for the healthcare
industry. The current healthcare system focuses on
the diagnosis and treatment of acute disease and
on emergency care. Telehealth is patient centric and
concentrates on health rather than illness. It will play
an important role as the industry moves away from a
fee-for-service model toward more outcome-focused
care and reimbursement. More importantly, it brings
healthcare directly into patient homes and to patients
wherever they may be.
The market for telehealth is being driven by significant
trends in healthcare, population, technology,
government, and consumerism. At the same time,
outdated reimbursement policy, increased availability
of healthcare, and a shortage of providers are eroding
the barriers to adoption.
Telehealth acts as a bridge for enhancing the
relationship between patient and provider and for
improving patient satisfaction and behavioral
changes by weaving healthcare guidance and
treatment into daily life. Patient behavior and lifestyle
choices have a profound impact on health and
wellness since most healthcare is self-care. In fact,
one of the major uses of telehealth is for the
self-management of chronic disease. In addition,
telehealth increases access to care in remote rural
areas which do not have specialty treatment
facilities. As a result, many industry experts believe
that telehealth holds the key to optimizing
population health.
One of the most important benefits of telehealth is in
the lowering of costs as measured by reductions in
hospitalizations, readmissions, and length of stays.
Confidential
2013 NTT DATA, Inc.
The concepts and methodologies contained herein are proprietary
to NTT DATA. Duplication, reproduction or disclosure of information
in this document without the express written permission of
NTT DATA is prohibited.
NTT DATA
Trends in Telehealth
TABLE OF CONTENTS
Why Telehealth?4
Telemedicine Versus Telehealth4
Primary Usages of Telehealth5
Benefits of Telehealth5
Telehealth Industry Drivers
and Opportunities7
Case Study7
Telehealth Industry Barriers
and Threats9
How Telehealth Works10
Telehealth Solutions11
Case Study14
Conclusions and Recommendations15
References16
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Trends in Telehealth
Why Telehealth?
The cost of healthcare represents approximately 18%
of the US Gross Domestic Product (GDP), according to
the Council of Economic Advisors and this percentage
is growing. Such a financial trend is unsustainable.
Industry experts and studies continue to point toward
the promise of telehealth as a means to reduce costs
and change patient behavior to optimize population
health. Significant trends in healthcare, population,
technology, government, and consumerism are driving
healthcare providers and government agencies to adopt
telehealth technology in order to improve patient care,
lower costs, and reduce readmissions. More importantly,
major health plans, the federal government, national
pharmacy chains, large behavioral health systems, and
very large employer groups are beginning to leverage
telehealth to advance their strategic goals.
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Trends in Telehealth
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Benefits of Telehealth
The current healthcare system focuses on the diagnosis
and treatment of acute disease and on emergency care.
Telehealth is patient centric. It focuses on health rather
than illness. Telehealth will play an important role as the
industry seeks to improve quality by moving away from
a fee-for-service model toward more outcome-focused
care and reimbursement. Moreover, telehealth affords a
means for the industry to cope with forecasted increases
in healthcare demand and for offering care to remote
and rural areas. Most importantly, telehealth may hold
the key to the optimization of population health as a
result of its potential to change human behavior.
Telehealth will play an important role as the
industry seeks to improve quality by moving
away from a fee-for-service model toward more
outcome-focused care and reimbursement.
Trends in Telehealth
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Trends in Telehealth
Case Study
Wireless Health Monitoring System Provides a Competitive Advantage to Leading Provider of Healthcare Services
A US provider of healthcare services and leader in the
homecare market wanted to provide caregivers with a
mechanism that would enable them to more effectively
plan for the care of a loved one by alerting caregivers when
their loved one had a medical event. The phase 2 release
will provide customers with the ability to coordinate the
scheduling and calendaring of caregiver tasks.
The initial challenge was to develop a state-of-the-art
mobile application that would provide user registration,
user authentication, and automated subscriber
event notifications.
As a company focused on providing innovative peoplecentric healthcare solutions, it was essential that
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Trends in Telehealth
Native Coding, also referred to as native language is programming code that is written to run on a specific processor using
that processors instruction set.
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Fewer Physicians
The question is who will treat this growing pool of
elderly patients? According to the Association of
American Medical Colleges, a physician shortage in
the US was anticipated even prior to the Affordable
Care Act being passed in 2010. Now this same group
estimates that there will be a shortfall of 63,000 doctors
by 2015 and 130,600 physicians by 2025. The scarcity
is a result of several factors. First, a large number of
medical professionals are reaching retirement age.
Second, there are fewer healthcare professionals
being educated, trained, and licensed. This in turn
will intensify the continuing issue of a lack of
specialists and healthcare facilities in rural areas.
