Moving Our Eggs Out Of One Basket

According to Gary Capistrant, ATA’s resident expert on all things related to health policy, at least 73 million Americans, almost one quarter of the population, are now covered under some form of managed care. Such plans eschew the fee-for-service approach in favor of a fixed sum to provide health services with flexibility in what and how such services are provided. Importantly, federal restrictions on the use of telemedicine don’t apply to such managed care plans.

Managed care comes in many flavors. Medicare Advantage is offered mostly as a private managed care insurance plan and covers about 25 percent of all Medicare patients. About two thirds of state-run Medicaid patients are now enrolled in Medicaid managed care programs. Health reform, leading to 32 million more Medicaid enrollees will skyrocket that number in the next five years. On the private side, employer and private plans are all shifting away from traditional fee for service models and embracing various forms of bundling payments, incentives for cost reduction and coordination of care.

How important is this? Cigna, a traditional fee-for-service insurer is spending $3.8 billion to buy HealthSpring, which has 340,000 customers in its Medicare Advantage program in 11 states. Private insurers around the nation are rushing to turn their portfolio of covered lived from fee-for-service to managed care and, to further control costs, are becoming owners and managers of their own medical facilities and health services. It will be interesting to see if this leads to such dilemmas as United Health doctors pressing for privileges at a hospital owned by Aetna.

The rush toward alternative payment models is already shifting decision-making on services from the payer to the provider. To prepare, we need to shift traditional lobbying for a new CPT code or national payment policy toward efforts to convince health systems and even local providers on the benefits of using telemedicine.

Telemedicine Patents and Trademarks

Over the last three months, several ATA members have been contacted by lawyers representing a third party that was recently awarded a business-process patent regarding the use of telemedicine by the U.S. Patent and Trademark Office. The patent reportedly covers a physician simultaneously evaluating two or more remotely-located patients using a video-conferencing system. The following information is being provided because of the current member interest in this subject.

Patents for telemedicine are not uncommon and will likely grow as the industry matures. Typically, letters sent out regarding a patent claim reference the claim, suggest that the recipient may be in violation of the patent, and some offer to issue a license for the recipient’s continued use of the product or process. There is usually a fee or royalty associated with the license.

Patents are issued by the government in exchange for public disclosure of the underlying invention in order to protect the original inventor’s rights. In many cases, a patent is entirely legitimate and involves an appropriate claim of infringement. In other cases, questions have been raised about the validity and applicability of the patent.

When dealing with patents and trademark “cease and desist” or infringement letters, you may want to seek a legal opinion to determine the legitimacy and applicability of the patent. For instance, the patent may be invalid because it was issued for a product or process that had been in existence for many years prior to the claim (known as “prior art”). There are also cases of “patent trolling,” where an individual or group seeks to gain financial benefit from a patent with no intention to use it. You will want to consult with legal counsel as to how to respond to such demands.

More information on patents is available on the following websites

Copyright vs. Trademark vs. Patent
http://www.lawmart.com/searches/difference.htm

General information concerning patents
http://en.wikipedia.org/wiki/Patent
http://www.uspto.gov/patents/resources/general_info_concerning_patents.jsp

Patent Trolls
http://en.wikipedia.org/wiki/Patent_troll

Reed Franklin - a Colleague and a Friend

I am truly sorry to report that Reed Franklin, ATA's former Director of Public Policy, passed away earlier this week. He died of natural causes at his home in Arlington, Virginia.

Reed was an important part of ATA while on our staff from 2007 to 2009. His professionalism and quality of leadership raised the visibility of this organization within the nation's capitol. He was well known among Washington health-policy insiders and used his connections, his knowledge of the political process and expertise in government affairs to move our agenda forward. As a result, telemedicine gained significant support in Congress and among federal agencies.

In 2009 Reed decided to move over to the American Health Care Association (AHCA) where he served as the Director of Government Relations. However, he often returned to visit ATA. Demonstrating how Washington is often filled with insiders, his successor at ATA, Gary Capistrant, had also worked for AHCA earlier in his career.

