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Broadband Offers a Telehealth Lifeline to Rural Hospitals

A report from a coalition of rural broadband providers says telehealth can save struggling rural hospitals by reducing wasteful expenses and improving access to care for local residents - as long as there's access to reliable broadband.

Source: ThinkStock

By Eric Wicklund

- Telehealth can save a rural hospital more than $100,000 a year in healthcare and community costs, according to a new report from a collection of rural broadband providers.

Compiled by NTCA-The Rural Broadband Association, “Anticipating Economic Returns of Rural Telehealth” anticipates that hospitals could save thousands of dollars in reduced staffing needs and reduced lab work and generate thousands more in pharmacy revenues, while also reducing travel expenses and lost wages for rural residents needing telehealth services.

All this can take place, the report states, if rural communities have access to reliable broadband –still not a given in today’s “connected” world. According to the Federal Communications Commission, roughly 40 percent of rural Americans still lack access to broadband Internet.

“The continuing advancement of telemedicine and the accrual of its potential benefits to patients, healthcare providers, healthcare facilities and the communities that house them will not be possible without high-quality, reliable broadband infrastructure,” Rick Schadelbauer, the report’s author and the NTCA’s manager of economic research and analysis, writes. “Moreover, this infrastructure must include both high-capacity fiber-based networks and a complementary layer of fixed and mobile wireless networks.”

“Highly advanced, state-of-the-art telemedicine applications - including some not even yet developed - can only be possible when accessed via a high-speed, reliable broadband network,” he adds. “This is particularly critical in rural America, where the highest potential benefits from telemedicine - and the greatest challenges to deploying broadband - can be found.”

READ MORE: Broadband: The Missing Link to Rural Telehealth Success

The 24-page report, unveiled at a March 29 Foundation for Rural Service telehealth forum in Washington D.C., makes an argument for telemedicine and telehealth in reducing waste and leading to more efficient care. Schadelbauer notes that the U.S. spent 16 percent of its Gross Domestic Product on healthcare in 2015, at $9,450 per capita, and federal estimates say that figure will continue to grow by 5.6 percent per year through 2025.

“Slowing or even reversing this trend will require a multifaceted approach that will combine more efficient expenditure of healthcare dollars and reducing the need for healthcare through encouraging healthier lifestyles and giving consumers greater control over their own health,” he writes. “One possible piece of the eventual solution that will address both of these objectives is increased deployment and adoption of telemedicine technologies.”

In its report, the NTCA finds disparities between urban and rural residents due to demographics and limited access to healthcare. Rural Americans tend to be older, the report notes, and have lower average incomes, so they’re more susceptible to chronic issues, less likely to have insurance and less likely to practice health and wellness guidelines that prevent illness and help detect health problems earlier.

This also affects rural healthcare providers. While roughly 15 percent of the nation’s population live in rural areas, only 10 percent of its doctors live and practice there. For specialist care, the ratio of 134 specialists per 10,000 residents in urban areas drops significantly to only 40 per 10,000 in rural areas.

“Put simply, the economics are stacked against rural hospitals,” writes Schadelbauer, who notes more than 70 rural hospitals have closed down since 2010 and another 670 – representing more than a third of the nation’s rural facilities – are in danger of closing. “As one physician observes, ‘You don’t have the volumes. You still have to provide the same quality. You still have to buy the same equipment. You don’t have the economy of scale on the equipment, so your overhead is more and your reimbursements are less.’”

READ MORE: Tying Telehealth to Better Rural Health Outcomes

In that light, the report says the nation’s telemedicine industry – now standing at more than 200 networks and 3,500 service sites – has the potential to significantly impact rural healthcare services and providers. The NTCA estimates a telehealth platform could save a rural hospital roughly $24,000 a year in travel expenses and $16,500 in lost wages for patients and $61,500 in hospital costs, mostly tied to physician salaries.

In addition, the report estimates that a rural hospital could save, on average, more than $100,000 a year in lab work while adding more than $40,000 a year in increased pharmacy revenues.

In terms of challenges, the NTCA report lists reimbursement, cost of equipment (though much of that is tied into upfront, one-time expenditures that can be offset by cost savings over time), patient data privacy and security and licensing.

And, of course, broadband access.

“One particularly critical, but often overlooked, piece of the equation is the need for high-quality, reliable broadband service,” Schadelbauer concludes. “Particularly in rural areas, with lower population densities, rugged topography and greater distances between customers, this can be challenging due to the higher costs to serve.”

READ MORE: The Benefits and Challenges of Telehealth for Specialists

“But more and more, fiber-based broadband is being deployed throughout the country, which will enable the adoption of such life-changing technologies as telemedicine. And if the myriad challenges to rural health outlined in this paper are to be addressed in any substantial manner, then telemedicine solutions, built upon a foundation of reliable, future-proof, fiber-based broadband infrastructure, will be a significant part of the solution. Further involvement in, and expansion of, that infrastructure is a critical need for our nation.”

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