By Fred Dawson
July 29, 2013 – When it comes to the wisdom of looking past trees to see the forest, nothing in the realm of network service provider opportunities better illustrates the old saw than telehealth.
For NSPs fixated on tree gazing, this is a vertical awash in uncertainties, including most significantly confusion over the role health care reform at the federal and state levels will ultimately play in driving care givers’ and payers’ adoption of telehealth strategies. Add to this the absence of clarity about which solutions out of a rising tide of technology innovations, from monitoring devices to remote care modules and kiosks, will gain traction with the medical community, and it’s no wonder many NSPs are reluctant to dive in.
But for those looking beyond the immediate uncertainties there’s an inevitability about telehealth, which is to say, the use of network connections and specialized technology to drive costs down across all tiers of the health ecosystem, from how core and satellite health care facilities share resources to how care is extended to remote clinics and residences. Indeed, judging by early successes among telephone and cable companies who are aggressively pursuing these opportunities, the pace of telehealth adoption has reached a point where NSPs who don’t devote resources to nurturing this market risk being left behind.
Verizon, for example, has gone to great lengths to get ahead of the market, or, as Nancy Green, managing principal of Verizon Health IT Services, jokingly puts it, to establish “a base level of world domination.” Revenues generated across all Verizon networks from all health-related services are now topping $5 billion annually, Green says.
Much of this revenue stream comes from basic transport requirements, which have grown rapidly as hospitals leverage interconnections within and across owned-and-operated clusters to accommodate electronic medical record (EMR) transfers and as EMR storage volumes push hospitals to use of remote storage centers. The securing of access to as well as storage of EMR with specialized cloud-based services has become a vital part of Verizon’s and other NSPs’ operations in the health arena.
EMR and the Cloud
Indeed, this is one area where government regulations are sufficiently stable to validate the growth potential of a telehealth service component. Under provisions of the Health Insurance Portability and Accountability Act (HIPAA) the federal government has mandated that health care providers transition to electronic health records within two years or face penalties through reduced Medicare and Medicaid payments.
With the lion’s share of this conversion still to be accomplished the upside potential for NSPs is clear. But there’s more to the health care cloud story, as evidenced by the cloud service initiatives of Verizon and AT&T.
Utilizing its Terremark data centers in Miami, Fla., and Culpeper, Va., Verizon is offering a variety of cloud services enabling health care professionals to collaborate, share patient information in near real-time and store large volumes of data for electronic health records and radiology images. Services are also available for the pharmaceutical, insurance and other supporting industries.
EMR storage and management is one of the four major pillars of AT&T’s ForHealth compendium of services, notes Ed Simcox, director of telehealth services at AT&T. “We’ve geared our Core Cloud Services platform to meet the precise needs of health care providers, including the security and audit trail requirements,” Simcox says.
AT&T employs Medical Imaging and Information Management (MIIM) technology as the central component to its ForHealth cloud services, he adds. “MIIM is a vendor-neutral storage platform for radiology, cardiology and other specialties for storing images out of CT, MRI, x-ray and other types of equipment,” he says.
The need for such capabilities is escalating not only because of the raw increase in patient records now earmarked for digital storage but also because higher resolution images and increasing numbers of images per session have added another multiplier to the storage equation. “These machines are throwing out larger and larger files every year,” Simcox notes.
Adding to its array of ForHealth cloud services, AT&T late last year introduced a cloud patient-monitoring service designed to help doctors manage patients’ chronic diseases through live video chat. The remote-patient-monitoring (RPM) platform is built on Ericsson’s cloud-based software-as-a-service (SaaS) infrastructure, using Bluetooth devices and medical sensors to transmit patients’ vital signs remotely to doctors.
Doctors, who access the data from a secure device-agnostic cloud platform supplied by Intuitive Health, can integrate data gained from RPM directly into their workflows. At the same time, consumer mobile devices connect with the Intuitive Health platform to enable patients to keep track of their health.
Beyond the low-hanging fruit tied to data transport and storage, a spate of recent studies by research organizations project rapid increases in demand for other categories of telehealth services. In general, the global market for telehealth and telemedicine services, slated to hit $14 billion in revenues this year, will grow to $32.5 billion by 2018, according to a study released last year by London-based GlobalData. The U.S. accounts for half the current market but will see its share decline as the Asia-Pacific growth rate increases, the study says.
