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Has Telemedicine Proven its Value?

As Congress prepares to debate the CONNECT Act, some are wondering whether new technology is driving up healthcare costs rather than reducing them.

By Eric Wicklund

- Does telemedicine increase healthcare costs rather than reducing them?

A recent meeting of the Medicare Payment Advisory Committee raised that question, during a discussion of why more doctors aren’t using the technology. One theory is that telemedicine is making it easier to access healthcare services – therefore, more people are using it unnecessarily, for complaints or conditions that would simply cure themselves over time. That theory also questions whether the convenience of telemedicine would drive doctors to seek more consults than they need.

The argument is similar to one recently made by the RAND Corporation, which wondered whether the convenience of retail clinics was leading to unnecessary use.

MedPAC members pushed back against the argument, saying telemedicine will increase access to healthcare and reduce overall expenses over time by cutting back on high-cost ER visits, hospitalizations and imaging costs, among other things.

"If telehealth suppresses some of those costs, the incremental increase in telemedicine may be good," Craig Samitt, MD, MBA, told the committee, in a story reported by the AAFP.  "I think we are being overly conservative. We should be embracing the use of technology faster in the industry. Our payment system should not suppress progress."

The independent advisory committee’s discussion may figure into the upcoming debate over the Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act.  The bill, recently submitted by Sens. Brian Schatz (D-Hawaii) John Thune (R-S.D.), Mark Warner, (D-Va.), Roger Wicker (R-Miss.), Thad Cochran (R-Miss.) and Ben Cardin (D-Md.), seeks to boost Medicare support for (and reimbursement of) telemedicine, and comes with a healthy list of supporters.

Opponents have pointed to the price tag that comes with the proposed legislation – one estimate placed the bill at $1.1 billion, with projected cost savings of $1.8 billion. That may prompt the Congressional Budget Office to rate the bill as an increased cost, which Congress would then use to defeat it.

Congress might also look at a 2014 MedPAC survey that found that less than 1 percent of physicians accounted for 22 percent of telemedicine services, only 6 percent of those services crossed state lines, and just 2 percent of patients had a telemedicine consult more than once per month. In all, the study found, only 69,000 patients used telemedicine in 2014. In addition, the AAFP estimated that only 15 percent of its member physicians used telemedicine in 2014.

Likewise, a 2015 study by the Agency for Healthcare Research and Quality saw mixed results in the effectiveness of some 44 telemedicine platforms. In a draft report, the AHRQ noted that telemedicine hasn’t been validated enough to permit legislators to draft policies or standards supporting its growth and value.

“Going forward, research should be conducted in emerging models of care, particularly value-based models where use of telehealth may improve the ability to share risk and attain quality and related outcomes,” the draft report concluded. “These studies of telehealth should consider combinations of applications of telehealth and outcomes that are important in these new models and evaluate the specific contribution telehealth can make in these contexts.”

In their discussion, MedPAC members suggested measures that might improve the value of telemedicine, such as supporting programs that target specific populations (chronic diseases, stroke victims, hemodialysis patients) or paying primary care physicians a flat monthly fee to encourage managed growth in telemedicine services. 


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