Telemedicine and Value Based Payment Systems

Since the passage of the Affordable Care Act and the major advancements on medicine, there has been an increased use of health-related technologies to provide services to patients. These medical advancements have brought increased costs despite the aim of the health policy to lower costs and expand coverage. One aspect of healthcare that has helped combat rising costs and increase coverage is telehealth. Telehealth has been loosely defined as a means of improving overall healthcare through the use of telecommunication technologies. The use of telehealth is not new to healthcare, and it has primarily consisted of communications between the doctor and patient over the phone. In the past few years, however, telehealth has expanded to include video conferencing with patients, apps for smart devices, and even kiosks with devices connected to a provider.

Advancements in telehealth technologies allow for an increased flow of information between three participating groups: providers, patients, and caregivers. First, provider to provider communication allows specialists in various geographic locations to consult on a single case. Next, provider to patient communication for primary care gives patients more improved access to care. Most primary care performed via telehealth is limited to services that do not require immediate contact with a provider, such as mental health and dermatology. Additionally, pre- and post-procedure consultations are another area of increasing telehealth utilization. Lastly, communication between family caregivers and providers provides a convenient way for care coordination in a home setting. Telehealth provides further advantages, including reductions in employee absenteeism due to medical appointments and reductions in inappropriate utilization of emergency care due to a lack of access to other forms of care.

Like any new form of technology, telehealth has its flaws and barriers to use. One challenge facing telehealth is restrictions imposed by laws and regulations. Healthcare information is extremely highly personal and confidential information. Recent data breaches in the healthcare industry has created growing uncertainties about data security. Due to this uncertainty, federal and state governments continue to restrict how telehealth may be used. Another challenge facing telehealth is payment. Telehealth providers, for the most part, receive fee-for-service compensation, instead the value-based compensation, for in-person care. This difference in how providers are compensated creates potential problems for telehealth. Many advocates would like to see telehealth visits be less costly than traditional in-person care; however, recent findings have shown that the opposite is occurring.

Recently, the RAND Corporation published a study in the journal Health Affairs examining whether telehealth services were cheaper than an in-person visit. Looking at total annual spending on healthcare, the study found that telehealth patients spent $45 more per patient per year. The study explained​ that the increase in cost stemmed from data showing that 88% of telehealth patients were those that would not have gone to a doctor if telehealth been unavailable. While the explanation for the increased spending is logical, the increase demonstrates a growing challenge to the expansion of telehealth. As telehealth continues to evolve, like any other form of technology, these challenges will need to be addressed in order to fit in the growing trend of value-based care.

Alexander Martell is a first year student at DePaul University College of Law. He a Fellow in the Jaharis Health Law Institute and a Staff Writer for the Institute’s online publication, E-Pulse. Alexander has an interest in regulatory and policy issues, and will complete his law degree and certificate in health law in 2019.