HHAs and assisted living facilities are probably the simplest markets for HME providers to target. 

Imagine a man with diabetes sitting in front of a device the size of a cigar box, which sits on his bedroom bureau. He tests his blood sugar with a glucose monitor and then points the device’s attached Web camera at his foot, which has a small wound. He subsequently pushes a button on the device, sending his glucose readings and photo to his physician’s office.

Minutes later, the man receives a call. His physician has reviewed the photograph of the wound and is having the man’s pharmacist deliver some strong antibiotics. The physician also says that if he had not seen the wound until their next appointment, it is likely the man would have lost part or all of his foot due to gangrene.

Science fiction? Not at all. The above is one small example of the power and capability of telehealth monitoring that is available today. Depending on the system, the man could have loaded results for weight, blood pressure, or pulse, or other data from home cardiac and respiratory DME. And just like science fiction of the past, the man could have talked to his physician in real time through the device’s built-in camera and LCD monitor.

Telehealth technology is here, but its full application, payor reimbursement, and distribution systems are still developing. It remains to be seen how HME providers can become an integral part of telehealth when it eventually becomes a standard of care, but it is not too soon to become educated and start developing clients for this rapidly emerging market.

The History of Telehealth
It is fitting that telehealth sounds like science fiction, because it was born from rocket science. The technology evolved from NASA and the US Defense Department, which needed a method for managing the health of astronauts on space missions and soldiers on the field of battle.

In the beginning, telehealth was simply a video consultation with a physician and limited to off-site patient vital sign monitoring. In telehealth’s next phase, known as “store and forward,” patient diagnostic test data was stored on a stationary telemonitoring device. The data was then brought to the health care professional, who eventually reviewed it on a computer or compatible telehealth device, perhaps days later.

The latest phase of telehealth is still “store and forward,” but now integrates the real-time power of the Internet. Now, when a patient presses the transmission button on a telemonitoring device, a nurse or physician can almost instantaneously receive and review the data on a secure Web site 24/7, and from any computer—plus get immediate alerts when the data reveals abnormal results that may require attention.

Schuyler Hoss, a Vancouver, Wash, telehealth consultant and president of Northwest Healthcare Management Inc, says, “Ten years ago, it was sort of the new frontier. The technology had no consistency, and there were real issues in the quality and reliability of data. Now, we have worked to a point where we have a great deal of consistency and there are standards and quality.”

Chronic Disease Management
While not fully implemented into today’s home care model, telehealth is certainly a reality. It is predominantly used by home health agencies (HHAs). Though telehealth generally is not a reimbursable expense, HHAs use it to reduce unnecessary hospital visits by identifying problems before they become acute, thereby reducing health care costs while improving patient care and satisfaction.

HHAs generally distribute telehealth devices to patients with chronic diseases such as asthma, chronic obstructive pulmonary disorder (COPD), congestive heart failure (CHF), diabetes, obesity, and wound care.

Hoss says, “CHF, COPD, and diabetic patients are the top three [conditions] that telemonitoring works very, very well for. And it works well not only for managing the patient’s condition, but also in terms of reducing costs, unanticipated emergency room visits, and unplanned hospital admissions. There’s pretty consistent data out there that you can reduce the total cost of patient care somewhere between 50% and 70% with these chronic patients.”

The DME that typically integrates into telehealth monitoring systems includes those that:

• measure blood pressure
• measure blood sugar
• measure blood oxygen (SpO₂)
• measure pulse
• measure temperature
• measure weight
• record peak flow
• record stethoscope sounds
• take ECGs
• digitally photograph wounds

Some of these durable medical devices are specifically manufactured by the telehealth companies for their own telehealth monitoring kits. However, many telehealth monitors can import data from other brands of health care diagnostic equipment.

When a device is not compatible with a company’s telehealth monitor, most systems allow the patient to manually input the readings, which are then transmitted along with the previously recorded data. For example, a patient could manually input the glucose results of an incompatible glucose monitor.

Telehealth systems are not just one-way data communication devices either. The most expensive systems have a video physician consultation through a Web cam, but more economical telemonitors simply use a touch screen that is either part of the main system or attached as a separate accessory. Health care professionals can use this feature to send customizable messages to patients, deliver schedules and reminders, ask preprogrammed questions, change medication, or inquire about degrees of pain. Patients then answer these questions via a touch screen that displays simple multiple-choice answers.

Chuck Jacobis, president of Cybernet Medical Corp of Ann Arbor, Mich, a telehealth company, says, “There are a lot of people who need medical attention, and there are not enough people to give them the attention they need. So the idea is to identify who needs what the most, and then try to get on the preventive side of things before they get out of control. A really good example is that a person who has CHF typically has weight build-up due to fluid before they actually have heart failure. And if you can detect the precursors to heart failure before a heart attack, the benefit to that is huge.”

Telehealth and HME Providers
While telehealth has matured enough to become a practical health care tool, it is still a niche market and will probably remain so until Medicare, Medicaid, and private payors reimburse its costs for equipment and 24-hour monitoring. However, there are still many opportunities for HME providers today. Right now, the market includes:

• home health care agencies
• Veterans Administration pilot programs
• Medicare pilot programs
• managed care organizations
• self-insured employer groups
• disease management organizations
• case management organizations,
• hospital specialty clinics
• senior and assisted living facilities

In these markets, HHAs and senior and assisted living facilities are probably the simplest markets for HME providers to target, stressing the cost savings and patient care and management benefits.

