Itís no secret that as health care costs continue to rise and insurance providers relentlessly apply pressure to bring costs down, one of two things is bound to happen:

  1. Quality of patient care will continue to degrade.
  2. Healthcare providers will find more creative and cost effective ways to deliver care.

In 1993 alone, healthcare workers made 458 million visits to some six million people at a cost of over $30 billion dollars or about $70 to $80 per house call. Much of this cost was covered by federally funded Medicare and Medicaid dollars. Other examples of possibly avoidable high costs in healthcare involve patients at rural hospitals needing transportation to metro hospitals for case review by physician specialists not available in the rural areas. Nursing home patients being sent by ambulance to an emergency department for physician evaluation is another example. Unnecessary utilization of ambulances, helicopters, and planes as transportation for patients from home, work, or remote locations to the emergency department, for evaluation of minor health needs due to lack of physician availability on sight to accurately advise on treatment, also greatly contributes to our nationís healthcare cost burden.

The technologies employed in all of these scenarios are variations on a common theme: Transportation of the patient or the doctor to the same location for the provision of hands on medical care. An emerging technology that may circumvent some of these unnecessary costs, especially the massive costs of medical transportation, involves the use of a multimedia communications platform that can be deployed remotely or even in a mobile manner. This emerging technology is Telemedicine. The technology rests on the simple idea of transferring information instead of patients.

Telemedicine allows for a virtual communication, using realĖtime audiovisual information transmitted over, between a patient and a physician at two different sites. Use of this technology has the potential to dramatically reduce the cost of providing healthcare. By changing the way patients are treated, from the traditional methods of in person care to remote care, telemedicine may also improve healthcare access to areas where it was essentially not available in the past. It is easy to see how telemedical technology can be implemented to provide routine patient house calls and even provide healthcare in remote areas, such as to a North Sea oil platform, an Antarctic expedition, a battle field, or a remote Pacific Island.

One aspect of this technology is aimed at treating the chronically ill and/or elderly patients who live at home but require regular medical check-ups for vital signs and medications. The technology encompasses communication (via telephone line, ISDN/ADSL, Satellite, or Cable TV), modem/data terminating device, customized PC computer nurse/physician work stations and roll about patient carts complete with data collection capabilities. The patient set up includes a PC based data collection cart that collects the data in the patientís home and transmits it via the communications line real time to the base station. For example, American TeleCareís Personal Telemedicine System lets healthcare providers, using two way interactive systems at centralized work stations, virtually walk patients at home through simple tests, including blood pressure, pulse, temperature, and respiratory rate checks. There are numerous other types of data that can be transmitted using telemedicine as well, including x-rays, real time interactive images of catheter sites and wounds, electrocardiograms. Telemedicine technology may also be used to assist patients with medication administration.

Another version of this technology is exemplified by a system called Dosing Partners. Dosing Partners is an in-home medication monitoring and intervention service made by the Aprex division of Apria Healthcare in Silicon Valley. This system provides healthcare providers with information via phone lines on how often patients are taking their prescribed medications. A device called a SmartCap collects the data using a prescription medication bottle cap fitted with a computer chip that records the exact time a bottle is opened. The SmartCap device also provides visual and audible reminders to the patient at the prescribed dosage intervals. At night the patient places the cap on a Homelink modem that reads the information from the cap and transmits it. Tests have shown that this system can increase patient compliance with prescribed medications, helping to prevent many of the previously avoidable visits to the hospital.

According to Telemedicine Today, the typical interactive equipment costs from $3,000 to $8,000 per nursing station, and $4,500 per patient unit. Transmission charges run at least $20/hour depending on the communications speed and methodology.

Key Applications

Teleradiology- transmits patient images, including plain film x-rays, CT scans, and so on at high speed across communication lines for remote consults and additional expertise.

Telephone Triage- provides healthcare professionals with real time audiovisual data including a patientís vital signs and pertinent history and physical exam data to assist emergency medical service personnel along side the patient with medical care while in remote locations or in transit to the hospital.

Remote Consultations- gives physicians practicing in rural locations the ability to tap into databases at large metro areas and consult with referral hospital specialists using audio-visual information from the patientís bedside.