Other studies highlight the role of wireless connectivity, including Wi-Fi, ZigBee, Z-Wave, UWB and Bluetooth as well as mobile, in the telehealth surge. Here the numbers, as reported by MarketResearch.com last year, pertain to sales of network components, devices and apps directly related to health service rather than actual service revenues. The researchers project the global market for wireless technologies, including specialized devices as well as link components, used in personal health management and health care delivery will increase at a cumulative annual growth rate of 19.4 percent, reaching $38.5 billion in 2016.
Much of this growth in wireless technology demand for health applications will be tied to remote patient monitoring, which at this point has not reached anything close to its long-anticipated potential. According to Berg Insight, home monitoring systems with integrated communications capabilities, not counting connections to generic devices like mobile phones, tablets and PCs, now reach 2.8 million patients worldwide and will reach 9.4 million by 2017.
“Widespread use of remote patient monitoring is still years away, but we are moving towards an age where mHealth solutions will become part of standard care pathways,” says Lars Kurkinen, telecom analyst at Berg Insight. “We believe 2013 will be a landmark year as the mHealth industry shifts into a strong growth phase that will last for many years to come.” (It should be noted that “mHealth” is a generic term referencing widespread use of wireless connectivity for monitoring services, although monitoring might also be part of a fixed telehealth service for home use that includes other e-health components as well.)
Several new developments in health monitoring will ensure strong market growth in 2013 and beyond, Kurkinen says. In the U.S., the progressive increases of readmission penalties set by the Centers for Medicare & Medicaid Services (CMS) will drive hospitals to adopt telehealth solutions for monitoring post-discharge patients.
In the UK, the positive results from the Whole System Demonstrator project led the National Health Service to issue a mandate for 100,000 additional patients to be monitored with telehealth solutions by March 2014. In France, a new mandate on compliance monitoring will ensure that all new sleep therapy patients will be remotely monitored from 2013 onwards. This is expected to result in more than 600,000 connected sleep therapy devices by 2016.
“Today cardiac rhythm management (CRM) is the most important segment of connected medical devices,” Kurkinen says. “However, we believe that connected sleep therapy devices will become the largest segment of connected medical devices by 2017, followed by the CRM and telehealth categories. Connectivity is at the same time gaining momentum in several other segments such as blood pressure monitoring, glucose monitoring, ECG monitoring and medication adherence.”
Where the role of U.S. health care reform is concerned, the timing of the anticipated surge in patient monitoring is still uncertain. InMedica, a division of IMS Research, now owned by IHS, Inc., predicts the new U.S. regulations will contribute to a 55 percent growth worldwide in remote patient monitoring this year.
InMedica notes that telehealth post-acute care strategies are listed by CMS as one of 13 possible models to reduce readmissions. In addition, as a larger number of patients enter the insurance pool, healthcare payers are projected to adopt telehealth as a population management tool to reduce in-patient costs.
Beyond the politics of health care now roiling the market, the imperatives behind telehealth seem certain to be part of the new regulatory framework, no matter when that framework takes hold. “Despite criticism of health care reform, it is clear that the long-term goals of the CMS are to move toward greater continuity of care while reducing costs through the avoidance of unnecessary duplication of services,” says Theo Ahadome, senior analyst with InMedica.
“For telehealth to succeed in reaching a wider audience, it needs to break out of being a niche market and become part of a comprehensive patient-care model,” Ahadome says. “This is even more important in the post-acute care market where healthcare providers are more willing to pay for telehealth if it is part of a total post-acute care model.”
As InMedia says in its report, of particular concern to the U.S. government is the rise in chronic conditions such as heart failure, chronic obstructive pulmonary disease and obesity in a rapidly aging population. Recent data from the Centers for Disease Control & Prevention (CDC) indicate that 30 percent of adults 20 years of age and older are clinically obese. It is possible that such high rates of obesity could lead to a further explosion in cardiovascular diseases, back pain and diabetes prevalence, providing additional impetus for healthcare cost reductions, InMedia says.
But, as Ahadome notes, citing how long it took for anti-smoking policies to take hold, “Behavior change can take time. It is clear from the provider and payer interviews conducted during this research that there is still much work to be done in advancing the state of telehealth in the U.S.”
The ACO Conundrum
One development reflecting both the upside potential and the transitional hassles associated with telehealth is the emergence of accountable care organizations (ACOs), which are set up as public ACOs under provisions of the Affordable Care Act (ACA) to drive down costs of Medicare or privately through agreements with insurers to help lower insurance payments across all care categories. In all cases, the goal is to move away from fee-for-service based reimbursement, which is seen as a volume-driven cost escalator, to payment models that reward low-cost care coordination and quality outcomes by sharing amounts saved against traditional cost benchmarks with providers.