More important to me, Reed was a friend. The son of a minister from rural Virginia, he stayed true to his roots, often telling about how he grew up as part of a community just like that featured on the Waltons television show. His good nature and his integrity came from these roots. A wine connoisseur, Reed served as our resident expert in such matters. His dry humor and mischevious smile added a spark to every staff gathering.

Ironically, Reed and I were planning to sneak away from our jobs this very afternoon to catch a Washington Nationals baseball game. I am glad to have known him.

White House Announcements, Regulations and Telemedicine

We are getting on the fast track.

President Obama recently announced a series of decisions to streamline the federal bureaucracy by eliminating hundreds of regulatory requirements across two dozen agencies, the changes could save $10 billion over five years. Included in the announcement was the May 5, 2011 decision to eliminate duplicative credentialing and privileging for telemedicine. CMS estimates that this will result in roughly $13.6 million in net savings.

The Administration and Congress are also considering a number of other regulatory changes related to telehealth that will further reduce costs and expand the availability and quality of care. Some of these were generated internally inside the Administration, others came as suggestions from ATA. Here are several examples:

• The President has personally declared that he wants to a policy that allows patients to have face to face video chats with their doctor.


• The Federal Communications Commission is streamlining a bureaucratically-clogged program to greatly expand rural health care networks.


• The Administration and Congress are looking at ways to eliminate red tape and allow patients to access doctors and specialists in other states without having to go through the delays, complications and costs of getting duplicate state medical licenses.


• CMS is considering changing regulations to allow Accountable Care Organizations to provide telemedicine services, reducing their costs and improving care.

Stay tuned...

Patents and Telemedicine

I have been writing about how telemedicine is finally going mainstream. That is good news. However, sometimes when you get to be popular you also get noticed by, well, others.

One area I worry about is Patent Trolling. According to Wikipedia, the term Patent Troll “is a pejorative term used for a person or company that enforces its patents against one or more alleged infringers in a manner considered (by the party using the term) unduly aggressive or opportunistic, often with no intention to manufacture or market the patented invention.” http://en.wikipedia.org/wiki/Patent_troll.

I provide this information because, over the past fifty years, telemedicine has grown enough to become a potential target of firms that have somehow gained a patent and seek to enforce it by sending out large numbers of certified letters demanding a license. As a technology-based industry, there are many patents that have been filed about various aspects of telemedicine. My advice to vendors and providers alike is to be always vigilent.

Of course, I am not pointing fingers at anyone. However, a few of you may be nodding your heads right now...

Six Misperceptions

Healthcare is a $2 trillion market in the United States and growing at a fast pace. For entrepreneurs, that figure is so alluring it is impossible to ignore. Companies, institutions and individuals from everywhere are looking to see how to get a piece of the healthcare market. It’s the gold rush of the 21st century and health technology is where a lot of companies are staking a claim. And now the attention is turning to telemedicine. The variety of new entrants is vast: vendors selling devices or software; sellers of remote health services; consultants and individuals simply wanting to get into the telemedicine job market. Every week there is a new conference, a newsletter or journal and even a new association targeting some aspect of telemedicine.

Based on the feedback from new entrepreneurs coming through the ATA offices it is apparent that there are a number of misperceptions about the telemedicine market. Here are six of them, learned over the past 18 years.

1. It’s not the technology, it’s the service. Dial up phones were a great invention. So was the VCR. They are both gone but telecommunications services and watching movies are bigger than ever. New and amazing devices and applications are coming on the market every day. But devices are tools that allow services to be provided at a distance. The focus, the purpose and the finances are on the service.


2. Despite what you hear, Medicare reimbursement is not the Holy Grail for telemedicine. It’s important, but… Medicare fee-for-service covers about 36 million Americans, 12 percent of the total U.S. population. 88 percent of Americans are covered elsewhere and 81 percent of healthcare spending comes from other sources. There are no federal restrictions on using telemedicine for billions of health dollars spent on managed care, bundled services and on alternative plans by private payers.


