Telemedicine provider markets to managed care

Service targets chronically ill, early discharges

The marketplace demands that managed care plans reduce their overall medical costs to remain competitive. At the same time, the National Committee for Quality Assurance (NCQA) in Washington, DC, demands that managed care plans provide adequate quality controls and a wide range of outcomes measures in order to score well on its coveted managed care report cards.

The answer to finding the balance between cost-effectiveness and quality may be in the rapidly expanding telemedicine industry. For example, Strategic Monitored Services, a New York City-based company, offers managed care plans telemedicine solutions for two critical patient groups: the chronically ill and patients discharged early from the hospital. And managed care plans are noticing the benefits and cost savings.

"Medical information and the ability to achieve desired clinical outcomes will dominate the future of disease management," says Gregory J. Muth, president of Strategic. "We estimate our operating costs, including a central nurse monitoring station, telecommunications, and equipment, to come to about $30 per event. The average national home health visit costs about $104 per event. That makes telemonitoring of patients very cost-effective."

Strategic provides management and financial expertise for the execution and delivery of telemedicine services to hospitals, health maintenance organizations (HMOs), physician groups, and those interested in providing telemedicine services. The company has not developed its own telemedicine equipment, though. Instead, it contracts with telemedicine vendors to use the technology that best fits the patients’ needs. (For more information about matching the technology to patients’ clinical requirements, see p. 120.)

Telemedicine services offer several benefits to payers, says Loretta Schlachta, RN, MSHP, CHE, clinical director. They include:

• The cost of the services is less than the price of a hospital stay, even with the cost of the equipment and the 24-hour nursing attention.

• Patients are constantly being monitored so problems are caught in the early stages, reducing hospital admissions and emergency room (ER) visits, and improving patients’ quality of life.

• The services give managed care plans in competitive markets an additional service to offer patients.

"Managed care plans and other payers have a keen interest in obtaining market share," says Schlachta, who formerly served as clinical director for a U. S. Department of Defense telemedicine program. (For more information on the government’s Electronic House Call Project, see Case Management Advisor, Dec. 1996, pp. 161-163.) "[Telemedicine] gives a managed care company or a group of physicians a service that is comprehensive and that can be appealing and comforting to patients, who often feel like they are being thrown out on the sidewalk in today’s health care environment."

• Strategic collects and analyzes outcomes data, giving managed care plans quantifiable results.

"As the move in managed care and in the whole health care industry goes more toward an outpatient basis and even more from an outpatient to a home care basis, the arena of home telemedicine offers opportunities for bringing hospital-level, physician-level, and nurse-level care right into the patient’s home," Schlachta says.

Disease management is one of Strategic’s main focuses. "We try to keep chronically ill folks healthier by trying to catch things before they deteriorate. That way, providers can take aggressive action and nip problems in the bud before patients get to the point where they have to go to the ER, be admitted to the hospital, or go into the intensive care unit [ICU]," Schlachta says.

"As America ages, the population of people with chronic conditions will increase dramatically," adds James S. Logan, MD, chief medical officer for Strategic. "How can we adequately care for this growing population? Currently, we spend a staggering $470 billion annually on the direct costs of medical services related to chronic illness."

Strategic targets big-ticket chronic diseases such as congestive heart failure, asthma, chronic obstructive pulmonary disease, AIDS, and diabetes. "Across the country, these are traditionally the high-dollar chronic diseases for most health care organizations," Schlachta says. "These folks usually represent high utilization rates of health care resources. They’re in the hospital, the ER, clinics, and doctors’ office a lot. They also require a large amount of resources as far as medications.

"If we can control these patients, we can make significant inroads into health care costs and also improve the patients’ quality of

life. They can be better managed and stay out of the hospital," she adds. "Their family’s quality of life also improves."

Many chronically ill patients, including the frail elderly, and children, and disabled people with multiple medical conditions, live on the edge in terms of reserve capacity. If a patient with lung disease, diabetes, and hypertension gets a simple cold, for example, he could wind up in the intensive care unit on a ventilator, notes Schlachta.

"The chronically ill are fragile and labile in terms of their disease process. They live on the edge of disaster all the time," she says. "This is the population that if you catch subtle signs and symptoms and if they have frequent monitoring that’s not intensive but involves frequent contact, you can assess certain key parameters. Then you can identify problems quickly and make an intervention in collaboration with their physician to address the problem and thus keep them from deteriorating."

In addition to providing monitoring services for the chronically ill, Strategic also fills gaps in care caused by hospital stays cut short after a patient has had surgery or delivers a baby, Schlachta says.

"Getting out of the hospital quicker and sicker is a managed care trend implemented to reduce medical costs that often backfires when patients suffer from complications. Strategic uses home telemedicine technology to bridge that recovery gap. Where patients used to stay in the hospital for monitoring until they were out of danger, now they have the opportunity to be monitored safely in the home," she says.

For these cases, Strategic uses some of the more portable, mobile telemedicine systems that operate over standard phone lines. Postoperative monitoring is short-term, usually about two to four weeks. "Its purpose is to provide patients with the support and the monitoring they need to get over their surgery."

Home telemedicine is an answer for managed care; NCQA, which demands quality control; and managed care patients, who are demanding more attention, she adds. "You don’t want to be at home scared to death if you start to bleed four hours after a surgery. You have to have some type of recourse, and home telemedicine provides the opportunity to have around-the-clock health care attention and the appropriate care you need."

Strategic also is working on an initiative, called Women’s Health Monitored Services, that will be a specialty care service specifically for patients who undergo breast cancer surgery. The service will provide physical support postoperatively, as well as emotional support and coordination of services. The company is working on a protocol and will begin a pilot project soon.

Services such as Strategic’s will be more common in the years to come, Schlachta predicts. "As the cost of the equipment and technology in telecommunications continues to decline, more and more people will be able to benefit from it."

Video in the home might even become a standard of practice, she adds. "I think in the future everyone will expect to have a button that says ‘health care’ and be able to access a nurse or someone to give advice, much as you would call an 800-line now."

The potential benefits of electronically delivered health care services to the home are large, adds Raymond Schlachta, director of information technology services for Strategic. "Market forces will likely drive the deployment of either advanced or low technology networks to the home."

In order for telemedicine to expand, he says, the following forces must be at work in the health care market:

• commitment by physicians to prescribe the service regardless of technological sophistication;

• cost of equipment;

• reimbursement of telemedicine services by Medicare, Medicaid, and commercial health plans;

• ability of telemedicine companies to develop home-based telemedicine platforms that provide clear advantages to referring physicians.

[Editor’s note: For more details on Strategic, contact Gregory J. Muth, president, Strategic Monitoring Services, 1185 Park Ave., Suite 211, New York, NY 101128. Telephone: (212) 996-1613. Fax: (212) 831-1518. E-mail: Strategic_Monitored_Services@ CompuServe. com.

Or contact Loretta Schlachta, clinical director. Telephone: (212) 996-6113. Fax: (212) 831-1518. E-mail: 110010,3246@CompuServe.com. Or contact James Logan, chief medical officer. Telephone: (405) 364-7694. Fax: (405) 321-9703. E-mail: Telemed JL@CompuServe. com.]