Electronic Housecalls- facilitates the remote monitoring, routine testing, diagnosis, and treatment of patients within their own home.

Distance Learning- provides a multimedia meeting room for continuing medical education for healthcare professionals without having to travel to central sites.


Major Players/Users

Due to the high costs associated with deploying telemedicine technology its major users are primarily confined to large teaching hospitals, teaching institutions, prominent hospital systems, and the governments of various nations including the United States. The US Military has spent millions of dollars to develop what it calls "telepresence surgery" to put medical experts essentially on the front lines in MASH units and so on. Systems have already been used successfully at the Mayo Clinic, the University of North Carolina, the University of California at Davis, and the Abbott Northwestern Hospital. The basic technology needed for a telemedicine system has been around since the 1960ís. As long ago as 1968, the Massachusetts General Hospital used a system to remotely staff the airport medical facility. Large health maintenance organizations (HMOís) like Health Partners in Minneapolis, Minnesota and large insurance companies have also vested an interest in the eventual successful deployment of such cost cutting technology.

Telemedical technology is provided from three major areas within the Information Technology industry:

  1. Communications firms consisting of Long Distance companies (AT&T, Sprint & MCI), RBOCís (BellSouth, SWB, Nynex, etc) and Satellite and Cable TV concerns.
  2. Video Compression Technology Firms (VSI, GE, VTEL)
  3. Computer/Software Makers (Apple, GEIS, IBM, Microsoft, etc)
  4. Film Companies (Kodak, Fuji)

Future Viability

Reimbursement issues will play a key role in the development of home based and mobile Telemedicine systems. Given its relatively high cost, most patients will not have the financial capability to afford the service as an out of pocket expense. Thus, reimbursement will depend largely on the healthcare insurance industryís acceptance of the technology. During its initial deployment, services provided by telemedical systems were not covered by Medicare/Medicaid insurance. This lack of insurance coverage has severely limited deployment beyond the trial stages. Itís not a viable technology until the government and private health insurers anoint it as such.

The first step toward correcting this stumbling block has been made by the federal government enacting new legislation requiring the Health Care Financing Administration to reimburse rural providers for telemedicine consultations. The legislation was signed in late July of this year and requires HCFA to develop a payment methodology and begin reimbursing for the service by January 1, 1999. The provision will yield and estimated $100 million to $200 million annually in Medicare payments. This payment scheme, although far from complete, will provide some additional steam in getting further development, deployment, and equipment cost reductions implemented.

Another emerging source of funding for telemedicine involves the modernization of healthcare systems in lessor developed countries using telemedical systems to link with medical experts in the US, Japan, and Europe. A Malaysian firm called Tongkah Holdings Bhd recently entered into a joint venture agreement with the US firm WorldCom Ltd. to provide expert medical consultation by US physician using telemedicine. British Telecommunications has also entered into the market of providing telemedical services to smaller countries in need of expert medical advice. Oceania nations including The Marshall Islands, Micronesia, and Palau are implementing systems for the delivery of telemedicine and other telecommunications services via satellite through a recently formed a cooperative with Orion Network Systems, Inc.


The degree that telemedicine emerges beyond its current state and the extent of its market penetration within the US will primarily depend on how the insurance companies and HMOís view the technology. The applications are limitless for high bandwidth multimedia in the healthcare environment. But with reimbursement issues remaining in question, and the dollars controlled by the insurance companies, what individuals and health care providers select as the best treatment option may not be what they get. In the meantime, the market will probably remain in the $100-200 million a year range and lie primarily in large research oriented academic teaching hospitals and overseas with developing nations.

The paradox here is the group holding up the development and deployment of this technology is the same group that has the most money to gain by implementing it. Given this scenario, the future of telemedicine is not held up by technology but the governors of the healthcare market place and the dollars that flow within it.


Emory MEDWEB Telemedicine

TeleMedicine Links

Virtual Hospital

Telemedicine Magazine

National Library of Medicine - Telemedicine

Department of Defense - Telemedicine

Pacific Rim Telemedicine

Expert Systems in Medicine