Adopting telehealth solutions and revenue streams can increase profits for providers.
- By Ron Richard
- May 01, 2013
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
The key areas of focus in relationship to mobile telehealth solutions are in
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
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.
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.
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 email@example.com