Business Models
From Capsil Wiki
Review of Reimbursement Models for Telehealthcare
The CASPILs on Mobile and Home Monitoring Systems and the Wiki on Government Policy identified reimbursement for telehealth as the single biggest barrier to its broader adoption. It also identified that the geographical landscape is one of fragmented pilots that operate very much in standalone mode with little or no connectivity. The major efforts within reimbursement for telehealthcare have been in the USA and are on a fee-per-service basis. There does not currently exist a blanket coverage reimbursement model and any reimbursements are on a 'pay as you go' approach. Progress has been slow however and according to a recent national survey of almost 1,000 home care agencies, only 17.1% reported that they presently use a telehealth system [1]. Europe is a mish-mash of different initiatives at present but none going much further than pilot activity.
USA Telehealthcare Reimbursement Models
The demand for home healthcare services in the U.S. has increased 20% per year for the last ten years and is expected to continue at this rate [2]. According to the Association for Home Care and Hospice... "Approximately 7.6 million Americans currently receive home care because of acute illness, long-term health conditions, permanent disability, or terminal illness" [3]. This increased demand for home care has led to a large increase in home care spending. Note: Home Care as defined here is not the same thing as telehealth or telemonitoring although these categories do qualify as sub-categories. Medicare is the largest single payer of home healthcare services and, in 2006, its spending accounted for approximately 37% of home health expenditures [4]. Medicare's home health spending was anticipated to grow 13.7% in 2007, with an average a 10.2% growth rate per year from 2008 to 2017 [5]. Further detail on Healthcare Reimbursement in the USA.
Currently 35 states reimburse for Medicaid including Alabama, Alaska, Arizona, Arkansas, California, Colorado, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Carolina, North Dakota, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin and Wyoming.
The Veterans Administration
The Veterans administration has been leading the reimbursement efforts in the USA. More details at The Veterans Administration page.
Examples of US Reimbursement Policies by State
USA Reimbursement Models - Summary Points
- Specifics are called out such as Fee-for-service which is an important aspect of any telehealth business model. That is to say the actual consultation allowed must be specified exactly (a scheduled consultation just in the face to face model) or remibursement will not be possible. Note in the Texas example that they have extended the allowable range of practitioners that are allowed to bill. This is a good example of the detail that is contained in a telehealth policy and also of the variance that can occur between states/countries.
- The Consultation codes that will be used in a billing system (and ultimately appear as a HL7 message, see CAPSIL on Standards) differ from state to state. This can lead to interoperability problems if a pan-national solution is to be put in to place. Also it complicates affairs if a teleconsultation is sought in a state out side of the state where the person resides (which codes to use?).
A Texas-based organisation called PACE Healthcare [6] operates a home healthcare agency which is approved by Medicare. The PACE service involves mainly a nurse or other clinical staff actually visiting the persons and providing a face to face consultation. However they do advertise some telehealth home monotoring. It is an interesting model and may point the way forward for widespread adoption of telehealthcare i.e. telehealthcare in conjunction with face to face visits.
There is quite a bit less information on the situation regarding private payers and telehealth although some states in the US (California, Louisiana and Texas) do have legislation to cover reimbursement.
European Telehealth Reimbursement Models
In terms of telehealthcare reimbursement, there is very little of any substance happening in Europe. Most efforts are part of a 'pilot' program and are often governed by local authorities within the member states. Thus there is really no national or pan-national initiatives in place. Geremany does provide some reimbursement for chronic conditions however they also charge a 14% income levy for healthcare costs. The reimbursement landscape is very much operated on a region-by-region and program-by-program basis which indicates the need for an overall structure and clear EU-wide policy.
Examples of European Reimbursement Policies by Country
Telehealthcare Business Models - The Opportunity and Markets
The Analyst firm Datamonitor published a report in 2007 [7] that predicts "the home telehealth market will grow at a five-year compound annual growth rate of 56 percent, compared to only 9.9 percent growth in the clinical market". The Datamonitor report goes on to say "Telehealth's Increasing Role in Healthcare, expects that the overall global telehealth market will exceed $8 billion by 2012".
It is generally recognised that this market will follow the areas of most need and highest return of investment (chronic disease programs) initially until a comprehensive picture of the benefits of telehealth and in particular, home monitoring is built up. Once this happens the general public will come on board and so the market will continue to grow. Key to adoption by the wider public will be Digital Health Records or personal health records as the case may be.
This is borne out by the fact that at present many telehealth devices are available to the genertal population (blood pressure, ECG, glucose) however data shows that market penetration has been very weak. This is due to factors discussed in the Government Policy WIKI and CAPSIL and includes things such as lack of reimbursement, lack of understanding of the benefits, interoperability etc.
Chronic Disease Programs - The Way Forward
Chronic illness is a disease or condition that lasts for a long period of time or is marked by frequent recurrence; for instance, congestive heart failure (CHF), diabetes, or asthma. According to the Information Technology Association of America E-Health Committee "Today, 45% of the American population is affected by one or more chronic illnesses. Studies show that caring for people with chronic disease consumes approximately 78% of all healthcare spending in the United States-more than $1 trillion annually" [8]. The World Health Organization. projects that chronic disease will be the leading cause of disability by 2020 and will be the most expensive problem facing healthcare systems [9]. Researchers have begun to conclude that telehealth works best with those patients who need the most frequent contact, such as those with chronic diseases [10].
