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6 Factors Behind Telemedicine’s 2016 Surge

Telemedicine

Telemedicine is experiencing rapid growth not only in the United States but in other countries as well, including Mexico where a city-based specialist consults with a patient in a rural clinic in this photo.

Gradually picking up momentum over the last decade, telemedicine seems poised for robust growth in 2016. Fueling its expansion this year are several trends, some of which were identified recently by Nathaniel M. Lacktman, a partner and health care attorney with the law firm of Foley & Lardner LLP in Tampa, Florida.

Lacktman expects telemedicine to play a key role “in the health care industry shift to value-based care as a way to generate additional revenue, cut costs, and enhance patient satisfaction.” It also offers a cost-effective way to bridge the growing gap between the ever-increasing demand for demand for health care services and the resources available to meet that demand.

Generates Added Revenue

Helping to accelerate telemedicine’s growth and acceptance within the health care sector is the realization that this innovative form of health care delivery neither creates a financial strain nor relies upon grant funding. A growing body of evidence exists to show that sustainable telemedicine arrangements “generate revenue, not just cost savings, while improving patient care and satisfaction.”

Lacktman points to research conducted by the American Telemedicine Association that shows telemedicine creates savings for patients, providers, and insurers when compared to traditional health care practices. Deployed judiciously, telemedicine can significantly cut down on the frequency and duration of hospital stays, as well as visits to the hospital emergency room.

And telemedicine is not just altering the health care landscape in the United States but also in other countries. A report issued in May 2015 by RNCOS, a business consultancy service, predicted that the global market for telemedicine technologies, including hardware, software, and services, would grow at a compound annual rate of 18.4 percent through 2020. In 2014, this market was valued at roughly $17.8 billion, according to RNCOS.

1. Reimbursement

At the top of the list of trends that Lacktman expects to drive telemedicine’s expansion in 2016 is the growing realization by both private and public payers that telemedicine services deserve to be reimbursed in the same way as health care services provided in traditional fashion. While many insurers have decided on their own to treat telemedicine and traditional health care services on an equal basis, state and federal lawmakers are increasingly moving to ensure parity by passing laws that mandate it.

Telemedicine

More health care providers appear to be recognizing telemedicine’s potential for cutting costs and reducing costly and time-consuming duplication of services.

In its most recent report on “State Medicine Gaps Analysis: Coverage & Reimbursement,” released in January 2016, ATA reports that 28 states and the District of Columbia have passed full parity laws. These laws require that private insurers cover and reimburse for telemedicine services just as they would for comparable services delivered the old-fashioned way. Lagging somewhat behind are state laws governing the way that Medicaid and state employee insurance cover and reimburse for telemedicine services.

Medicare has been somewhat slow to cover telemedicine services, but a bill now pending before Congress could significantly speed up that process. Introduced last year in the House, the Medicare Telehealth Parity Act of 2015 (H.R. 2948) sets a schedule under which Medicare would incrementally increase its coverage of telemedicine services.

2. Growing Internationalization

Also fueling the expansion and acceptance of telemedicine in this country is the growing global network of telemedicine arrangements. Lacktman predicts that more American health care providers and hospitals will establish working relationships with foreign health care institutions in 2016. According to data from the ATA, more than 200 U.S. academic medical centers already offer video-based consultative services in countries outside the United States. In addition to distributing U.S. medical expertise abroad, these ties give U.S. providers access to more patients and also broadens their revenue base.

3. Continued Momentum at State Level

As already noted, a number of state legislatures have already taken action to create parity between the coverage and reimbursement of telemedicine services and those provided in the traditional in-person setting. However, progress is being made at the state level on other factors relevant to telemedicine. Increasingly, state legislators and regulatory agencies are writing practice standards and licensure regulations designed to promote telemedicine growth. While much remains to be done, the growing public demand for telemedicine health care solutions will likely increase the pressure on state lawmakers and regulators to act sooner rather than later.

4. Employer Health Centers, Retail Clinics

Lacktman cites a recent Towers Watson study showing that more than 35 percent of employers with onsite health centers already offer telemedicine services. The same study found that an additional 12 percent of employers plan to offer telemedicine services through their in-house health facilities over the next two years. Lacktman also points to other studies that indicate nearly 70 percent of all U.S. employers will offer telemedicine services as an employee benefit by 2017. Helping to fuel this expansion at the corporate level is the growing number of nationwide telemedicine providers that offer services specifically tailored to meet the unique health needs of employers and their employees.

Although retail medical clinics are nothing new, an increasing number of them are augmenting their services to include consultations and diagnostics facilitated by telemedicine. And health consumers have demonstrated a willingness to pay out of pocket for telemedicine services when those are not yet covered by their health plans. Lacktman notes that CVS Health and Walgreens, both of which already operate in-store clinics at many store locations, plan to expand the services offered at those clinics to include telemedicine.

Telemedicine

The increasing sophistication of telemedicine technologies expand its versatility and enhance its appeal to health care providers.

5. ACOs and Telemedicine

Accountable Care Organizations are groups of health care providers, including physicians, hospitals, and others, that voluntarily join together to offer closely coordinated, high-quality care to Medicare patients. The rationale behind the ACOs is the recognition that close coordination between all members of the ACO helps to prevent the duplication of services that all too often drives up overall health care spending. Lacktman believes that telemedicine is an ideal fit within the ACO paradigm and offers a way for these organizations to further cut costs.

To encourage the cost reductions ACOs are designed to achieve, the Centers for Medicare and Medicaid Services offers incentives to those organizations that meet certain goals. In 2014, notes Lacktman, only 27 percent of all ACOs saved enough to qualify for those incentives. He also notes that only about 20 percent of all ACOs are using telemedicine services, a figure he believes will increase substantially as more ACOs realize how telemedicine can help them further reduce their costs.

6. Improved Technology

Although it isn’t cited specifically on Lacktman’s list of trends driving the growth of telemedicine, technological advances in the software and hardware that facilitate such services are certain to improve the quality and precision of care telemedicine provides. Already robotic diagnostic devices in rural health clinics enable medical specialists hundreds of miles away to closely examine patients in dire need of expert care. As the technology behind telemedicine improves, the demand for its use — both from patients and health care providers — almost certainly will increase.

If you’d like to read additional articles about telemedicine and other topics of interest to health consumers, check out our blog.

Don Amerman is a freelance author who writes extensively about a wide array of nutrition and health-related topics.

Don Amerman has spent more than three decades in the business of writing and editing. During the last 15 years, his focus has been on freelance writing. For almost all of his writing, He has done all of his own research, both online and off, including telephone and face-to-face interviews where possible. Don Amerman on Google+