With it’s potential to improve access, create efficiencies and play a major role in supporting the goals of accountable care, telemedicine continues to gain acceptance and utilization.


The utilization of telemedicine has become common in various settings: hospitals, clinics, medical labs, doctor’s offices, nursing homes, assisted living facilities and even correctional institutions.  The delivery of telemedicine services extends across the US and the world. In 2010, telemedicine services in North America exceeded $500 million with an estimated 10% annual growth rate. BCC Research predicts the growth of telehealth from $11.6 billion to a $27.3 billion market by 2016 with the telehospital/clinic market alone expected to grow to $17.6 billion in that time.  According to InMedica, worldwide use of wireless remote monitoring devices is expected to grow six-fold by 2017, with the majority of users being monitored for chronic conditions. The top 3 telemedicine markets in terms of size and impact are home health care, disease management monitoring and remote doctor and specialist services.  Rated on a scale of 1 to 10, based on short term and long term revenue opportunity, stability of business model and the market’s transformative potential, home health care and remote services had overall scores of 8.5 and 7.6 respectively.

Expanding Role

The estimated 30 million people who are expected to become newly insured beginning in 2014 is one of the largest factors driving interest in telemedicine.  Healthcare reform emphasizes coordinated, accountable care, where telemedicine can play a major role.  With accountable care models employing new payment models to manage patient populations while improving quality and health outcomes, new strategic approaches are required for delivering medical care.  Telemedicine supports accountable care’s charge to provide coordinated care with remote monitoring, and increased access for patients to seek medical attention. Wolf Shlagman, CEO/Founder of Consult A Doctor even says, “Telemedicine is a perfect marriage of using proven technology to be able to lower the cost of care delivery and, in many case, improve access and quality.”  Using telemedicine as part of a fully implemented care management strategy can improve communication in the patient-provider relationship. The improved monitoring and patient provider communication also promotes cost savings by steering patients from high cost care settings toward care delivery via lower cost alternatives such as phone or video consultations.


The ACA directly supports telemedicine and pushes for provider-patient engagement, in order to meet the broad goals of accountable care and outcomes driven cost models. In the past year, seven (7) telehealth projects were awarded CMS innovation grant awards. Similarly, fifteen states have passed legislation that specifically authorizes reimbursement for telemedicine services and state networks have started to find niches to provide patients with services such as image sharing.  In the public arena, some facilities are going as far as implementing telemedicine platforms in every patient room to ensure comprehensive care and seamless transitions between care settings. As more data is collected and the development of the ACA continues, telemedicine is on track to see increased utilization for a variety of care scenarios.

Challenges to Growth

Even with the numerous advantages of telemedicine, there are many challenges to widespread adoption. These hurdles are 10% technology issues and 90% human or organizational factors.  The greatest challenges hindering telemedicine reimbursement, physician licensure and credentialing.

Telemedicine currently lacks a concrete reimbursement structure, such as proper documentation and set billing methods for services. Lack of structure and uniformity has caused many providers and organizations delay the implementation of telemedicine programs.  On the Federal level, reimbursement for telemedicine has limited which services and what locations are covered.   “Out of 22 telemedicine technologies, lack of reimbursement is an adoption hurdle for at least 7”, says research firm Gartner, “including those that produce high benefits for healthcare organizations like home health monitoring and remote video consultations”.  Licensing is another issue, as many physicians are licensed to practice in states that don’t allow the practice of telemedicine across state lines. Licensure requirements for telemedicine practitioners vary from state to state, but generally, physicians must be licensed in the state they want to provide telemedicine services in, as well as the states their patients are served in.  Acquiring and maintaining separate licenses for all necessary states is time consuming and financially problematic.  There are similar challenges to meeting credentialing requirements. CMS proposed changes to credentialing requirements of hospitals and medical facilities in May 2010, realizing the process to be particularly burdensome for small facilities in contrast to their larger counterparts.

Despite the limitations telemedicine faces, nearly 10 million Americans still benefit from its services.  Looking forward, US Rep. Michael Thompson’s proposed legislation, The Telehealth Promotion Act of 2012, aims to eliminate several of the bureaucratic barriers hindering the growth of telemedicine.  It advocates eliminating exclusions of medical services furnished via telecommunication systems from federal reimbursement and proposes that physicians licensed in one state can treat patients anywhere in the US. Under this legislation, accountable care organizations would be exempt from telemedicine fee-for-service restrictions, and hospitals would receive incentives for using telemedicine technology in lowering readmission rates. Telemedicine will likely succeed when it transcends from being viewed as just a novel technology to an integral part of transforming care delivery.  It’s important to encourage patients and providers to use telemedicine technology to provide monitoring, health maintenance and preventative measures.  When these changes occur the healthcare industry will begin to realize real financial and clinical value of telemedicine