First Consulting Group issues report on Telemedicine in the Ambulatory Setting

New York 28 March 2007First Consulting Group (FCG), a United States health care IT consulting firm, has published new research that describes in detail how telemedicine can help expand the patient capacity of health care providers and cut costs for both patients and care providers. Key findings in this FCG white paper state that experts have predicted that the United States will face a shortage of over 100.000 doctors by 2020 and that remote consultations can save time and money for both patients and practitioners, and can be conducted using widely available consumer technology such as digital cameras and webcams. According to the National Association for Home Care and Hospice, more than half of 8000 home care agencies that accept Medicare already use remote monitoring technology. The report also points out that during a study of telemedicine in Arkansas, 94 percent of the patients were saved a trip of over 70 miles to reach their physician.


There are three major drivers to adopt telemedicine. The first one is the need to efficiently manage patients with chronic diseases such as cardiovascular disease, cancer, chronic obstructive pulmonary disease (COPD) and diabetes. The report shows how telemedicine can help to establish a continual feedback loop between patients and clinicians across multiple disease states in order to enable active ways of prevention.

The second driver constitutes the need to improve access to care in geographically remote areas and increase efficiency which threatens to become limited due to insufficient capacity on the care providers' site. In this regard, telemedicine can help expand capacity in two ways, according to the report. First, the time and resources that are saved by telemedicine, can free practitioners to see more patients in a given time period. Second, improved communication can enable providers to make more timely adjustments to care plans, which ultimately reduces the number of hospitalizations and subsequent office visits, thereby creating new capacity.

The value of empowering patients constitutes the third driver to implement telehealth services. Numerous studies have shown that patients who are "in the loop" of managing their health tend to make better choices regarding the care and services they consume, and are more attentive to the health management recommendations of their physician. The use of telemedicine can further reinforce patients' self-management by integrating self-monitoring into their daily activities.

The FCG report reviews the opportunities for health care providers in the two main areas of telemedicine which are remote consultations and home monitoring. The technologies needed to provide remote consultations are affordable and require only limited technical proficiency. Electronic mail and clinical messaging tools are usually sufficient for simple tasks such as fielding clinical questions, requesting prescription renewals and communicating laboratory test results, according to the FCG researchers.

For consultations that require more interaction, patients and providers can use internet-based videoconferencing, live chat, or even the telephone. Mental health visits, for example, lend themselves to this approach because they typically consist of a patient interview with little to no need for physical examination. The report stresses that successful telemedicine programmes have already been implemented using common consumer electronics, such as broadband or DSL internet connectivity, webcams, televisions and Bluetooth wireless devices.

In the case of remote monitoring, special devices are used to gather data about a patient's condition and report it electronically to a provider to be reviewed. The aim of this practice is to give caregivers much more frequent information about how patients are doing, permitting earlier detection of changes requiring a response, as the report states. Forrester Research predicts that by 2015, 12 percent of all seniors, 40 percent of all chronically ill, and 60 percent of all patients discharged after a lengthy hospital stay will be directed to these types of programmes.

The white paper mentions two major challenges for implementing remote monitoring: the set-up in the patient's home is labour intensive and special applications are required to receive, analyse and view the results. In addition, cost is an important concern, as monitoring chronic conditions can be expensive. Most home monitoring devices sell for $2000-$3000, or can be rented for $50-$150 per month. The researchers warn that these challenges, along with lack of reimbursement, have hindered widespread adoption by health care providers in particular. In summary, one could say that remote monitoring yields different benefits for different patient populations and much remains to be learned about how to apply the technologies most effectively.

The FCG report continues with the overall question of reimbursement and states that at the national level, the case for reimbursement is strong. The researchers have projected that the use of telemedicine could reduce the national cost of hospitalizations from $8 billion to $4,2 billion per year, and this for congestive heart failure (CHF) patients alone. At the provider level however, despite individual success stories, the return on investment is more compelling for home care than for primary care. Still, reimbursement from private payers is becoming more prevalent, says the report.

One remarkable initiative at the employers' level is the Continua Health Alliance for the purpose of making the delivery of medical care via telemedicine universal and interoperable. Although reducing technical barriers to telemedicine is the primary aim of this employer coalition, one of the expressed core activities of this group is also to work with payers and providers to extend reimbursement to the connected health care model, according to the FCG white paper, which also mentions other stakeholders with a financial interest in telemedicine such as pharmaceutical companies and biotech manufacturers.

Ultimately, there are three basic factors to determine whether to reimburse for telemedicine services, according to the report:

  1. What are the health outcomes of using telemedicine services?
  2. Will the costs of reimbursing for - and/or directly investing in - these technologies reduce the cost of care for these patient populations?
  3. Does telemedicine increase the overall satisfaction and quality of life of patients/members?

The FCG researchers in their report are proposing a sample telemedicine programme development methodology in five phases for health care organisations that plan to start up a telemedicine service. They stress that successful telemedicine programmes need to be integrated with a health care organisation's existing clinical processes and preferably need to be built following the logical five steps of opportunity analysis, prototype development, trial testing, transition, and formal programme set-up. More information about the report "Telemedicine in the Ambulatory Setting: Trends, Opportunities and Challenges" is available at the First Consulting Group web site.

Leslie Versweyveld

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