Page 2 Shaping Your Telehealth Strategy 2014 Ernst & Young LLP

Understanding What is telehealth? Defi ning the terms
the value proposition Telehealth is defi ned as the use of technology “real time,” through video conferencing or

With telehealth technologies, providers can deliver to deliver health care, health information or 2) asynchronously, or “anytime,” through
quality care at a lower cost, a critical imperative in health education at a distance. Sometimes store-and-forward technology that transmits
the accelerating era of value-based payment. Other referred to as telemedicine, e-health or digital information for later response.
key benefi ts are profi led below. e-medicine, telehealth is the all-inclusive
term for the world of virtual care delivery. Real-time telehealth can closely resemble
a typical clinic visit, the difference being
Increasing access to care and reaching Telehealth communication is used in two that patient and physician are not in the
new markets settings: between a health care provider and same location. Store-and-forward telehealth
In enabling virtual consultation regardless of a patient in a different location or between is typically used for monitoring patients
geographic location, telehealth is perceived two clinicians where one provider wants to remotely and managing chronic disease,
as a way to increase patients’ access to care — consult with or have the patient consult with a where patient and physician, or physician
particularly for those who live in rural and specialist in another location. Communication and physician, do not require face-to-
underserved areas. Also, as more seniors and can take place 1) synchronously, or in face communication.
patients with chronic diseases choose to remain
at home rather than entering a care facility,
telehealth can be a vital link in cost-effective health
care maintenance. Advancing patient-centered care of US hospitals have telehealth capabilities, noting
that state policies requiring reimbursement at
Telehealth can also give providers a competitive Through remote monitoring, automated follow-ups the same rate as face-to-face services increase
and readily accessible communication channels,
advantage by enabling them to reach new markets. providers are empowered to deliver the support the likelihood that providers will adopt telehealth
Because the digital realm is global, providers and guidance that many patients need as they programs. Teaching hospitals, those equipped with
leveraging telehealth can connect with patients go through the day-to-day healing process. additional advanced medical technology, larger
in remote areas and global markets. Patients who Continuous connection can ensure that patients health care systems and nonprofi t organizations
begin with a virtual exam and diagnostics may are following their treatment plans as well as are more likely to offer telehealth services.
develop relationships that could lead to direct modifying for any needed adjustments.
care activities. Medicare
Medicare pays for some telehealth services,
Reducing emergency room visits especially in remote rural areas, but has several
and hospitalizations Overcoming restrictions. The patient must be located in an
Telehealth can help improve treatment compliance the obstacles eligible location and in an eligible facility, and
through daily monitoring and early care team must be seen by an eligible provider for an eligible
®
intervention to address problems before they While other industries have readily transformed Current Procedure Terminology (CPT ) billing code.
become acute. The Federal Communications their business models with internet, mobile Medicare reimburses the facility a small “facility
Commission reports that remote patient technology and other digital advancements, the fee” that is adjusted regularly. A signifi cant portion
monitoring for such chronic conditions as heart health care industry has proceeded carefully. of telehealth services are store-and-forward rather
disease, pulmonary disease and diabetes could High investment costs and uncertain return on than real-time, but Medicare generally covers only
save $197 billion nationwide over 25 years. investment have created a tenuous economic real-time services.
model for digital expansion. The health care
Enabling collaboration and industry also faces other unique obstacles, Medicaid
optimizing resources profi led below. According to the National Conference of State
In the push for care delivery to become more Legislatures (NCSL), the most common route
integrated, telehealth offers a prime channel for Navigating reimbursement challenges states are taking is to cover telehealth services in
multiple providers to communicate within a single Limited reimbursement continues to be a the Medicaid program. To date, 43 states and the
episode of care, while centralizing all available major barrier to telehealth expansion, although District of Columbia provide some form of Medicaid
data, reducing repeated tests and streamlining telehealth payment policies are evolving nationally reimbursement for telehealth services.
data collection. It also enables greater use of (see Exhibit 1) and state by state (see Exhibit 2).
scarce clinical resources, bridging the gap between A recent study (“Telehealth among US hospitals,” Private payers
clinician supply and patient demand. Health Affairs, February 5, 2014) fi nds that 42% As with Medicaid, regulations for telehealth
reimbursement by private payers are set by the

2 Health Care Industry Post News and analysis of current issues affecting health care providers and payers