Telehealth: Where do providers fit in?

Wednesday, May 31, 2006

Home medical equipment providers may very well have a place in the supply chain for telehealth products and services in the near future, but one market expert recommends they look at all the variables before committing any resources toward this new frontier.
Gregg Malkary, managing director and founder of Menlo Park, Calif.-based Spyglass Consulting Group, recently published a comprehensive study of the telehealth market, which he refers to as Remote Patient Monitoring. The report identifies the key players in the RPM sphere to be home health agencies, academic medical centers, regional hospitals, government agencies and disease management companies. RPM technology, Malkary says, enables healthcare organizations to remotely monitor and manage patients with chronic diseases. Malkary offered his thoughts on a variety of telehealth issues in a recent Q&A session with HME News, including the HME provider's role.
HME News: Your report shows growing interest by healthcare organizations in home monitoring. What are the reasons behind it?
Gregg Malkary: The baby boomer population is aging and the healthcare industry doesn't have the facilities to handle all the chronically ill patients that will be coming into the system. The home is the ideal setting for providing care and RPM fits into this environment perfectly.
HME: Your report contends that although interest is high, healthcare organizations are making limited investments in RPM. There seems to be a conflict here. Why?
GM: They see the potential, but the sticking point is reimbursement. Payers--both public and private--are not providing reimbursement for them. There is limited incentive for healthcare organizations to make the investment themselves, but there is also low-hanging fruit for those providers who have capitated managed care arrangements based on a per patient/per month formula. Home health agencies are compensated on a prospective payment system, which is a fixed sum they can use however they want. RPM equipment can actually help them achieve better outcomes, which under the proposed pay-for-performance system, could eventually lead to higher rates.
HME: Do HME providers have a place in the supply chain as distributors? If not as distributors, is there another roll they could fill?
GM: The HME provider's role in the supply chain is an incredibly complex topic. I think there will be a number of ways to get this equipment to the end-user and the HME provider could be one of many options. I don't see them becoming the predominant distributors of this equipment, however. For one thing, they don't have the infrastructure it would take for widespread distribution. I think they would be wise to look for partners, such as disease management companies. There are a variety of functions HME providers can serve and they need to study the market thoroughly to determine the best opportunities available to them.