Telemedicine market ripe for growth
Find out why telemedicine is an appealing investment opportunity and discover the reasons for growth in this area.
Driven by technological advances, rising health care costs and a shortage of critical care physicians, telemedicine has evolved from primary care visits to treatment of serious illnesses. In emergency rooms (ERs) and intensive care units (ICUs), offsite telemedicine companies partner with onsite providers to diagnose patients, monitor care and prescribe medicine.
In fact, a study by Global Market Insights says the global tele-ICU market will grow from $1.2 billion in 2015 to $5 billion in 2023. The study cites a growing geriatric population, rising occurrences of chronic disease and increasing medical care costs as contributing factors to this trend.
Telemedicine makes inroads at hospitals
Medical care delivery methods are changing quickly, which is why two of the most common new C-suite job titles in the industry are Chief Innovation Officer and Chief Transformation Officer, according to Healthcare Finance. Hospital networks have begun investing in virtual care and monitoring programs in order to grab a piece of the telemedicine pie, increase their market share and provide system growth.
The Mayo Clinic launched its telestroke platform in 2013, after a test program put neurologists from Mayo’s Scottsdale hospital into ERs at small Arizona hospitals virtually, according to MinnPost. The program led to a one minute median response time and a 14 percent increase in the accuracy of stroke diagnosis.
Today, small hospitals pay a monthly subscription fee to Mayo for telestroke, as they do in similar virtual care programs. These hospitals can advertise they partner with a world-class medical system, plus they don’t have to transfer patients out of their hospital and lose billings. For the Mayo Clinic, virtual care provides a brand new revenue stream.
Telemedicine is growing, and the American Medical Association (AMA) says half of U.S. hospitals use some form of it. With local staff assistance, specialists from top hospitals are now remotely monitoring health issues that range from high-risk pregnancies to heart disease, in patients at places that lack appropriate resources.
Health tech companies jump in
The goal is for virtual care technology to improve healthcare treatment and produce cost savings, and it seems to be on the right track. According to Crain’s Chicago Business, continuous data feed software from health tech provider Philips Electronics allowed Presence Hospital Network to treat 2,000 additional ICU patients and increase revenue by $33 million. Presence’s tele-ICU saved money on reduced patient ventilator days ($4 million) and occurrences of sepsis infection ($6 million) as well.
Philips telemedicine programs have grown to 50 health systems and 500 hospitals, allowing oversight of large populations and identification of high-risk patients. Companies like Philips produce health care technology – highly sensitive two-way cameras, pulse oximeters, oversize video monitors, advanced software algorithms – that hospitals integrate into ERs and ICUs, so specialists can interpret vital signs and interact with patients.
Smoothing the way for licensing and insurance parity
As hospitals and health tech companies expand telemedicine capabilities, licensing boards are working to ease restrictions. Currently, medical boards have jurisdiction over doctors and nurses licenses. A doctor needs a valid license in a patient’s state to provide medical care for an illness, and more than 17 states have joined a compact to simplify this.
Per the Wall Street Journal, more than 25 states have joined a nurse licensure compact in order to smooth out strict state-by-state licensing requirements. The latest compact calls for criminal background checks and requires the state that issued a nurse’s license be responsible for sanctions in the case of an infraction in another state.
The definition and reimbursement of telemedicine varies by state too, depending on whether coverage is provided by Medicare, Medicaid or private insurance. At last count, 32 states had passed parity laws that mandate insurance companies cover virtual care visits like they do in-person visits — though today this often excludes urgent and critical care.
As far as Medicare, coverage lags behind due to concerns telemedicine may increase rather than reduce costs if a large number of patients take advantage of it. Medicare’s virtual care covers only 20 percent of beneficiaries today, but legislators are aiming to expand eligibility.
As health care technology continues to advance, virtual care will likely continue to grow. There are already 54 telehealth ICUs across the U.S. today, including an Advocate Health Care facility in Oak Brook, IL that serves 15 hospitals and a Presence Health facility in Bolingbrook, IL serving ICUs at 11 hospitals. If governing bodies can pass less stringent rules for licensing and require broadening of insurance coverage guidelines, the outlook for telemedicine growth will be bright.