There’s much confusion over where the ACO movement is headed. On the one hand, the number of ACOs nationwide has grown to over 400 since passage of the ACA in 2010 but, on the other, CMS recently acknowledged that nine of the original 32 ACOs enrolled as “Pioneer ACOs” under a provision of the act have indicated they may withdraw from the program owing to problems related to difficulties of controlling costs, complications with record keeping and delays in issuance of essential medical claims data by CMS.
In a recent blog summarizing the trends in ACO activities, David Muhlestein, director of research at Leavitt Partners, a health care consulting firm, notes that out of the 428 or so ACOs his group has identified, about 250 are operating under provisions of the ACA with the remainder operating under private agreements. But while there are ACOs in all but one state and the number will inevitably increase in the near term, the total “still represents a small minority of care delivered in the United States,” Muhlestein says.
“ACOs are still a work in process and their eventual success or failure is still to be determined, but the accountable care movement’s influence on the American health care system is already being felt,” he adds. “In 2013, many ACOs will complete their first year under a risk-based ACO contract, and their early results will influence how payers, providers and policymakers experiment with future iterations of accountable care.
“If the results are good, then the ACO model may become the dominant form of health care in the United States over the next decade. If the results are negative, accountable care may never gain a permanent foothold in our delivery system.”
Meanwhile, ACOs are key targets for NSPs seeking to develop telehealth solutions. Given the lack of clarity on monetization of telehealth, “ACOs, who are paid for performance, are more likely to look at these solutions,” says Verizon’s Green. “For payers it’s a question of how do I use telemedicine to stop them from having to make a $10,000 visit to ER.”
The absence of reimbursement models for remote care is a key issue. Without a fee structure for remote care giving, the incentive for care givers is to require face-to-face visits from patients. But things are improving. “Thirty-two states now have provided reimbursement structure for telemedicine of some kind, but it’s not consistent,” Green says.
Moreover, she adds, there’s a natural ROI incentive coming into play where using telemedicine to provide routine follow-up to some patients frees time to spend more time with other patients who need more intensive care. “They can use home care to avoid clogging up the system and to lower overhead,” she says. “We work with a lot of people on the ROI piece of it.”
Verizon’s Enablement Strategy
Competing on a national scale across their fixed and mobile infrastructures Verizon and AT&T have taken very different approaches to securing a strong beachhead in the health care sector. For Verizon, the opportunity is tied to its ability to play the role of facilitator at a time when health organizations are in the early stages of determining what they can gain from telehealth services and technology. As explained by Green, the carrier’s IT healthcare practice, headed by chief medical officer Dr. Peter Tippett, is positioned to work as an “innovations incubator” with all the sectors within the vertical, including providers, pharmacies, payers and technology suppliers.
The group’s portfolio of IT and managed services is designed to help the healthcare industry “take away the inhibitors” to maximizing the benefits of telehealth, Green says. “We’re not clinical service-line specific,” she explains. “We’re using the cloud and technology enablement along with our IT and integrations expertise to help you accomplish what you’re trying to do.”
No matter what the ultimate strategy, the starting point is “always about that communications and integration problem,” Green says. “Maybe I need to have video enablement for consultation services across counties, and then I want to get into the homes. How do I get that data to come into my EMR or do I need to do that?”
This is not a cookie-cutter business, she adds. “Everyone is a one off,” she says. “We’ve done some things that have made integration easier where there are toolkits and APIs to integrate security or something like that. But when you’re integrating data from one source to another that requires a lot of mapping.”
Along with ACOs, entities with a high interest in telehealth services include community organizations and hospital groups that are attempting to maximize use of health resources across multiple facilities with strong interest in EMR sharing and the use of video conferencing to support remote patient care in outlying areas. “It doesn’t matter whether they’re rural or not,” Green says.
“It’s happening all over the place,” she adds. “If you look at the five boroughs of New York, there are federally regulated urban health shortage areas. You can go into metro areas where it takes an hour and a half or two hours to get to a neurologist or dermatologist. So they’re using telemedicine even in these areas.”
Demand for telehealth support extends to community health centers, senior centers and even “retailers with pharmacies that have touch points patients can come in and be able to be taken care of by a clinician of some kind,” she notes. Verizon is now working with certain telehealth kiosk vendors to support everything from consumers’ checking on their blood pressure to live sessions with doctors using telepresence connections in fully enclosed modules.
