Is It Time to Look Again at Telemedicine?

I WANT TO call your attention to a story in this issue (see page 49) on what could be a new business opportunity for home medical equipment providers: renting or selling equipment that monitors home patients for everything from blood glucose levels to blood oxygen saturation, heart rate, temperature and even weight.

I have pointed questions about it (more on those later). But I also see real potential for this latest breed of home medical technology to find a place in home care - and in the product offerings of HME providers. Here are the advantages I see:

First, the timing is right. With the new Medicare prospective payment system, home health agencies are being reimbursed by patient episode - not by the number and type of services provided - and so must cut costs to remain profitable. That makes HMT attractive because it can help agencies reduce the number of home visits and at the same time streamline the process of gathering, evaluating and disseminating patient data.

Second, looking at the longer-term picture, once the potential of these systems is realized and their use is accepted, HMT might make HHAs more attractive to third-party payers. It is no secret that health maintenance organizations and private insurance companies (and Medicare administrators) are increasingly interested in patient compliance data, treatment outcomes and some proof of the operational efficiencies of their home health business partners.

Third, the growth of automation is inevitable. Consider what technology has done to banking. Automated teller machines and online banking have drastically reduced the person-to-person encounters people have with their banks. And while I don't believe technology wizards will ever (or should ever) figure out how to replace people in health care, they are a legitimate force of change in how health care is delivered. Indeed, the rise of the home medical industry is itself proof that when new products are invented, new money can be made by those who see opportunity.

Now for my doubts and questions. My take on telemedicine is that it is a great idea but still too expensive and impractical to be viable. So I asked Schuyler Hoss, who wrote our story on the business opportunities presented by HMT, what made the new systems better than their unsuccessful predecessors.

The economies have changed, Schuyler tells me - and the numbers he threw my way added up. Where now each visit costs an HHA $70 to $90, the new systems could cut that cost in half. And where now an average clinician-to-patient ratio is 1:24, the new systems can monitor up to 500 patients a day. The systems themselves are also less expensive as telemedicine moves away from video-based systems to what Schuyler calls "true telemetry."

Here's another concern I have: Advocates for HMT say patients are quite willing to hook up to these machines and feel safer knowing that their vitals are being recorded on a more regular basis. Without a human on the other end of HMT, however, it makes no difference how much information is gathered electronically. Clearly, much important work remains to figure out how to incorporate HMT into current health care activities and business operations. Working this out by trial - and hopefully not too much error - might be a downside for early adopters of this technology.

The call on the HMT market is yours to make, of course, but I suggest you check it out.