Jacobis says that there are several ways to present telehealth to these markets. He says, “It all goes back to you can measure and screen patients and, therefore, take early action, save money, and make everybody healthier. That’s the simple business model, but the question is, how does that affect different parts of the [health care] chain?”

Jacobis says HME providers can stress to physicians how using a telehealth system allows them to see patients who are actually sick, which enables them to handle more patients that truly need care. For hospitals, Jacobis believes that HMEs should highlight better bed utilization for patients that are truly in need of inpatient care.

For HHAs, Jacobis says that telehealth will provide greater patient satisfaction and fewer face-to-face visits, which will save human resources and time, and decrease rehospitalizations due to telehealth’s early detection benefits. Naturally, patients will appreciate telehealth for its potential for enabling them to be healthier and stay out of the hospital.

MED Group Venture
Jacobis and Cybernet recently announced an agreement with the MED Group, Lubbock, Tex, to distribute Cybernet’s telehealth services through its network of HME providers. MED Group CEO Bill Elliot feels that the affiliation with Cybernet “will allow our members to immediately participate in the home telehealth revolution. The MED Group and its dealers plan to be in the forefront of offering home telehealth solutions to the 30 million chronically ill patients in America.”

Jacobis says, “I think the sweet spot right now is the home care agencies that HMEs already serve with supplies, and the hospital systems that have a continuing contact with their patients after discharge. Those are the two key areas.”

Costs and Sales Structures for HME Providers
Jacobis likens the sales structure for telehealth to oxygen rentals. “When HME providers sell a unit, it typically has to be installed in the patient’s home, and then there is a monthly fee associated with the data transactions that are associated with the feed from that patient,” says Jacobis. “So, the HME gets a margin on the equipment that they place, they get a margin on the data service, and they also get, depending on the agreement with the ultimate payor, an installation fee too.”

No monitoring is performed by the HME provider. Rather, the medical institution or physician’s office acquires the data and responds to the alerts. However, HME providers must be trained to use the equipment, be able to install it in patient homes, and be able to teach the patients their responsibilities and how to use the telemonitoring device and all its diagnostic accessories.

For technical support, companies generally provide their own support personnel with toll-free telephone numbers. However, an HME provider may elect to take general support calls for nonrepair issues.

The cost for the telehealth monitoring equipment varies by the manufacturer, the device, and included accessories. The price can range from around $600 for the telehealth monitor and scale, to $5,000 for a system that has multiple measuring devices and visual communication.

Monthly rental fees charged for telehealth equipment  likewise vary by the make and model and market. For a system from Viterion, a telehealth company based in Tarrytown, NY, Pramoud Guar, president and CEO, says that HME providers can expect to charge around $80 to $130 per month per machine, depending on the unit’s accessories and monitoring services. Guar also says that HME providers can usually realize a 25% to 35% profit margin, depending on the services they bundle—and the wholesale prices are “somewhat negotiable.”

The Future
An indication of how telehealth is destined to become a major factor in the future of home health care is the Continua Health Alliance. Continua is an association of electronics and health care companies that are collaboratively working to set technology standards for telehealth solutions. The association includes big high-tech names such as Intel, Cisco, and Motorola, as well as health industry heavyweights like Pfizer, Kaiser Permanente, and GE Healthcare. In all, there are more than 60 major electronics and health care companies in the Continua alliance, and if they are investing time and resources into telehealth, it is a good bet that telehealth will be a part of the continuum of care in the near future.

In the meantime, telehealth will most likely remain a niche market until the technology becomes a standard piece of HME reimbursed by Medicare in particular, but also by Medicaid and third-party payors.

Telehealth legislation and telehealth regulations under CMS are being crafted. There are two bills in Congress, one in the House and another in the Senate, and CMS as well as private payors are conducting pilot programs across the nation, primarily in home health facilities.

Ann Howard, director of federal policy for the American Association for Homecare, Alexandria, Va, says that CMS and Congress must first solve a variety of issues before telehealth becomes a covered Medicare benefit. Lawmakers must decide about the reimbursement for the equipment and daily monitoring, what constitutes contact with a physician or health care professional, and deciding which part of Medicare will cover telehealth—Part A or Part B—as well as other questions. At this point, health care professionals are not reimbursed by payors for any telehealth interactions.

CMS is studying all of these issues under the 8th Quality Improvement Organization (QIO) Scope of Work, a 3-year Medicare quality improvement work plan. One of the goals of the plan is for the QIO, in conjunction with HHAs, to evaluate telehealth pilot programs. The results should be known by 2008. If telehealth confirms other studies that have shown significant costs savings and fewer rehospitalizations, it is likely that telemonitoring will finally become a mainstream standard of care. Howard is optimistic that there will be some kind of Medicare reimbursement by 2008.

Despite telehealth’s technological advancements, Howard does not expect it to ever be a substitute for a traditional face-to-face appointment with a physician or nurse. She says, “Telehealth is not going to replace hands-on clinical services. It is a complement to it, and it ensures more just-in-time encounters and helps to prevent very costly encounters, which is a huge benefit to the payors and to the consumer.”

Tor Valenza is staff writer for Home Health Care Dealer/Provider.