Slideshow 4 reasons telehealth is being embraced by providers

  • May 19 2016, 3:00am EDT
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Why hospitals are adopting telehealth

An American Hospital Association study finds growing evidence that telehealth cuts costs, expands access to care, reduces follow-up visits, and improves outcomes while reducing nursing home admissions, among other benefits.

Optimism tinged with caution

While the AHA finds great value in telehealth in patient homes and via traditional telemedicine consultations, it starts the study with a look at barriers. Limited insurance coverage remains a major obstacle, with Medicare only paying for a narrow set of services and only in rural areas. However, CMS recently expanded use for providers in certain initiatives including Bundled Payments and the Next Generation Accountable Care Organization model. Most Medicaid plans reimburse telehealth but coverage varies among the states. Private payers are more open, aligning incentives to ensure high quality to avoid readmissions and other adverse outcomes.

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Standing in the way

Another barrier has been the Congressional Budget Office which for more than a decade has considered telehealth to increase costs because of higher utilization. CBO predicted telehealth would cost Medicare $150 million in the first five years after a 2001 law was enacted; in reality the cost has been $57 million over 14 years, according to the Center for Telehealth and eHealth Law, the AHA notes. There also is recent activity within the Medicare Payment Advisory Commission to better embrace telehealth.

Benefit No. 1: Fewer follow-up visits after telehealth visits

A study in Health Affairs, done April 2012-February 2013, found a follow-up physician visit was required six percent of the time after a telehealth visit, compared with 13% for a physician office visit and 20% for an emergency department visit.

Benefit No. 2: Supplementing the emergency department

Many community hospitals cannot offer specialists around the clock in the ER and telehealth can remotely bring specialists into the treatment process, particularly in the case of patients with stroke symptoms. This speeds administration of care and can reduce transfers to another hospital.

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Benefit No. 3: Reducing hospital admissions from nursing homes

Nursing homes also don’t routinely have 24/7 physician coverage on site, and telehealth can speed diagnoses and possibly avoid a hospital admission. A recent study found hospitalizations of nursing home patients fell 4.4 percent when telehealth was used. That could save Medicare $151,000 annually per nursing home. But cost for the homes to implement telehealth, estimated at $30,000, is a sizable barrier while Medicare reaps the savings.

Benefit No. 4: Insurers and retail clinics eye telehealth

Evidence that at-risk plans and publicly traded companies value telehealth can be seen in their coverage and deployment strategies, going beyond Medicare plans to include their commercial plans in urban and rural areas. Leaders include Aetna, Anthem and UnitedHealthcare. “Most other major commercial insurers and self-insured employers are incorporating some type of telehealth benefit into their coverage,” according to AHA.

Next steps

AHA sees a future where telehealth matched with value-based payment models “can help assess the value of telehealth in situations where financial incentives promote quality improvement and cost savings.” The association also calls for geographic limitations on telehealth to be lifted so patients can benefit from increased access to expert physicians reflecting the latest best practices.

“By modernizing Medicare coverage of telehealth, including telehealth services in innovative payment models and committing additional resources to understanding the patient and costs benefits of telehealth, policymakers can advance the delivery of care and benefit patients.”