Telehealth: Are We Ready for Better Healthcare at a Lower Cost?

by Naresh Menon

Healthcare, specifically its cost and equitable delivery, is perhaps the most significant domestic social and political agenda of our times. According to the Centers for Medicare and Medicaid (CMS)[1], healthcare-related costs was 17.9% of US GDP (~$3.5 trillion dollars) in 2017. In a recent analysis by Fortune[2] U.S. healthcare costs are projected to become 19.4% of GDP by 2027. While we have the most innovative healthcare system in the world in terms of discovering new treatments, we are ranked 27th in the world when it comes to overall healthcare outcomes[3]. To put things in perspective, we have the most powerful military in the world, and it costs us only 3.1% of our GDP. There are a number of reasons contributing to this massive disparity between investments in research, cost of care and outcomes and parsing that is beyond the scope of this article.

So where are we headed into the future?  Is there any hope for us to get quality healthcare at a reasonable cost?

Telemedicine/telehealth represents a growing sector within healthcare which has the greatest promise to bend the cost curve while providing better health outcomes. It intends to transform the current paradigm of care delivery through innovative internet-enabled technologies. According to the New England Journal of Medicine, [4] Telehealth is defined as “the delivery and facilitation of health and health-related services including medical care, provider and patient education, health information services, and self-care via telecommunications and digital communication technologies. Live video conferencing, mobile health apps, “store and forward” electronic transmission, and remote patient monitoring (RPM) are examples of technologies used in telehealth.” While some draw parallels to the holographic doctor in the 1990s T.V. series Star Trek, telemedicine is no longer science fiction. An example of a deployed telehealth solution is Project ECHO (Extension for Community Health Outcomes) that is currently in 130 sites in the U.S. as well as in 23 countries. Started in New Mexico by Sanjeev Arora M.D. in 2003, the goal of project ECHO was to extend access to specialists in the care of patients in remote locations, especially in rural areas. This resulted in reducing wait-times to see some specialist from 8 months to 2 weeks while also lowering the cost burden on the healthcare system and dramatically increasing the health and satisfaction of patients![5]

In every instance where telehealth solutions have been deployed, access to care immediately becomes more equitable, easy to get to, and less expensive. More excitingly, over the long run, with data gathered from individual patients, dramatic improvements in health outcomes are possible as it enables personalized medicine through artificial intelligence and machine learning.

The vision of the Affordable Care Act, the largest change to our healthcare system in 30+ years, was to move our entire healthcare model away from fee-for-service to evidenced-based care. In this paradigm, digital health is a critical component – starting with electronic medical records to link payers, providers, and patients seamlessly with data. While a number of states and private payers are investing, innovating and deploying telehealth-based care, there are many social, political and legal barriers that are continuing to prevent telehealth from reaching its full potential of providing Americans with cost-effective quality healthcare. It is important to emphasize that the barriers are not in technology! Here are some.

Resistance from incumbents: The current healthcare system is a physician and provider (hospital, clinic) centric model. This model ensures that a patients’ visit is private, safe, and secure. A physician, in addition to looking at objective data such as lab results, vital signs, and other measurements, also relies on subjective cues that have been honed from decades of training. Telehealth platforms disrupt this normal physician-patient interaction. Furthermore, physicians need to be re-trained on how to interact with patients who are at a remote location. What kind of video streaming is needed? How to perform a virtual patient examination? How does one keep this private? What are the liabilities involved? These are some of the questions that are being raised and actively debated.

Non-uniform national legislation: Because of the hesitation among care providers towards adopting telehealth, policymakers are at a loss on structuring workable rules and legislation around telehealth. A number of state-level pilots are ongoing around the country to determine what works best. These are, however, very ad-hoc local attempts occurring through regional grants with a focus on care accessibility and not so much on savings to the payers. As a result, the data and the lessons learned are spotty and un-coordinated.

Poor re-imbursement: Because the various pilot studies are not measuring true costs and accurately capturing return on investments (ROI), current re-imbursements for telehealth are a miniscule fraction of a physical visit. Neither the physicians, providers, or telehealth technology delivery organizations are able to capture sufficient and sustainable revenue. While a remote visit does cost less than a physical visit, the providers have locked in costs with their current infrastructure that is required to support a traditional physical visit. As a result, unless reimbursements are made higher at least on the outset initially, there is a disincentive to adopt telehealth.

Individual preference: Without elaborating this extensively, some people prefer to have a physical visit no matter how easy, convenient, or cost-effective a virtual visit may be. This is especially true in the generation group that is not digital-natives. The problem is compounded because individuals with insurance do not see the full cost of care, and this lack of transparency does not create any incentives to change to a lower-cost delivery model.

There are a number of organizations, including ours ( that are working on making telehealth a reality by focusing on reducing the friction in adoption, access, and cost. We work directly with the U.S. Department of Defense to address their needs for easy and rapid enrollment and verification of wounded warfighters and civilians at the point of need using a unique and dual secured biometric scheme. This technology is also making access to telehealth solutions frictionless in multiple civilian care delivery settings in the Los Angeles area.

The promise of telehealth in terms of reducing cost for better care is real. The adoption can be accelerated once we have a more focused national-level effort that is based on evidence gathered from the multiple pilots that have occurred/occurring around the nation. It is this authors belief that we are at a tipping point where a radical shift towards telehealth centric healthcare system is inevitable. But in this current political climate, we may have to be patient.







Related Articles