Patients with chronic diseases require more frequent visits to the emergency room, incur a higher rate of hospitalizations, have a higher risk of being institutionalized, and are financially more costly than the 'average' patient. On discharge from the hospital to their homes, patients with chronic disease often need a great deal of support including compliance with medications and treatments, improved health behavior coaching, and symptom management.
Telehealth technology allows care providers to monitor the patient daily and make real-time identifications and interventions in the care of their patients. These early interventions are vital to the improvement of symptom management and reduction in unnecessary health care encounters such as hospitalization or emergency room visits. Remote monitoring can lead to better symptom management, improved health behaviors, and compliance with medications and treatments. Furthermore, the operational efficiencies created by telehealth can have a financial benefit to the care agency (often the taxpayer in the case of public health services).
Telehealth Business Models Are Not Just About Vitals Measurements
A lot of focus to date has been about getting devices that can take vital measurements (ECG, blood pressure, glucose etc) on to the market and also about getting standards of interoperability in place (see CAPSIL on Standards). However a proper business model for telehealthcare will be about much more than just vitals measurements. It is essential that telehealthcare involve regular communications be it over videoconferencing or teleconferencing or other methods. Particurlarly for older people, maintanance of the doctor/patient relationship needs to be kept as 'personal' as possible and not become a barrier to the human to human interface.
Examples of Telehealth Solutions That Preserve the Human to Human Relationship
Proactive Models of Telehealthcare
It is generally accepted that areas of disease management will be the first major opportunity for telehealthcare and telememonitoring as the business case and return of investment is strongest there at present. However the next major opportunity will be in the area of proactive or preventitive healthcare. ‘Proactive healthcare’ is concerned with learning ‘normal’ patterns of daily activity and then determining any deviations from this ‘normal’. When a deviation is detected, an alarm is raised and some action taken such as contacting a caregiver. The concept is based on early detection of events and behaviours and proactive correction, thus preventing situations from progressing and becoming acute medical conditions. For example if a person normally visits the bathroom once per night and suddenly this goes to nine or ten times, it may indicate a serious bladder condition that if acted on early, may prevent a much more serious outcome. Proactive healthcare can be based around older people, where monitoring activity (or inactivity), medication compliance, mobility or cognitive behaviours can prevent a further condition from arising and becoming acute. An example is where a person forgets to take medication or takes too much (poor eyesight for example) which can lead to diziness and ultimately a fall. However Proactive Healthcare is also about using telemonitoring for the so called 'worried well' and being an aid towards a healthier and more balanced lifestyle (which may prevent chronic diseases later in life). An example would be around weight management, where interactive sessions and feedback with clinicans and dieticians including motivational programs, may prevent Obesity.
Example of 'Proactive' Healthcare System
A newly available commercial solution aimed at monitoring home behavioural patterns for older people is the GE QuietCare system [13] which uses multiple motion detectors connected to a central ‘learning server’.
- See GE QuietCare system page for details.
Business Model Needs to Include Some Form of Assessment for Suitability
It is not a given that if someone is willing to sign up for a telehealthcare program, that they should be allowed to participate! The need for patient and environment assessment for appropriateness of home telehealth is very important if telehealth is expected to work beneficially and not cause more problems than it is intended to overcome! Further detail on this can be found in the patient and environment assessment page.
References
- ↑ Fazzi Associates. Philips National Study on the Future of Technology And Telehealth in Home Care.: Philips Consumer Healthcare Solutions., April, 2008
- ↑ Kinsella A. Home Telehealthcare: Process, Policy, & Procedure Sunriver, OR: Information for Tomorrow, 2003
- ↑ National Association for Home Care & Hospice. Basic Statistics About Home Care. NAHC Web site., 2008
- ↑ National Association for Home Care & Hospice. Basic Statistics About Home Care. NAHC Web site., 2008
- ↑ Centers for Medicare and Medicaid Services. National Health Expenditure Projections 2007-2017. CMS Web site., October, 2007
- ↑ http://www.pacehealthcare.com/
- ↑ http://www.baypines.va.gov/services/ccht.asp
- ↑ Information Technology Association of America E-Health Committee. Chronic care improvement: How Medicare transformation can save lives, save money and stimulate an emerging technology industry. Information Technology Association of America, May, 2004
- ↑ Belfield G , Colin-Thome D. Improving chronic disease management. Department of Health, UK National Health Service, March 3, 2004
- ↑ Kinsella A. Home Telehealthcare: Process, Policy, & Procedure Sunriver, OR: Information for Tomorrow, 2003
- ↑ http://www.intel.com/healthcare/ps/healthguide/index.htm
- ↑ http://www.viterion.com/web_docs/V200%20Ad.pdf
- ↑ http://www.gehealthcare.com/usen/telehealth/quietcare/proactive_eldercare_technology.html
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