Provider Strategy

Telehealth Possibilities

Adopting telehealth solutions and revenue streams can increase profits for providers.

Over the past decade, more focus has been placed on the rising costs associated with healthcare systems on a global basis. Estimates indicate that health spending in the United States is predicted to be greater than 17 percent of GNP within the next 15 years. While there is on-going debate over the concerns in the rising costs of healthcare and how to control those costs, there is generally an agreement that utilizing telemedicine will play a vital role in reducing costs, improving outcomes and lowering readmissions rates.

The key areas of focus in relationship to mobile telehealth solutions are in these areas:

Technology and prescription drugs

For several years, spending on prescription drugs and new medical technologies has been cited as a primary contributor to the increase in overall health spending; however, in recent years, the rate of spending on prescription drugs has decelerated. Monitoring compliance of medications and vital signs at home can provide valuable trending information that clinicians can use to alter protocols post discharge within days rather than weeks.

Rise in chronic diseases

Longer life spans and greater prevalence of chronic illnesses has placed tremendous demands on the healthcare system. It is estimated that healthcare costs for chronic disease treatment account for over 75 percent of national health expenditures. In particular, there has been tremendous focus on the rise in rates of obese and overweight people and their contribution to chronic illnesses and healthcare spending.

The changing nature of illness has sparked a renewed interest in the possible role for prevention to help control costs by utilizing at home monitoring for chronic illnesses such as COPD, diabetes, asthma, and cardiovascular conditions. ECG screening will become a main component for patients suffering transient arrhythmias or Afib events

Administrative costs

At least 7 percent of healthcare expenditures are estimated to go toward the administrative costs of government healthcare programs and the net cost of private insurance (e.g. administrative costs, reserves, taxes, profits/losses).

Telemedicine is a global game changer in healthcare, and this initiative is one positive step that we as policymakers are taking towards eradicating healthcare disparities. With the wide spread expansion of broadband technology, telemedicine is becoming an incredibly effective solution that is providing a new alternative to improve our current healthcare landscape. These innovations not only result in the substantial reduction of healthcare disparities, but also in a reduction of healthcare costs across the country.

Key Opportunities

These three areas, paired with a growing marketplace need for telehealth solutions equate to good opportunities for providers looking to expand their offerings. Two of the most promising telehealth markets are ones that could have a direct impact on the physician-patient relationship.

Research from Frost & Sullivan, a global business researcher identified the top 20 telemedicine markets in terms of size and most impact. Topping the list were home healthcare and disease management monitoring, and remote doctor and specialist services. Frost & Sullivan ranked the various telehealth markets using a scale of 1 to 10 that took into consideration short-term and long-term revenue opportunity, the stability of the business models and the market’s transformative potential. Home healthcare and remote services had overall scores of 8.5 and 7.6, respectively. Zachary Bujnoch, senior industry analyst for Frost & Sullivan, said home healthcare services and remote doctor and specialists services each generate an annual revenue of between $100 million and $300 million.

A March report by the Wellesley, Mass.-based market research firm BCC Research predicted that the global telehealth market was expected to double from $11.6 billion in 2011 to about $27.3 billion in 2016. It said the “telehospital/clinic market” alone was expected to grow to $17.6 billion in 2016. The “telehome segment” was expected to reach $9.7 billion by 2016.

One of factors driving the interest in telemedicine is the estimated 30 million people who are expected to become insured beginning in 2014 due to the Affordable Care Act, according to Andrew McWilliams, who authored the BCC report. McWilliams is a partner at 43rd Parallel, a Boston-based international technology and marketing consulting firm.

Practices may have a large number of patients who find it hard to come for a visit because of distance or physical limitations. Telemedicine visits may be a viable alternative to losing the business or having patients go without care.

Traditional homecare providers who are looking into possible options to expand or grow their businesses would benefit from leveraging their existing service models by offering telehealth monitoring devices and applications. With continued pressure on margins due to regulatory and funding pressures such as competitive bidding, as well as increasing costs associated with making deliveries of oxygen and other durable medical equipment, it would seem a natural evolution for the homecare provider to extend their service offerings and bill accordingly for services and products.

This article originally appeared in the May 2013 issue of HME Business.

About the Author

Ron Richard is CEO of the Americas for telehealth and remote monitoring system maker REKA Health Inc. in San Diego, and a past member of the HME Business Editorial Advisory Board. He can be reached at (858) 386-7239, or


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