Telehealth has gone mainstream: an article on telehealth recently was published in the New York Times, CMS proposed new rules for telehealth credentialing and UnitedHealthcare hired a telemedicine veteran to head up a new unit.
Datamonitor estimates that the telehealth market in the U.S. and Europe will increase from $3 billion in 2009 to $7.7 billion in 2012 -- growing over 2.5 times in the next three years. Meanwhile, an Intel survey of health providers and experts found that 89% believe telehealth will transform health care in the next 10 years.
Within the health arena, telehealth is forecasted to grow faster than any other area. There's a confluence of factors driving this trajectory, including telecommunications innovations, a growing evidence base, consumers' growing embrace of technology, vendors in and outside of health care getting into the telehealth act, and an emerging regulatory framework.
Telecommunications Innovations Lay the Telehealth Platform
The 'tele-' component of telehealth is attracting a long list of telecommunications providers to the health sphere who haven't carved out a vertical health market strategy. AT&T (which will provide network infrastructure and services for the California Telehealth Network), Motorola, Verizon and others telecoms have gone public with plans to provide telehealth services.
Telehealth also has gained traction overseas, where payment is more centralized in the public sector. Thus, DoCoMo and KDDI in Japan, and Orange (France Telecom),Telefónica and Vodafone in Europe all have dedicated telehealth units.
The emergence of 3G and 4G networks, along with the proliferation of smartphones among health professionals, are the base technology underpinnings for telehealth. Effectively securing health data that run across these networks and making them redundant so that critical health functions stay online will be critical success factors for these companies.
Telehealth Evidence Grows
Health care providers are moving up the telehealth adoption curve. Intel's survey found that two out of three health care decision makers had implemented some kind of telehealth project. Among those health leaders not using telehealth, 50% planned on implementing a project within the next year.
The mother of all telehealth adopters in the U.S. is the Department of Veterans Affairs, which operates the Care Coordination/Home Telehealth program. VA's goal for the program is to keep older veterans with chronic conditions living independently at home. With 43,000 patients in the program, this might be the largest telehealth program in the world. VA has calculated that it saves money by reducing hospital admissions and shortening hospital length of stays for telehealth participants.
Further proof of telehealth's cost effectiveness is coming out of the private sector. The Cleveland Clinic and Microsoft HealthVault telehealth pilot involved physicians managing 250 patients with diabetes, heart failure and hypertension. Clinic patients used blood pressure monitors, glucometers and heart rate monitors at home, each of which uploaded data to the patients' HealthVault personal health records that connected to their electronic health records at the clinic. The project found that patients' control of their conditions improved, resulting in a reduced average number of days between patients' visits to physicians.
Philips conducted the Catalan Remote Management Evaluation (CARME) pilot with patients in Spain who were managing heart failure. Patients used the Philips Motiva telehealth system at home, coupled with support tools. Philips found that the patients had fewer hospital admissions and reported improved quality of life over a 12-month period. This research was presented at the European Society of Cardiology's Heart Failure Congress 2010 in Berlin. The study showed that telehealth, coupled with the addition of remote educational and motivational tools, helped patients improve their quality of life.
Consumers Love Technology
As many pilots are demonstrating, there's a more robust ROI for telehealth when patients better engage in their care. Patient engagement is a key to improving health outcomes. However, for patients to engage in health, they must trust the partners with whom they engaged.
Consumers are increasingly tied to the technologies they use on a daily basis, especially mobile phones. Thus, phones can become personal health hubs for those health citizens who choose to more closely engage in their health.
The 2010 BrandZ Top 100 report on consumers' favorite brands is heavy with technology names -- including Google, IBM, Microsoft, Apple, GE, Vodafone, HP, BlackBerry, Oracle, Verizon, SAP and AT&T, all of which were in the Top 25 most valuable global brands 2010 found by Millward Brown in this study.
Entrenched Vendors Want To Grow Business; Disruptors Are Entering
Some of these brand names are already involved in some aspect of telehealth. Beloved consumer technology brands have the opportunity to go up against health technology incumbents and disrupt markets for telehealth. The smartest health technology incumbents aren't willing to give up market share and are expanding telehealth offerings. Among these, GE's Healthymagination initiative is the most visible, with a $6 billion investment that brings to bear the conglomerate's corporate resources together for its broader health theme -- which includes telehealth.
The behemoths like GE will see disruptions from start-ups like Zipnosis. This company, led by the founder of MinuteClinic, is providing the platform for patients and providers to consult online via videoconference or on the phone. The company's first agreement is with the Park Nicollet Health System in Minneapolis, and the plan is to spread the model through the U.S. via employers and direct-to-consumer. Companies serving this market include American Well, Hello Health and Teladoc -- each of which has already begun to disrupt traditional health care relationships between patients and providers.
Regulations Must Emerge
After reimbursement, the regulatory framework for telehealth has been a formidable obstacle to widespread adoption. Many federal agencies touch on telehealth, which has led to fragmented regulation that's slowed adoption. HHS, the Federal Communications Commission and FDA, along with state licensing boards, all play roles in some aspect of regulating telehealth. This patchy approach to regulation must be harmonized to enable telehealth to expand beyond its pilot phase.
On May 26, 2010, a proposed rule covering telemedicine was published in the Federal Register for a 60-day comment period. For hospitals currently providing telemedicine consultations for Medicare patients, a hospital's governing body must credential of clinicians using specified criteria. The new rule would allow hospitals to use a third-party credentialing organization that would verify credentials of clinicians who wished to participate in telemedicine.
The Big Holdup: Reimbursement
It will be no surprise to iHealthBeat readers that Intel's survey identified reimbursement as the number one barrier to telehealth adoption. However, payers in both the public and private sectors have begun to recognize the potential for telehealth to help reduce costs and improve quality of care.
The Patient Protection and Affordable Care Act of 2010 includes many provisions for bundled and global payment. These payment models should foster adoption of innovative care delivery approaches, including, but not limited to, telehealth.
Some health plans that serve the private sector have also begun to cover certain remote health services, including patient-physician e-mail communication, remote telemedicine consultations, and videoconferencing between patients and physicians.
There's another market for telehealth that Intel's survey researched: consumer and patient self-pay -- a market segment that will grow in size. As more consumers pay more out-of-pocket for long-term care, they will look for new models outside of traditional institutional facilities. For an adult child with an aging, increasingly frail parent, paying for that parent to stay at home supported by patient monitoring technology, rather than paying for expensive institutional-based long-term care, will be increasingly attractive in the private-pay market.
Intel conducted focus groups among consumers familiar with long-term care costs who understood that if they could pay a few hundred dollars a month, this might keep an aging parent at home, providing both cost savings as well as promoting a better quality of life for a parent who would be happier if she could stay at home longer.
One myth that Intel busted in their survey was older people's presumed antipathy to technology at home. Even aging adults, Intel found, accepted monitoring technology in the home. The company did not find a reluctant patient population when it came to interacting with clinical home monitoring technology.
Perhaps that's a reason why the Intel survey was covered in Appliance Magazine. This is further evidence that telehealth is morphing beyond traditional health providers, into the home and consumers' daily lives.