Telemedicine and Healthcare Reform: An Analysis of Telemedicine and its Place in the Future of U.S. Healthcare

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A discussion of issues influencing and facing the remote monitoring services market.

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Telemedicine and Healthcare Reform: An Analysis of Telemedicine and its Place in the Future of U.S. Healthcare

  1. 1. Telemedicine and Healthcare Reform: An Analysis of Telemedicine and its Place in the Future of U.S. Healthcare Zachary Bujnoch, Industry Analyst Patient Monitoring September 30, 2009
  2. 2. Focus Points Scope and Definitions Major Issues Influencing the Future of This Market in the Current Economic Climate Where We Are Today: Issues Leading to Current Remote Monitoring Market Policies and Trends Issues Defining the Current Market: The Complex World of Remote Monitoring Services Conclusions 2
  3. 3. Scope and Definitions • Telemedicine/Telehealth- the delivery of health-related services and information via telecommunications technologies • Remote Monitoring (RM)- a combination of medical devices, intelligent software, and telecommunications systems can be used to diagnose, monitor, and treat patients outside of the hospital setting (non-face-to-face) • Home Healthcare- a primary facet of remote monitoring - typically consists of the monitoring of parameters that can be measured by user friendly monitoring devices in the home, born from medical services such as in-house nursing and retirement homes • Disease Management- very similar with quite a bit of overlap to home healthcare, but typically involves more long-term lifestyle changes and condition management systems • EMR- electronic medical records 3
  4. 4. Scope and Definitions Some Types of telemedicine: • Video conferencing • Home Healthcare • Disease Management • Cardiac Monitoring • Sleep Apnea • Home Diagnostic Tests • Mobile Clinics • Simulations • And many others 4
  5. 5. Major Issues Influencing the Future of This Market in the Current Economic Climate: Reform and Telemedicine 5
  6. 6. Reform and Telemedicine •Major payer reform does not directly take into account systemic •The focus on EMRs in healthcare issues such as reform does take some duplicates in care, errors, of these things into or assorted variations in account and is a boon to healthcare practices. the telemedicine market, Analysis but just focusing on •Even with successful EMR seems short payer reform, healthcare sighted. availability could remain a major issue as healthcare systems remain exceptionally diverse and disjointed across. Telemedicine provides an intriguing prospect of addressing many major issue in U.S. healthcare. 6
  7. 7. Reform and Telemedicine (Con’t) • Telemedicine provides an intriguing prospect of addressing many major issue in U.S. healthcare • Many of the issues plaguing the U.S. healthcare system can be linked to the inherent size and complexity of the U.S. geographically and demographically • Telemedicine directly provides tools that can help bridge the gap in many of the current siloed healthcare systems • Encourage appropriate and sound use of healthcare resources and discourage frivolous and wasteful practices • A major step in telemedicine reform could happen in one place, reimbursement 7
  8. 8. Is the U.S. Being Left Behind? Yes? No? Yes? No? •• Several major international Several major international •• From a market revenue From a market revenue companies began companies began point of view, the EU and point of view, the EU and development in the EU. development in the EU. the U.S. both support very the U.S. both support very similar revenues of similar revenues of •• In general, the U.S. is seen In general, the U.S. is seen around $100 million for around $100 million for as highly restrictive in FDA as highly restrictive in FDA remote monitoring remote monitoring approval when compared approval when compared services. services. to the EU, telemedicine is to the EU, telemedicine is no exception. no exception. •• Many issues such as Many issues such as standards remain a standards remain a •• When international When international serious concern in both serious concern in both companies have a choice, companies have a choice, the U.S. and in the EU, the U.S. and in the EU, where do they go? where do they go? along with the rest of the along with the rest of the world. world. 8
  9. 9. The Rapidly Changing Telemedicine Customer The customer demographics for healthcare companies The Flood Gates – continue to evolve as devices and software continue to Key Issues Restraining this be outfitted and implemented for the home and High Potential Market community. This trend of empowering patients as potential end users It is highly possible within the next is most prominent in these interrelated major areas in ten years that this market will begin a remote medicine: shift towards a more consumer- Home Healthcare and Disease Management oriented model. Patient Controlled Health Records While this will by no means eliminate Tele-pharmacy the need for professional remote monitoring services, it will probably Remote Health Kiosks/Stations undermine the potential of the model Community clinics (w/o physicians) currently being deployed by remote monitoring companies. Tele-pharmacy Home Healthcare The clock is ticking for the remote Disease Management monitoring industry, and if it doesn’t Remote Medicine soon find a way to fulfill its grand Patient Controlled Remote Health possibilities, it will be replaced by Health Records Kiosks/Stations something that can Community clinics 9
  10. 10. Where We Are Today: Issues Leading to Current Telemedicine Market Policies and Trends 10
  11. 11. Market History , Growth and Setbacks The current telehealth market has been around for over 15 years Around the turn of the century, over- promising and under-delivering The market has in Simply a lack of lead to a backlash general slowly policy support and in the market rebounded since reimbursement growing steadily heavily restrained despite restraints this market Source: Frost & Sullivan. 11
  12. 12. Examples of Telemedicine Systems in the U.S. Public •• Texas prisons Texas prisons •• Alaskan Indians Alaskan Indians •• VA hospital system VA hospital system Private •• Many success stories, but on a micro- Many success stories, but on a micro- scale scale •• Success both on the outcomes and cost, Success both on the outcomes and cost, but many companies have met with failure but many companies have met with failure as well over the past 10 years as well over the past 10 years 12
  13. 13. Issues Defining the Current Market: The Complex World of Telemedicine 13
