Healthcare / Technology

Telehealth Series: Cutting Costs and Making Payments


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According to Senator Brian Schatz of Hawaii, who spearheaded the Creating Opportunities Now for Necessary and Effective Care Technologies for Health Act (CONNECT), “telehealth is the future of health care.” The CONNECT for Health Act has been designed with the purpose of saving money and increasing access to health care by slimming down regulatory measures and increasing Medicare reimbursement towards telemedical services. Senator Schatz’s bipartisan bill is a threefold measure meant to promote the expansion of telehealth within mainstream health care. The first part of the bill establishes a “bridge” program that allows doctors who are already involved in the Merit-based Incentive Payment System (MIPS) to apply for waivers exempting them from telehealth related Medicare restrictions. In conjunction CONNECT to Health would ensure coverage for remote monitoring of patients with chronic conditions and give exemptions to participants using alternative payment methods such as Affordable Care Organizations (ACOs). These willing coalitions of health care providers who have come together to improve quality and coordination of care while receiving Medicare reimbursement benefits for cutting these costs. This pending legislation is indicative of the need to revisit and address the way telehealth is handled in the contemporary health care system.

Telehealth reduces the cost of care and the burden patients carry. Using this method of healthcare delivery is beneficial to the patient since it prevents them from being absent from work and having to travel to appointments. With the burden of expensive health care practices in place, requiring patients to miss work for doctors appointments is often times not an option, especially for low-income families. With the average cost of an in person physician visit costing between 136-176 dollars, continually missing work, paying for transportation as well as doctors visits can cause a large financial burden on families.


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However, a typical telehealth consultation is only ~45 dollars. At around one third the cost of a traditional visit, using telehealth services is the obvious choice to cut costs stemming from visits to health care professionals. Unfortunately, even with all of the potential benefits of telehealth, the American Health Care system is apprehensive to adopt this method of treatment.


One major barrier to increasing the use of telehealth is a lack of training and education by physicians. In a recent poll, 78 percent of family physicians acknowledged the benefit patients receive with telehealth service to widen the area in which he or she can treat. But, 54 percent cited a lack of training and knowledge about the processes involved in using this technology. [1] Education is the first key to increasing the prevalence of telehealth within the American Health Care Delivery system.

Additionally, 53 percent of surveyed physicians stated that inadequate reimbursement policies deterred them from integrating telehealth into their realm of services. Reimbursement policies vary from state to state, however many states allow independent insurance companies to create their own policies on reimbursing for healthcare. Depending on the location of the patient and the doctor, telemedicine may be anywhere between fully embraced on a state level to having no regulations at all. New Jersey for example has no regulations with reimbursing telehealth services, other than occasionally allowing for telepsychiatry services. In other localities, reimbursement can be based on location relative to care facility, but these are often set beyond 50 miles, an incredibly long distance to travel just to see a doctor.

Action must be taken to encourage the growth of telehealth in the U.S. Using technologically advanced methods of patient-physician consultation is not only fiscally responsible, but it has the potential to negate a large portion of the health care disparity associated with living in a rural setting. Physicians need to be actively encouraged to receive training on telehealth services. It is critical that qualified physicians are aware of how to take advantage of telecommunications in respect to healthcare. By increasing training for doctors who already serve these at risk populations, a greater ease of access to healthcare will ensue and unnecessary hospitalizations will decrease.

While training is a critical component to ensuring the propagation of telehealth, providing adequate reimbursement is a major factor that must be addressed. Physicians need to know that, in some form, they will be compensated for the treatment they provide via telehealth. States must recognize this as an important development for the future of healthcare. Telehealth has the potential to alleviate major failures within the contemporary healthcare system, but advancements will not be made without healthcare professionals feeling confident about financial compensation. States must allow for telehealth reimbursement by Medicaid. CONNECT to Health will increase access to health care by patients out of reach of traditional health care and cut medical spending. This is a lower cost alternative to in-patient treatment and often prevents longer, more expensive treatment and hospitalization further down the road. Additionally, creating a smaller radius for reimbursement from care centers would increase the amount of patients who use telehealth services, fighting geographic biases and cutting the frequency of in person visits to health care providers. Through creation and adoption policies like CONNECT to Health conducive to its use has the potential to alleviate many of the major issues facing the contemporary healthcare system.

[1] Statistics generated from a report by The Robert Graham Center.