Editor’s note: In addition to Janet Marchibroda (photo and linked bio above), this post was coauthored by Chris Fleming, Health Affairs Blog Editor.

What is telehealth or “connected health”? What is driving the use of connected health and what are its benefits? To achieve its full potential, what key challenges must be overcome? What are the central policy issues that must be addressed?

These are some of the questions explored by a group of leaders representing providers, payers, research and philanthropic organizations, and technology companies (listed at the end of this post), convened by Health Affairs and the Bipartisan Policy Center (BPC) last month. The session was organized partly to prepare for an upcoming Health Affairs thematic issue on connected health, to which former Senate Majority Leader and BPC Health Project Co-Chair Bill Frist—who chaired the discussion—will contribute.

What is “Connected Health”?

While federal and state laws have often defined telehealth as a two-way real-time exchange between the physician and the patient, several participants cautioned against defining it too narrowly, given the rapid evolution of technology in the marketplace. In addition to traditional telehealth services which enable clinicians to deliver care to patients using electronic means, other new services are rapidly emerging, including remote monitoring which uses devices to collect and send patient data from the home to clinicians to track progress and enable early intervention for worsening conditions, and secure email between clinicians and their patients.

Drivers and Benefits of Connected Health

BPC began the session with a discussion of current drivers for connected health, including an aging population and a projected increase in the number of Americans with chronic conditions, both of which will increase demand for medical services; a growing shortage of physicians; and the significant expansion in the availability of and use of online technologies in health care. (See notes 1-7 below)

Several participants, including those that currently use telehealth to deliver care, cited its benefits, including improving access to care (particularly for the elderly and those living in rural areas); reducing the cost of care, for example through reductions in hospital readmissions and transport costs; and increasing the convenience of care for patients—all benefits that have been cited in the literature. (See notes 8-10 below) A recent survey indicates that 49 percent of consumers would be willing to communicate with their doctors, nurses, or caregivers using online chat or a web portal and 69 percent indicate that they would be willing to do so using email. (See note 11 below)

Key Challenges and Issues

A majority of the session was spent exploring the issues and barriers that stand in the way of more widespread adoption of connected health.

Reimbursement Issues. Participants agreed that achieving fee-for-service reimbursement has been a long-term problem for telehealth providers, a trend that is just beginning to change but only in the private sector, with the recent move by commercial health plans to increasingly offer coverage for telehealth services. The Centers for Medicare and Medicaid Services (CMS) does provide fee-for-service reimbursement for telehealth services (outlined in Section 1834(m) of the Social Security Act) but to date, few payments have been made, largely due to several requirements that restrict eligibility. These requirements include the need for a patient receiving telehealth services to be located in a physician’s office, hospital, clinic, health center, or skilled nursing facility (vs. at home); the need for the patient to either be located in a “health professional shortage area” or participating in a federal telemedicine demonstration project; and the need for such services to be provided in “real time.” (See note 12 below)

One participant observed that recent Medicare penalties for hospital readmissions have stimulated the use of remote home monitoring for chronically ill patients. “Before the legislation [penalizing hospitals for] unnecessary 30-day readmissions, as we were recruiting patients … the integrated systems and the providers could only say, ‘Who’s going to pay for this $200 piece of equipment that will have to go into the patients’ homes?’ After the legislation, people were not only contracting with visiting nurses or home health agencies to provide the services, they were also buying them so they had the capacity, and the issue of payment completely disappeared.”

Several participants suggested that the growing trend toward new delivery system and payment reforms that reward outcomes vs. volume (which are outlined in proposed legislation to augment or replace the current Medicare physician payment system) provides a new opportunity for connected health, however regulatory barriers stand in the way of adoption of telehealth services within these new models, including the significant Medicare restrictions on telehealth services outlined above. Laws pertaining to advancing new models of care such as shared savings and bundled payments authorize the Secretary of the Department of Health and Human Services to waive such restrictions, but to date no waivers have been granted. (See notes 13 and 14 below)

Regulatory Barriers.  In addition to the federal regulatory barriers described above, several state regulatory barriers were also highlighted. Many participants noted that the requirement that physicians be licensed in each state in which their patients are located, as well as the inconsistency of state licensing requirements, are major barriers to the advancement of telehealth. Some states require physicians to be physically present in the state in which the patient is being treated, and some states require that a physician must have seen a patient at least once in person before treating him or her remotely. The Federation of State Medical Boards (FSMB) just announced substantial progress in an effort by state medical boards to develop a model interstate compact to streamline and speed up medical licensure for physicians who wish to practice in multiple states. Principles for the interstate compact were released by FSMB in October 2013 and drafting is currently underway. (See note 15 below)

But physician licensing is only part of the battle, said participants. One participant noted that many states have laws that prohibit prescribing across state lines. Another participant noted that more needs to be done to enable nurse practitioners to deliver care.