3. Healthcare institutions and physicians are partners, not the enemy. Transforming does not require replacing. So many new entrepreneurs in telemedicine start out with a negative, competitive attitude to traditional healthcare. We have not reached the point when someone with heart disease is going to trust their care to a computer alone. The role of doctors and hospitals is changing but they will continue to be the backbone of medicine.


4. Device regulation is not bad – it’s good; in fact it could rapidly accelerate adoption. FDA rules for wired and wireless telemedicine devices and their certification by an official government agency is a stamp of approval, providing reassurance for cautious buyers.


5. A great idea is born every minute but few of them are successful. I have heard of hundreds of stories about how a new technology, application or remote health service results in lower rates of hospitalization, improves compliance, etc. only to see it disappear a year later. Marketing, partnerships, revenue pathways and knowledge of healthcare business practices are essential, for starters.


6. Consumers don’t buy healthcare themselves. For fifty years the percent of spending on healthcare by consumers has dropped (not including insurance or co-pays). It is now about ten percent. Consumers are getting much more knowledgeable and engaged in selecting among available procedures and treatments but they don’t pay directly for healthcare products and services. The only exceptions are one-time beauty treatments and fitness fads.

I will no longer say “turning the corner” when it comes to telemedicine

For years we talked about reaching the point when telemedicine services became self-sustaining outside of temporary grants, going from promise to reality. We have long passed the point of telemedicine being a new application. After eighteen years the corner is turned and I promise to put that phrase away. This is what I mean about the reality of telemedicine:

• There are areas where remote health services have made a measurable difference in healthcare. At least half of the 5,000 U.S. hospitals are using teleradiology or other forms of remote imaging and the leading firm in this space, Virtual Radiologic, provided over 7 million reads last year. The Ontario Telehealth Network manages over 100,000 live physician-patient video consults a year for a variety of specialty and primary care services. The MedTrix Group provides 10-12 thousand video-based pediatric consults per month for the largest HMO plan in the Israel. The U.S. Veterans Administration is using remote health monitoring for 55,000 veterans.
• Revenue generated from telemedicine has resulted in profits for independent service providers and is a self-sustaining business within some healthcare delivery systems. For example, Epocrates, an online and mhealth drug interaction application is used by 1.3 million health professionals including 45% of U.S. physicians and reported a first quarter profit for 2011 of $3.7 million.
• Medical systems are integrating remote health care into the normal delivery of care. A recent survey of Washington, DC hospitals found that every hospital in the metropolitan area was using one or more telemedicine application as part of their normal delivery of health care for area residents. For example, to reduce time to catheterization , EKGs are transmitted from the ambulance to cardiologist’s cell phones at the George Washington University Hospital prior to arrival at the emergency room.

I tire of talk about needing to "prove the case." The argument that telemedicine is too new and needs more research falls away when looking at a list of a few other medical innovations that emerged around the same time or later than telemedicine (1960s-70s) and are now fully in use and reimbursed by most payer organizations including Medicare:
• Arthroscopic surgery
• CAT Scans
• Cochlear implant surgery
• Controlled drug delivery technology
• Deep-brain electrical stimulation
• Implantable cardioverter defibrillator (ICD)
• Laser surgery on human corneas
• Magnetic resonance imaging
• Permanent artificial heart implants
• Soft contact lenses

American States Lag European Nations in Licensure Portability

Allowing physicians the right of free circulation as providers of medical services within the 25-nation European Union is part of a founding EU principle for freedom of circulation of goods, persons and services. The EU lays out minimum training requirements for general practice and specialist physicians and provides for mutual recognition of physicians’ qualifications. It also enforces measures to ensure that the licensing provisions of individual Member states permit the free movement of doctors both to establish themselves and to practice their profession in all Member states. This is currently covered under the EU directive 2005/36/EC.

The 25 independent countries in Europe long ago figured it out. But the fifty states in America are still struggling with how to allow physicians to practice, and citizens to access healthcare across state boundaries. With the help of the Federation of State Medical Boards we are looking to put together a patchwork solution, but that still may be years away.

