To minimize costs through the use of telemedicine, Health Care Services should perform a more comprehensive comparison between the cost of using telemedicine and the cost of traditional consultations, beyond the guarding and transportation costs, so that it can make informed decisions regarding the cost effectiveness of using telemedicine.
CCHCS has fully implemented this recommendation. CCHCS has analyzed the costs between telemedicine and traditional consultations and found that telemedicine appointments are billed at the same Medicare rates as in-person visits; therefore, do not reflect cost savings over traditional specialty service encounters beyond the estimated $7.2 million in guarding and transportation costs avoided (Attachment 7 & 8) and potential litigation and public safety costs avoided.
Cost savings is not the only criteria for deciding between a telemedicine consult and traditional consultations as the primary goal of telemedicine is to provide timely access to care. Beyond cost savings and avoidance, Telemedicine Services provide increased access to medically necessary care, particularly in those remote locations where local medical facilities do not provide all the needed services to support the patient-inmate population. Additionally, the use of telemedicine reduces transport of inmates into communities for healthcare through remote management, increasing public safety. The use of telemedicine services is primarily based on efficacy and efficiency of patient care, as well as the needs of each individual institution, rather than cost effectiveness and those factors do not lend themselves to tangible measurement. Nonetheless, with program expenditures totaling $3 million in FY 2011/2012 and $3.3 million in FY 2012/2013 (Attachment 9), guarding and transportation estimated cost avoidance represents a net gain for the CCHCS Telemedicine Program.
Health Care Services states it analyzed the costs and determined that telemedicine does not reflect cost savings over traditional specialty services appointments beyond the savings from medical guarding and transportation costs avoided. Further, it states that the use of telemedicine provides increased access to medically necessary care, particularly in remote locations where local medical facilities do not provide all the needed services.
CCHCS currently compensates specialty contractors providing services through telemedicine at the same rate as those providing specialty services in-person at providers' off-site facilities. Although some telemedicine cost center information (e.g., claims payments; equipment costs, service, and depreciation; IT connectivity costs) is available, other cost elements, such as the value of increased community safety, improved patient access to specialty care, access-to-care litigation costs avoided, and others, are difficult to estimate/quantify.
The future implementation of an enterprise electronic medical record system creates the opportunity to follow patient-inmates receiving telemedicine specialty and primary care to review health outcomes and subsequent utilization as compared with similar patient-inmates receiving specialty and primary care that is not delivered through telemedicine, to refine comparative cost analyses.
Telemedicine Services has gained access to specialties claims data and is starting analyses relating those data to telemedicine scheduling system data. Telemedicine Services is investigating cost analyses methods used by other government and non-governmental agencies that may be usable in trying to quantify some of these intangible variables to inform a cost comparison model. Systems to collect these sorts of data in a standardized way have not been identified or implemented to date. Once improved data and staff expertise to perform analyses are developed, more detailed comparisons will be done on an ongoing basis to inform policy decisions.
The insufficiency of cost center data and inadequate cost analysis methodology and technical analysis expertise have delayed implementing this recommendation. CCHCS is trying to address both of these deficiencies in order to improve efficacy and quality assessments for telemedicine services to inform policy decisions.
Agency responses received after June 2013 are posted verbatim.