Lack of Interoperability.  Several participants noted that in order to achieve the full potential of telehealth, the current lack of information sharing and interoperability across systems must be addressed. Clinicians providing care for patients both through traditional means and through telehealth must have both the capability and willingness to transmit and receive information on a particular patient to and from other clinicians.

Having the capability for information sharing means having electronic health records (EHRs) that are interoperable—or able to both transmit and receive electronic information using standards. The current lack of interoperability across systems has become an increasing concern in the physician community one participant noted.

Participants observed that having the technical capability in place is only one part of the equation—clinicians, and the institutions in which they deliver care, must also be willing to share information. Another participant cited a physician who expressed a willingness to share information with patients but an unwillingness to share that information with the hospital across the street.

The lack of interoperability and information sharing between medical devices that collect and have the ability to electronically transmit patient data and EHRs was also identified as a key issue that must be addressed.

Looking Ahead: Priority Actions

When asked by Senator Frist to identify the “highest-priority policy actions needed,” participants cited these needs most frequently:

  1. Provide waivers for or revise outdated regulations that prohibit those engaged in new models of delivery and payment from taking advantage of telehealth to improve cost and quality outcomes.
  2. Address interstate-licensing issues and improve consistency of state laws.
  3. Improve interoperability of EHR systems as well as interoperability between medical devices and EHR systems; provide incentives for both information sharing among providers caring for the same patient and information sharing among providers and patients (including devices and software that contain patient-generated data).
  4. Engage and raise awareness of the benefits of connected health—and the barriers that stand in the way of its widespread adoption—among consumers.

Reflecting on the greatest driver for expansion of connected health, one participant summed it up best: The Internet is the “ultimate democratizing tool.” As consumers increasingly use technology to track and manage their health and demand the same from the health care system, the market will change. “Disruption is a good thing, but can be painful for those who have traditionally had control.”

Meeting Participants

Senator William H. Frist, MD, Former Senate Majority Leader and Co-Chair, Bipartisan Policy Center Health Project

Kirsten Axelsen, Vice President, US Policy, Pfizer Inc

Alice Borrelli, Director of Global Healthcare Policy, Intel

Humayun J. Chaudhry, DO, MACP, President and Chief Executive Officer, Federation of State Medical Boards of the United States

Thomas M. Dailey, Vice President and Deputy General Counsel, Global Strategy and Health of International Public Policy, Verizon

Sarah Dine, Senior Deputy Editor, Health Affairs

Joann Donnellan, Senior Advisor, Bipartisan Policy Center

Jeffrey H. Dygert, Executive Director, Public Policy, AT&T

Wendy Everett, ScD, President, NEHI

Chris Fleming, Blog Editor, Health Affairs

Nancy Gagliano, MD, Chief Medical Officer, MinuteClinic, CVS Caremark Corporation

Jane Hiebert-White, Executive Publisher, Health Affairs

John Iglehart, Founding Editor, Health Affairs

Kelly Isom, Administrative Assistant, Bipartisan Policy Center

Robert Jarrin, Senior Director, Government Affairs, Qualcomm

Ann Kempski, Director of Policy and Government Relations, Kaiser Permanente

Deanna Larson, Senior Vice President, Quality and e-Care, Avera

Margaret Laws, MPP, Director, Innovations for the Underserved Program, California Healthcare Foundation

Jonathan Linkous, Chief Executive Officer, American Telemedicine Association

Rob Lott, Deputy Editor, Health Affairs

Janet Marchibroda, Director, Health Innovation Initiative and Executive Director, CEO Council on Health and Innovation, Bipartisan Policy Center

Meg Marshall, Director, Government Health Policy, Cerner Corporation

Andy Mekelburg, Vice President, Federal Government Relations, Verizon

Don Metz, Executive Editor, Health Affairs

Mary Ella Payne, Senior Vice President, Policy, Ascension Health

Robert Popovian, Senior Director, US Government Relations, Pfizer Inc.

Martha Presley, Office of Senator William H. Frist, MD

Lisa Rawlins, for the Bipartisan Policy Center

Matthew Richardson, Associate Editor, Health Affairs

Ashley Ridlon, Senior Manager, BPCAN

Mark Segal, Vice President, Government and Industry Affairs, GE Healthcare

Shelley Stingley, Program Director, Rural Healthcare Program, Vulnerable Children, Helmsley Charitable Trust

Katie Tygard, Office of Senator William H. Frist, MD

Steven Weinberger, MD, FACP, Executive Vice President and Chief Executive Officer, American College of Physicians

Chris Young, Vice President, Special Project Implementation, Ascension Health


This post is based on a meeting convened by Health Affairs and the Bipartisan Policy Center Health Innovation Initiative. The statements made in the post are based on the meeting discussion and comments made by individual meeting participants and therefore they do not necessarily represent the views of all of the meeting participants, the Bipartisan Policy Center, or Health Affairs.


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