Shame on us.

On Snooze Alarms

A clever and well worn trick to resist change and protect the status quo by funding and regulating organizations is the use of demonstration or pilot projects. When faced with a constituency pressing for change, the official response is often to thank the group making the request and suggest that a demonstration project be established along with an evaluation of the outcomes. The decision whether to move forward is then postponed until after the final evaluation is completed. Such ideas may provide important resources for academic centers and researchers but are also commonly used to put off a decision.

All too often, the result of such studies are that more research is needed.

For ten years I was a proud government employee here in Washington, DC, and one of my favorite humorists at the time was the late James Boren, founder of the International Association of Professional Bureaucrats (INATAPROBU). The purpose of this tongue-in-cheek organization, according to Boren, was to "optimize the status quo by fostering adjustive adherence to procedural abstractions and rhetorical clearances.” It also promoted “feasibility studies, reviews, surveys of plans, surveys of feasibility studies and surveys of reviews.” The advice he gave us working in government was: “When in danger ponder. When in trouble delegate. And when in doubt mumble.”

It was funny because, for many of us, it used to hit so close to home.

Such “snooze alarm policies” have been effectively used for fifteen years as a way of resisting the use of telemedicine. Decisions on full reimbursement for almost every form of telemedicine have not occurred because “we just need more data” or that the research was not adequately designed or didn’t have a large enough sample size and a proper control group. Listening to such talk, one could come away wondering if telemedicine is just another far-out experimental idea.

Interesting. Especially when a search on Google Scholar for the terms “telemedicine” OR “telehealth” results in 98,000 references. Adding the term “outcome,” results in 28,500 references. Even PubMed lists almost 13,000 studies on the subject. Some of these date back over two decades.

No one in telemedicine is asking for blanket endorsement of each and every telemedicine application. Undoubtedly there are valid and important questions that need to be asked and answered about certain applications. However, there are also many areas in telemedicine that have been well researched, studied and proven to be useful for expanding access, improving care AND reducing costs.

Drastic health reform and innovations are needed in almost every country and by every insurer and employer. Donald Berwick, Administrator of the Centers for Medicare and Medicaid Management said “There has never been a better time to be an innovator in health care.”

We don’t need another snooze alarm; we need to wake-up and embrace the opportunities now before us.

A New Proposal for Telecommunications Support & Rethinking "Home Telehealth"

In December 2009 ATA provided comments to the Federal Communications Commission regarding a proposed national plan for broadband. The proposed plan called for broadband deployment to focus on rural communities. For healthcare, the thinking was to focus on access to rural health institutions and to the homes of rural residents. However, the use of wire as the primary technology for providing telecommunications access has been surpassed by the use of wireless and almost a quarter of all Americans rely entirely on wireless phones for their telephone service. The tether to "place" has been broken. That is why ATA suggested that “instead of home-based telemedicine, a more appropriate term is remote person-based care or personal telehealth.” We recommended that the broadband plan should be changed to include “a national goal of 100% coverage of broadband wireless services.” In conversations with FCC staff we encouraged the plan to shift from coverage of rural communities to coverage of people, regardless of their location.

So I am encouraged by an announcement today by President Obama of a new national broadband goal of 98% wireless broadband coverage for all Americans. As part of this, the FCC’s issued a Notice of Proposed Rulemaking (available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-11-13A1.pdf) to restructure its universal service program to provide greater support for wireless broadband.


This shift in thinking also challenges ATA and our members with the use of the term “home telehealth.” Such a phrase implies maintaining equipment only in the home and limiting remote monitoring to wireline services. In fact, the surge in mobile health applications and the use of wireless technology for all types of remote monitoring devices suggests a new paradigm for chronic care services. I would also caution against entirely shifting to the term “mHealth” as that, too, focuses on a technology and not the service.

We need to come up with a new term to better describe the use of telemedicine to support the needs of patients outside of traditional institutions. I am open to suggestions.