Trends in Telehealth
Outcome-based Reimbursement
Millions of additional Americans will qualify for Medicaid
or federal subsidies to buy healthcare under the
Affordable Care Act (ACA). Under the ACA the agency
will begin docking Medicare payments to centers with
high incidence of 30-day readmission and patients who
contact pneumonia in that same 30-day period. The act
will also result in an increasing focus on quality and
outcome-based reimbursement as opposed to the
traditional fee-for-service system. In fact, by the year
2014, hospitals with high rates of readmissions could
forfeit up to 3% of their regular reimbursement as
a penalty.
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Trends in Telehealth
Limited Reimbursement
Reimbursement is another major barrier to the
implementation of telehealth. Approximately 90 million
people in US are currently enrolled in managed care
systems which have not yet incorporated telehealth as
a significant means to control costs. Under the current
fee-for-service system, Medicare does not offer much
reimbursement for telehealth. In fact, the Medicare,
Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 put constraints on the
reimbursement of telehealth in Medicare. The Center
for Telehealth and e-health Law estimates that the
Centers for Medicare & Medicaid Services (CMS)
reimbursed approximately $5.2 million in 2011 for
telehealth out of an estimated $558 billion in Medicare
expenditures for the year 2011.
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Trends in Telehealth
Telehealth Solutions
The primary uses of telehealth encompass critical care,
education, and administration. In other words, patient
assessments, diagnosis, consultation, and supervision;
ongoing healthcare related education of healthcare
professionals, communities, and individuals, and for
purposes such as conferences, preparations, utilization
and quality studies, etc. Examples of major telehealth
applications include the following:
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Trends in Telehealth
Real-time Applications
This category of system allows for instantaneous
interactions between both the onsite and remote party.
Consequently, a telecommunications link to enable
direct two-way audio and video communications
is required. This usually takes the form of video
conferencing or video and audio streaming over the
Internet. Typical uses for real-time telehealth systems
include: telehomecare, telenursing, telemental health,
telecardiology, and teleneurology. Real-time applications
are often used for specialist consultations or
telemental health.
For example, for a patient experiencing a stroke with the
nearest hospital or neurologist hours away, access to
specialty care and treatment such as intravenous tissue
plasminogen activator, a clot dissolving medication, is
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Trends in Telehealth
Case Study
The US Department of Veteran Affairs (VA) Improves Patient Care and Reduces Costs by Leveraging
Telehealth Services
The US Department of Veterans Affairs (VA) was an
early adopter of telehealth services and is one of its
largest and most successful user organizations. In 2012
the VA provided care from 150 Medical Centers and
750 Community Based Outpatient Clinics to 485,163
patients via 1,380,431 telehealth consultations.
Approximately one-third of these patients reside in rural
areas and have limited access to healthcare without
telehealth services. The VAs telehealth services are
growing at an annual rate of 70%.
Telehealth services at the VA support both patients
and caregivers and enables patients to receive care
at home or within their local community. It is
accessible on a variety of platform and devices and
supports greater patient self-management. In fact,
the VA permitted 41,483 patients to live independently
in their own homes rather than within an institutional
care environment.
The VAs telehealth services can be divided into three
major categories: Clinical Video, Store and Forward,
and Home. Clinical video supported 145,192 patients in
2012 using 44 specialties by leveraging real-time video
technology to link hospitals and clinics. This is done
using 6,600 video conferencing units connecting via
direct dial Internet protocol. The Store and Forward
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Trends in Telehealth
References
American Telemedicine Association. May 2, 2013. www.americantelemed.org.
Boston Scientific. Cardiac Rhythm Center. January 2, 2013. www.bostonscientific.com.
Centers for Disease Control and Prevention. Rising Health Care Costs Are Unsustainable. Centers for Disease Control
and Prevention, Division of Population Health. Washington, DC, 2011.
Center for Telehealth and e-Health Law. 2013. www.ctel.org.
Council of Economic Advisors. The Economic Case for Healthcare Reform. Presidential Report, Executive Office of the
President. Washington, DC, 2009.
Darkins, Adam. Chief Consultant for Telehealth Services. Telehealth Services in the Department of Veterans Affairs.
Center for Connected Healths Connected Health Symposium. Boston, 2013.
eMarketer. January 2, 2013. www.emarketer.com.
Juniper Research. Smart Wearable Devices. Research Report, Hampshire, United Kingdom, 2012.
Project Health Design. January 2, 2012. www.projecthealthdesign.org.
Oza, Dr. Manish N., Wellpoint Comprehensive Services. Presentation: Private Payment, The Role of Telehealth in an
Evolving Health Care Environment, Workshop Summary, The National Academies Press, Washington, DC, 2012.
U.S. National Institutes of Health. May 31, 2012. www.ClinicalTrials.gov.
British Medical Journal. Effect of Telehealth on Use of Secondary Care and Mortality: Findings from the Whole System
Demonstrator Cluster Randomised Trial. Whole System Demonstrator Evaluation Team Research. London,
United Kingdom: British Medical Journal, 2012.
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