  14. 14. Market Basics • Despite these negative market policy issues, the remote monitoring market has continued to grow at over 20 percent per year. • Several growth factors include the following: decreasing number of hospital beds, an overall decrease in the length in hospital visits, and nursing/doctor shortages. These factors really feed into the overarching issue - the extreme pressure for healthcare providers to be cost efficient. • Small-scale case studies have shown clear cost savings, but due to the complexity and diversity of these systems, most large-scale studies to date have been inconclusive. • Technology seems not to be the deciding factor in the success of these systems, but instead correct implementation looks to be the most important step in achieving success. 14
  15. 15. Patient Monitoring Revenue Growth Rates (2007) Revenue Growth Rate (%) Cardiac Equipment Multiparameter Temperature Pulse Oximetry Blood Pressure Remote Monitoring 0 5 10 15 20 25 15
  16. 16. Current Supporting Evidence Outcomes •• There is some very strong evidence for clinical outcome There is some very strong evidence for clinical outcome improvement both on the micro and macro scale. improvement both on the micro and macro scale. •• The VHA recently published the results of four The VHA recently published the results of four years of data from the program showing a years of data from the program showing a reduction of 19 percent in hospitalizations and 25 reduction of 19 percent in hospitalizations and 25 percent reduction in bed days of care for percent reduction in bed days of care for participating 17,025 patients. ** participating 17,025 patients. Cost Savings •• Direct cost savings data is much more limited, but Direct cost savings data is much more limited, but preliminary and micro-sized data is encouraging. preliminary and micro-sized data is encouraging. •• Questions such as who saves the money, Questions such as who saves the money, possible cost increases in other departments, and possible cost increases in other departments, and longevity need clearer answers. longevity need clearer answers. * Adam Darkins, M.D., Patricia Ryan, R.N., M.S., Rita Kobb, M.N., et al., “ Care Coordination/Home Teleheatlh: The Systematic Implementation of Health Informatics, Home Telehealth, and Disease Management to Support the Care of Veteran Patients with Chronic Conditions” Telemedicine and e-Health 2008, 14 (10) ,1118-1126. 16
  17. 17. Continuing the Discussion on Cost Savings Proving cost savings Proving cost savings within telehealth remains within telehealth remains an arduous, seemingly an arduous, seemingly Who in the hospital never-ending task never-ending task Who in the payer system Who in the hospital Who in the payer system system saves time and saves money? saves money? system saves time and money? money? A Discussion on Cost Savings Published articles Private sources (such as Private sources (such as Published articles provide some evidence market participants) show market participants) show provide some evidence but still vary but still vary some compelling some compelling numbers but the public numbers but the public still desires further data still desires further data 17
  18. 18. Increasing Focus on Human Factors • A key issue in this service oriented market • The first half is focused on the healthcare provider • Relationship-building is key • Extremely diverse set of technologies and sub-disciplines that previously rarely interacted • The second half is end-user focused • Patient selection and training • The level of technical aptitude The provider needs to monitor The provider needs to monitor and interact with the patient and interact with the patient effectively effectively Discharged from Patient is selected and Patient is selected and Discharged from put on home monitoring The patient needs to hospital put on home monitoring The patient needs to hospital service adequately and competently service adequately and competently adhere to the program adhere to the program 18
  19. 19. Continuing Barriers to Reimbursement One of the core issues for these home monitoring systems is that One of the core issues for these home monitoring systems is that 1 1 they are complex solutions built of a number of sub-systems. they are complex solutions built of a number of sub-systems. This need for variety and customization is necessary to account This need for variety and customization is necessary to account 2 2 for the drastically different needs of home healthcare systems in for the drastically different needs of home healthcare systems in different geographic regions and applications in the U.S. different geographic regions and applications in the U.S. This need for customization has made ititvery difficult for the CMS This need for customization has made very difficult for the CMS 3 3 to acquire consistent cost savings data, which is a typical step to acquire consistent cost savings data, which is a typical step toward national direct reimbursement. toward national direct reimbursement. State governments and other governmental organizations are State governments and other governmental organizations are 4 4 picking up the slack and passing policies to attempt to resolve picking up the slack and passing policies to attempt to resolve these issues in their respective areas. these issues in their respective areas. 19
  20. 20. Some Conclusions • Telehealth solutions such as remote monitoring are an intriguing technological “next step” in the advancement of healthcare systems around the world. • While current healthcare reform does address some issues through payer reform and EMRs, several more issues could be addressed more directly with new technologies such as those found in telehealth. • However, telehealth faces a complex web of market issues and challenges. This complex market space mirrors many of the hurdles the healthcare industry as a whole faces in the current environment. • The person, company, or even government that adequately solves this set of issues will be well- positioned to revolutionize the healthcare industry, and stands to make (or save) quite a bit of money. 20
  21. 21. Next Steps Register for the next Chairman’s Series on Growth: The Growth Excellence Model: Competitive Benchmarking & Growth Investing (October 6th) (http://www.frost.com/growth) Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities (www.frost.com/news) 21
  22. 22. Your Feedback is Important to Us What would you like to see from Frost & Sullivan? Growth Forecasts? Competitive Structure? Emerging Trends? Strategic Recommendations? Other? Please inform us by taking our survey. 22
  23. 23. For Additional Information Carol Skloss Johanna Haynes Director of Sales Corporate Communications Healthcare 210-247-3870 North America johanna.haynes@frost.com 210-247-3810 carol.skloss@frost.com Antonio Garcia Industry Manager Medical Imaging & Patient Monitoring North America 210-247-3886 agarcia@frost.com 23

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