“Healthspot.net is one of our partners,” Green says. “They supply a full telemedicine kiosk with video screen and camera, stethoscopes. ear, eye and throat devices, blood pressure monitor, weight scale, etc. You can roll a wheelchair in there.”
While most organizations Verizon works with are focused on extending remote care to clinics or other local facilities, the effort to reach patients in their homes is gaining traction as the next horizon for these clients. “When we look at expanding care to the home, there’s a chronic care element and then there’s expanding care just so people can get access to information and care when they need it,” Green says.
To expedite the extension of telehealth to the home the company has established a number of partnerships with various technology suppliers along with a certification program for connected devices that can be linked into its LTE network to provide monitoring support for patients under ongoing care. One such partner utilizing the Verizon LTE network is BL Healthcare, which offers an HD video-enabled telemedicine ecosystem for use in homes, small clinics, work places and assisted living and nursing facilities with backend support for processing data and tracking system efficacy.
BL, in turn, works with a number of other suppliers who provide various types of medical peripherals and unique care applications for disease management that plug into its access terminal. “They’ve done some very good clinical trials with some of our big clients,” Green says.
Through a newly consolidated device partner program Verizon hopes to serve as a catalyst toward the adoption of M2M wireless healthcare solutions. Recent additions to the Verizon Partner Program include Carematix, a provider of telehealth solutions for patient-reported outcomes in clinical trials and disease management programs, and Sonicu, a monitoring, data-collection and advisory system that measures sound and noise levels – as well as other data such as temperature, humidity and vibrations – in neonatal intensive care units.
The medical device manufacturers in Verizon’s Partner Program use Verizon’s networks in a variety of ways. For example, Carematix utilizes Verizon’s wireless and wireline networks to support multi-country, multisite clinical trials across the world in an effort to speed research. Others, such as Zipit Wireless and VGo Communications, rely on the company’s wireless network to help resolve key issues – the delivery of critical messaging and the interoperability of healthcare IT systems, for example – as well as to provide care to patients.
The AT&T ForHealth Strategy
Arch rival AT&T has taken a different approach to healthcare by defining its services around four interrelated “pillars,” including virtual care, patient monitoring, connected health and EMR storage and management. “About three years ago AT&T formed the ForHealth division as a marketing vertical focused on health care, primarily around health care providers and also payers and some pharma as well,” says Ed Simcox. “My focus is on the virtual care segment of our services, which is our service brand for our telehealth portfolio.”
The comment points up the fluidity of the nomenclature in this market, where terms like telehealth and telemedicine mean different things to different people. In AT&T’s case virtual care/telehealth consists of four components relating to the use of network connectivity to facilitate remote patient care, including video, network, medical devices and services that wrap around the other three.
“Video involves use of two-way, real-time video to create an immersive video-rich experience with a clinician as an alternative to face-to-face interactions,” Simcox explains. Network refers to the various types of AT&T networks that are set up in a secure way to meet the needs of the medical community.
When it comes to the devices and service components, he adds, the goal is to facilitate device connectivity and management via robust services that make it extremely simple for patients to interact with care givers. “We want the technology to dissolve away so that the clinician and patient can have a meaningful engagement,” he says. “We design and implement the entire system and provide the support to make sure the network is always up and the system is talking to the network.”
“With our virtual care services we don’t say this is what you get, take or leave it,” Simcox continues. “We come in and do a discovery process with customers and figure out how they want to use our services, the basic use cases for end points and sets of equipment. Then we fashion a solution around pre-certified technology, come back and say, this is what we recommend.”
As for the other three pillars targeted by the ForHealth vertical, patient monitoring is tightly aligned with virtual care, with connectivity focused on pre-integrated off-the-shelf solutions tied to devices produced by three vendors – AMD Global Telemedicine, GlobalMed and Littmann, the supplier of a widely used stethoscope. The carrier also works with providers to integrate other vendor solutions into the service environment, Simcox notes.
Connected health refers to the set of tools and services AT&T provides “that allow health organizations, which might be governmental, community, non-profit or traditional providers, to exchange important data in a way that’s auditable, trackable and very, very secure in compliance with state and federal regulations,” Simcox says. These as well as the virtual care services are often implemented at the provider premises with pre-certified equipment using the internal networks of providers. “Some customers feel like they have more control over the integrity and security of the service using their own network facilities,” he notes.
But, increasingly, he adds, “we have organizations that are branching into cloud-based solutions where they want us to own everything. They don’t want to own or manage the equipment or to have it on their books. So we offer an op ex model with monthly per-end-point pricing.”