telemedicine and healthcare reform: an analysis of telemedicine and its place in the future of u.s....
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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
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
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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
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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
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Major Issues Influencing the Future of This Market in the
Current Economic Climate: Reform and Telemedicine
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Reform and Telemedicine
Analysis
Telemedicine provides an intriguing prospect of addressing many major issue in U.S. healthcare.
•Major payer reform does not directly take into account systemic healthcare issues such as duplicates in care, errors, or assorted variations in healthcare practices.
•Even with successful payer reform, healthcare availability could remain a major issue as healthcare systems remain exceptionally diverse and disjointed across.
•The focus on EMRs in reform does take some of these things into account and is a boon to the telemedicine market, but just focusing on EMR seems short sighted.
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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
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Is the U.S. Being Left Behind?
Yes?Yes?
• Several major international companies began development in the EU.
• In general, the U.S. is seen as highly restrictive in FDA approval when compared to the EU, telemedicine is no exception.
• When international companies have a choice, where do they go?
• Several major international companies began development in the EU.
• In general, the U.S. is seen as highly restrictive in FDA approval when compared to the EU, telemedicine is no exception.
• When international companies have a choice, where do they go?
No?No?
• From a market revenue point of view, the EU and the U.S. both support very similar revenues of around $100 million for remote monitoring services.
• Many issues such as standards remain a serious concern in both the U.S. and in the EU, along with the rest of the world.
• From a market revenue point of view, the EU and the U.S. both support very similar revenues of around $100 million for remote monitoring services.
• Many issues such as standards remain a serious concern in both the U.S. and in the EU, along with the rest of the world.
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The Rapidly Changing Telemedicine Customer
� It is highly possible within the next
ten years that this market will begin a
shift towards a more consumer-
oriented model.
� While this will by no means eliminate
the need for professional remote
monitoring services, it will probably
undermine the potential of the model
currently being deployed by remote
monitoring companies.
� The clock is ticking for the remote
monitoring industry, and if it doesn’t
soon find a way to fulfill its grand
possibilities, it will be replaced by
something that can
� The customer demographics for healthcare companies
continue to evolve as devices and software continue to
be outfitted and implemented for the home and
community.
� This trend of empowering patients as potential end users
is most prominent in these interrelated major areas in
remote medicine:
� Home Healthcare and Disease Management
� Patient Controlled Health Records
� Tele-pharmacy
� Remote Health Kiosks/Stations
� Community clinics (w/o physicians)
The Flood Gates –Key Issues Restraining this
High Potential Market
Tele-pharmacy
Home Healthcare
Remote Medicine
Disease Management
Remote Health Kiosks/Stations
Patient ControlledHealth Records
Community clinics
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Where We Are Today: Issues Leading to Current
Telemedicine Market Policies and Trends
11
Market History , Growth and Setbacks
Around the turn of the century, over-promising and under-delivering lead to a backlash in the market
Simply a lack of policy support and reimbursement heavily restrained this market
The current telehealth market has been around for over 15 years
The market has in general slowly rebounded since growing steadily despite restraints
Source: Frost & Sullivan.
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Examples of Telemedicine Systems in the U.S.
• Texas prisons
• Alaskan Indians
• VA hospital system
• Texas prisons
• Alaskan Indians
• VA hospital system
PublicPublic
• Many success stories, but on a micro-scale
• Success both on the outcomes and cost, but many companies have met with failure as well over the past 10 years
• Many success stories, but on a micro-scale
• Success both on the outcomes and cost, but many companies have met with failure as well over the past 10 years
PrivatePrivate
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Issues Defining the Current Market: The Complex
World of Telemedicine
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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 thecomplexity 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.
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Patient Monitoring Revenue Growth Rates (2007)
Revenue Growth Rate (%)
0 5 10 15 20 25
Remote Monitoring
Blood Pressure
Pulse Oximetry
Temperature
Multiparameter
Cardiac Equipment
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Current Supporting Evidence
• There is some very strong evidence for clinical outcome improvement both on the micro and macro scale.
• The VHA recently published the results of four years of data from the program showing a reduction of 19 percent in hospitalizations and 25 percent reduction in bed days of care for participating 17,025 patients. *
• There is some very strong evidence for clinical outcome improvement both on the micro and macro scale.
• The VHA recently published the results of four years of data from the program showing a reduction of 19 percent in hospitalizations and 25 percent reduction in bed days of care for participating 17,025 patients. *
OutcomesOutcomes
• Direct cost savings data is much more limited, but preliminary and micro-sized data is encouraging.
• Questions such as who saves the money, possible cost increases in other departments, and longevity need clearer answers.
• Direct cost savings data is much more limited, but preliminary and micro-sized data is encouraging.
• Questions such as who saves the money, possible cost increases in other departments, and longevity need clearer answers.
Cost SavingsCost Savings
* 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.
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Continuing the Discussion on Cost Savings
A Discussion on Cost Savings
Who in the payer system saves money?
Who in the payer system saves money?
Published articles provide some evidence
but still vary
Published articles provide some evidence
but still vary
Private sources (such as market participants) show some compelling numbers but the public still desires further data
Private sources (such as market participants) show some compelling numbers but the public still desires further data
Proving cost savings within telehealth remains an arduous, seemingly never-ending task
Proving cost savings within telehealth remains an arduous, seemingly never-ending task
Who in the hospital system saves time and
money?
Who in the hospital system saves time and
money?
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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
Discharged from hospital
Discharged from hospital
Patient is selected and put on home monitoring
service
Patient is selected and put on home monitoring
service
The provider needs to monitor and interact with the patient
effectively
The provider needs to monitor and interact with the patient
effectively
The patient needs to adequately and competently adhere to the program
The patient needs to adequately and competently adhere to the program
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Continuing Barriers to Reimbursement
11One of the core issues for these home monitoring systems is that
they are complex solutions built of a number of sub-systems.
One of the core issues for these home monitoring systems is thatthey are complex solutions built of a number of sub-systems.
22This need for variety and customization is necessary to account
for the drastically different needs of home healthcare systems in different geographic regions and applications in the U.S.
This need for variety and customization is necessary to account for the drastically different needs of home healthcare systems in different geographic regions and applications in the U.S.
33This need for customization has made it very difficult for the CMS
to acquire consistent cost savings data, which is a typical steptoward national direct reimbursement.
This need for customization has made it very difficult for the CMS to acquire consistent cost savings data, which is a typical steptoward national direct reimbursement.
44State governments and other governmental organizations are
picking up the slack and passing policies to attempt to resolve these issues in their respective areas.
State governments and other governmental organizations are picking up the slack and passing policies to attempt to resolve these issues in their respective areas.
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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.
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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)
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For Additional Information
Johanna Haynes
Corporate Communications
Carol Skloss
Director of Sales
Healthcare
North America
210-247-3810
Antonio Garcia
Industry Manager
Medical Imaging & Patient Monitoring
North America
210-247-3886