Deloitte Report on Telehealth

By August 23, 2016Commentary

We tend to be fans of telemedicine, particularly when it is used in a manner that reduces unit costs for providing health services.  Telehealth and telemedicine are often used quite broadly to refer to both the direct provision of health services via tele-communications and to other uses of technology for health-related purposes, such as mobile health apps, remote monitoring of a patient’s conditions and interactions with health plans.  The broader uses of telehealth seem less proven in creating better outcomes and more likely to add costs to the system.  A recent Deloitte policy brief examines the current state of telehealth.   (Deloitte Report)   If we look at three primary policy concerns in health care–access to care, the cost of care and the quality of care–telemedicine has the potential to improve each.  Access can be provided to people in areas, often rural, with limited local health resources, and to patients who have difficulty traveling even to close-by providers.  Providers with highly specific skills can use those skills for patients around the country, rather than just those in the area they practice in.  The unit cost of telemedicine is often lower, because lower capital costs are involved.  While there have been concerns that telemedicine raises total spending by creating additive visits, but if telemedicine is providing access to needed health care that otherwise wouldn’t be received, that is improving access and likely quality.  Controlling unit costs is far more important than controlling spending by depriving people of health services they need.  And in regard to quality, studies so far find that the quality of telemedicine services is at least equal to that of in-person ones.

The problem telemedicine faces, as the report notes, is protective state regulations and limitations on reimbursement.  There have been efforts made to harmonize and open state regulation, which typically requires licensure in a state to perform services on a patient in that state.  This is absurd, and has no rational basis.  But it will be hard to change because local physician and other health professional groups attempt to protect their turf.  It will likely take a federal law to support opening of local markets to national competition.  Reimbursement has also progressed, but slowly, particularly in Medicare and Medicaid.  Tele-monitoring of  patients also has shown good quality and some improvement in cost outcomes, but faces similar barriers.  As providers take more risk in Medicare and other plan types, they should be permitted to use telemedicine and telehealth in whatever manner they choose.  Slowly, and hopefully surely, telemedicine barriers will drop and it will be able to be used whenever it makes sense.

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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