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Examining the Costs of Telehealth

Posted by James Baker, Chief Medical Officer | November 28, 2018 |
James Baker, Chief Medical Officer

The OrthoLive team meets regularly with clinicians, hospital and government administrators, and others in the healthcare field to discuss the ways our service might benefit the communities we serve. One of the questions we’re always asked is about the costs of telehealth, both in terms of delivering the service to patients, but also how a telehealth visit impacts the bottom line of a medical practice.

We tackle these issues in this article to discern the true costs of telemedicine service for all the stakeholders potentially touched by this technology.

What are the Costs of Implementing a Telehealth Program?

Rolling out a telehealth offering in a clinical setting can be highly expensive. But it doesn’t have to be. The medical devices used during the telehealth visit will vary by clinical specialty and the type of equipment used. They can range up to $10,000 or higher by clinical site, or, just a few hundred dollars per month per provider.

Telehealth software can be stored in the cloud or housed on-premise, and if you choose the cloud option, you will not have to make a significant investment to roll out telemedicine in your practice or hospital.

Let’s start with lower cost options suitable for even the smallest practice, and work our way up to higher priced offerings.

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One of the most cost-effective of all the telehealth platforms on the market today is OrthoLive. OrthoLive offers a web-based subscription plug-n-play telemedicine service for orthopedic practices. This service ranges from $100 to $299 per provider per month.

OrthoLive offers this product as software as a service (SaaS). SaaS are computer applications accessed online. SaaS applications are typically characterized as more affordable and scalable than on-premise software and hardware combinations. As is typical of other SaaS subscriptions, there is no special equipment to buy beyond Internet service and a computer or handheld digital device. While you could purchase a higher quality video camera to improve the quality of the video, it’s not necessary for the encounter’s success.

There are certainly more complicated telehealth applications on the market today. Hospitals can purchase wall mounted or rolling cabinetry with enclosed computer stations. The hardware may have an integrated PC and monitor, keyboard and mouse, a video camera and microphone.

There are also telehealth kiosks, which are stationary locations to access a virtual visit. eVisit saysThese kiosks are expensive and often only purchased by large companies or retail clinics to extend healthcare offerings to employees and pharmacy customers.”

Some of these applications also require high-end, high-resolution digital webcams with specialized medical tools that let patients aid the doctor in examining an injury or ailment. This could include tools like a mobile ECG device to track heart activity after a patient has been discharged from the hospital post-cardiac event. There are also vital sign monitors, digital otoscopes, and digital stethoscopes -- and more tools are being developed all the time.

Too, many hospitals elect to install the software on computers at their facility instead of in the cloud as a SaaS application. This requires the purchase of licensure, which can be very expensive, along with the servers or other hardware to house and secure the investment. Any on-premise equipment requires a technology team to back it up, particularly with cybersecurity a growing concern in the healthcare field..

Ironically, the OrthoLive SaaS platform is just as stable and secure at the more expensive counterparts. Data is encrypted throughout the telemedicine encounter and the application is HIPAA compliant.

At a time when the rising costs of healthcare are coming under increasing scrutiny, having lower-cost options to offer telehealth to patients is a welcome alternative to another large capital outlay on equipment.

What are the Costs of a Telehealth Encounter?

Beyond the costs of the equipment and software, there’s the cost of the actual telehealth visit to consider. Is a telehealth visit more cost effective over a traditional on-site patient visit?

One study broke out the costs of a traditional patient visit versus a telehealth encounter:

  • The average cost of an emergency room visit = $1,734
  • The average cost of a traditional on-site doctor visit = $ 146
  • The average cost of a telehealth visit = $ 79

The University of Pittsburgh Medical Center (UPMC) says they save $86.84 every time a primary or urgent care visit is conducted via telehealth instead of on-site. Telehealth can also alleviate the cost of inpatient or ER visits

Value vs. Cost of Telehealth

There are many benefits of rolling out a telehealth service line, but the technology’s true value comes from the cost savings to patients and their doctors. Patients save because the doctor comes to them during the virtual visit; the costs of travel, parking, childcare, and time off work can all be alleviated with telehealth. One health system said their patients saved $6.4 million annually in travel costs by converting their on-site visit to telehealth.

Doctors save on the overhead costs associated with providing an on-site visit. Electricity, building overhead, and clinical staff time are all reduced. Physicians also can skip traveling to provide care at a clinical facility, which can save their travel time and costs in addition to their patients. Telehealth can even alleviate some of the stresses of on-call, keeping doctors home while delivering care via a virtual visit instead of running in the middle of the night to a hospital.

The bottom line is that there is a lot of sophisticated, innovative telemedicine equipment on the market today. A logical approach, particularly for the small practice, is to determine how much equipment you really need to start your telehealth practice. The more equipment you purchase, the more training your staff will likely need. Healthcare providers should exercise caution when overspending on an overly complicated telehealth system when there are certainly more cost-effective competitors on the market that can offer some of the same benefits as more expensive tools.

OrthoLive offers a low-cost telehealth alternative designed specifically for orthopedic providers. Contact the OrthoLive team to discuss all the options available when considering a telemedicine service line.

Topics: Practice, "telehealth", "telemedicine", telemedicine cost, telehealth cost

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