Report: Telehealth care drives significant cost savings, but barriers remain
Telehealth services are associated with annual per-facility savings of $5,718 in travel expenses and $3,431 in lost wages for patients, as well as cost savings of $20,841 for hospitals, according to an analysis from the NTCA - The Rural Broadband Association.
Telehealth also increases annual revenues for local labs by around $30,000 for certain procedures and for local pharmacies by around $4,000 for each prescription depending on drugs prescribed.
- Nonquantifiable benefits to telehealth identified in the report include access to specialists, timeliness, comfort, transportation, provider benefits and improved outcomes.
Discussion of the potential benefits to telehealth has been ongoing, but the report from the Rural Broadband Association attempts to calculate the value of some of those benefits. Annual costs savings would be valued at $20,841 for the average hospital, but that figure could exceed $100,000 for some rural hospitals.
Patients in rural areas face a unique set of obstacles when it comes to receiving care. Population density is about 45 times less outside cities than it is in them, which means patients in these areas typically have to travel for longer periods of time at greater cost to see physicians. This is particularly true for rural patients visiting specialists, of which there are an average of 40 per every 10,000 rural residents compared with 134 per every 10,000 urban residents.
These circumstances place strain on healthcare providers serving rural populations. They do not see the same volumes or enjoy the same economies of scale as urban healthcare providers, but are expected to make similar investments and deliver comparable quality. This places financial strain on rural providers who have higher overhead with less reimbursement, according to the report.
For rural health systems, telehealth would produce cost savings by reducing the need to expend resources on specialists. Some hospitals with telehealth programs have been able to produce savings by, for example, eliminating full-time positions for radiologists and psychiatrists. Local lab and pharmacy revenues would increase by keeping patients in communities because, if they travel for care, they are more likely to have those services performed in the area where they receive care.
Despite benefits to telehealth, there are barriers to adoption. Reimbursement is one. Medicare currently places strict limitations on reimbursement for telehealth services. A patchwork of state licensing requirements for providers can also prevent telehealth from reaching its full potential. Maintaining patient privacy protections while delivering telehealth services is another challenge that must be overcome. Cost must also be considered. The pricetag for a video conferencing suite ranges from $15,000 to $20,000, according to the report.
Recent changes to health policy have encouraged providers to transform care delivery systems, but this has led to reductions in operating income, Cleveland Clinic CEO Toby Keith recently said. In this environment, expansion of telehealth could support these transformations and ease the financial burden for providers.
- The Rural Broadband Association Anticipating Economic Returns of Rural Telehealth
- Healthcare Dive Cleveland Clinic suffers 71% operating income drop
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- Healthcare Dive How to get better value from telehealth
- Healthcare Dive Study: Telehealth use could drive up costs