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Health-Care Payer Systems Inhibiting Telemedicine

Head of group promoting telemedicine lists trends in that area

For health-care providers to move away from reimbursement and fee for service payment systems would enable those providers to increase the use of telemedicine as an integrated part of the delivery of care, the head of an organization that promotes the use of advanced remote medical technologies tells Government Video.

Nate Banks, standing on the left, the domiciliary chief at the Department of Veterans Affairs’ Washington (D.C.) Medical Center, demonstrates that hospital’s telehealth system. VA medical centers are reported to be in the lead at using telehealth.

The growth of telemedicine has been “really slowed up” because of the hesitancy—particularly by the Centers for Medicare & Medicaid Services and other payers—to include telemedicine in the fee for service model, said Jon Linkous, the American Telemedicine Association’s (ATA) CEO.

The payers are afraid that if patients get greater access to health care through telemedicine, there will be abuses resulting in a lot of fees, he said. However, if telemedicine is used on the basis of patient outcomes, it becomes the way the healthcare system wants to deliver care and payment is not based on whether a telemedicine system was used or not, Linkous said. “That’s our sweet spot, because health-care institutions that have had that freedom—for example the Department of Veterans Affairs—have turned to telemedicine in large part because it delivers a quality of care,” he said. Moving away from fee for service is among several telemedicine market trends Linkous predicts for 2012. Some of the others are:


Outsourcing of medical images—X-rays and the like—is now so common that many hospitals do not use the term teleradiology. Providing 24/7 services by a radiologist—or “teleradiology where needed”—may be the first part of telemedicine to become a true standard of care.


Independent diagnostic testing facilities have been around since 1998, and now, a relatively new and related market is the use of private firms of medical specialists to provide remote clinical consultations. A series of vendors have appeared who are focused on stroke care, mental health, hospitalist and intensivist services and dermatology.


Mercy Hospital’s plan is to build a $90 million virtual care center near its Chesterfield, Mo. headquarters. The specialists will be located at a single location and serve patients in outlying centers across Arkansas, Kansas, Missouri and Oklahoma. On a smaller scale, Inova Health System in Virginia has intensivists based at a corporate office building where they provide remote services to 122 beds throughout northern Virginia. Other health systems are watching those programs, and, if successful, might start their own virtual centers.

However, while Linkous sees telemedicine programs growing during 2012, widespread use of telemedicine is still going to be “a gradual process,” he said. “Right now 73 million patients are under managed care—that’s a large number, but when you’re talking about 300 million people, we still have a ways to go.”