Reining in costs while improving care
Reducing healthcare costs while improving patient care is a common goal and continuing challenge for the industry, and there’s a lot of room for improvement. The United States has the most expensive healthcare system in the world, but is last or near last on dimensions of access, efficiency and equity, according to The Commonwealth Fund’s 2014 international healthcare review.
A number of initiatives are being pursued, among them accountable care organizations (ACOs), telehealth and bundled payments, but their implementation carries its own set of challenges.
If all currently deployed telehealth applications were to replace physician, emergency department, and urgent care visits today, it would save $6 billion annually in healthcare costs, according to a study by global consultant Towers Watson.
“While this analysis highlights a maximum potential savings, even a significantly lower level of use could generate hundreds of millions of dollars in savings,” says Allan Khoury, MD, a senior consultant at Towers Watson.
Senior healthcare executives are optimistic about telehealth’s ability to cut costs and improve outcomes, but agree that progress has been impeded by reimbursement and regulatory challenges, according to a recent survey by Foley & Lardner LLP.
Forty one percent of respondents said they do not get reimbursed at all for telemedicine services; and 21% reported receiving lower rates from managed care companies for telemedicine than for in-person care.
That’s changing somewhat, notes Nathaniel Lacktman, JD, partner in Foley & Lardner’s Health Care Practice. Currently 22 states plus the District of Columbia have enacted laws requiring health insurers to cover telemedicine services, and there’s widespread bipartisan support for telehealth-specific regulations. One example is the Medicare Telehealth Parity Act of 2014, introduced last summer, which proposes a three-phase rollout of changes to the way telemedicine services are reimbursed by Medicare and expands coverage to urban areas.
Secondary obstacles include licensure and scope of practice barriers, and the need for providers to better understand that there are models and approaches available to build out telemedicine programs, Lacktman adds.
Nine out of 10 health plans, looking to harness their payer networks, are pursuing telemedicine programs, says Lacktman. As a way to overcome current challenges, Lacktman suggests that managed care executives “seek out ways to partner with providers under risk sharing or subcapitated arrangements to promote and incentivize telemedicine as a key tool to manage population health of their subscribers, reduce acute inpatient stays, and improve quality care.”