Study: Medicare, Insurers Reluctant to Pay for Telehealth
Sam Burgiss, former head of the University of Tennessee Telehealth Network, remembers how videoconferencing changed one patient's life.

He lived alone and had congestive heart failure. Every quarter, he'd spend several days in the hospital, but, in 1998, nurses started monitoring him through videoconferencing. Through remote monitoring equipment, blood cuffs, scales and patients themselves can send information through the Internet.

This patient held instruments up to a camera for nurses to read, and over the following year, he ended up in the hospital just once, for a 24-hour observation.But despite such advances, remote patient monitoring is far from routine.

Monitoring patients' vital signs from afar could save money and lives, but for the most part, remote monitoring equipment is too expensive, too hard to use and doesn't integrate well with current infrastructure. That's according to a recent study by Spyglass Consulting Group, based on interviews with over 100 clinicians and administrators, at organizations most likely to do remote patient monitoring, including hospitals and home health agencies.

Among organizations using remote patient monitoring, 71 percent used government grants to subsidize deployments, and most interviewees said their organizations would probably not recoup money spent to install remote patient monitoring. Health care organizations make more money from so-called "acute" care provided when patients are in the hospital. Often, the rates that providers are paid for preventive care do not cover its costs.

Though patients like the remote monitoring systems, they are unwilling to pay the estimated $150-per-month for them. Nor, for the most part, are Medicare or health insurance companies willing to pay. Extrapolating from observed results with a telehealth network in Tennessee, Burgiss, a professor at the University of Tennessee Graduate School of Medicine, published estimates that remote monitoring could bring national costs of caring for congestive heart failure patients down from $8 billion a year to $4.2 billion, including costs of providing remote monitoring.

However, costs of remote monitoring are "in the stratosphere," said Malkary, and health care payers don't want to cover the service until they know exactly what patients will benefit under what circumstances. Most organizations use remote monitoring only for so-called "frequent fliers," patients with many chronic diseases that have already been to the hospital repeatedly.

Providers most likely to use remote patient monitoring belong to managed care organizations that pay for all aspects of a patient's care, including expensive hospitalizations and less costly preventive care. Still, 65 percent of organizations interviewed were investing in remote monitoring equipment for high-risk, high-cost patients with multiple chronic diseases. Providers are most interested in monitoring patients with chronic diseases like congestive heart failure, diabetes, chronic obstructive pulmonary disease and asthma.

Most organizations interviewed thought it would take five to seven years to amass enough evidence to convince the big government health care payers to openly endorse remote monitoring. Appropriate equipment is a huge barrier. Remote monitoring units typically cost between $3,000 and $5,000 and most organizations interviews felt that the price needed to drop to below $1,000 to spur adoption. People living in remote areas tend to have noisy phone lines or use dial tones that can't allow collected information to be sent over telephone wires, and many elderly patients do not have broadband connections.

Malkary said one solution would be to have remote monitoring stations at drug stores so that several patients could share monitoring equipment. Other technology companies, like Intel, anticipate producing monitoring devices that could be sold to patients. But getting the right equipment is just part of the problem. "If something's going wrong, there needs to be somebody to act on it," said Malkary.

Though companies like Health Hero have services that both collect information and professionals that monitor it, patients' personal doctors are often not part of the monitoring system. Doctors and nurses need to be able to use the information to help patients take better care of themselves and avoid trips to the hospital, said Malkary. But until the service is covered, clinicians are reluctant to participate. Doctors usually don't get paid for interpreting data collected remotely, but they can still get sued if they make a mistake, said Malkary.

While the most obvious barrier to telehealth is Medicare and the reluctance of health insurers to pay for it, said Burgiss, perhaps the biggest barrier is that clinicians can't yet imagine it as a duty on par with office visits. "Those barriers would go away very quickly if physicians would say to Washington, 'This is good, this works, we've got to have it.'"

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