Originally published in Health Care News, March 2008.
There is only one thing you need to know about telemedicine: Location doesn't matter.
The pathologist who examines your blood tests, the radiologist who reads your MRI scan, the internist who orders your prescription, or the nurse who reminds you to refill a prescription–none of these providers has to be in the same room with you.
Or in the same city. Or in the same state. Or even in the same country.
Transforms Medicine
Telemedicine could revolutionize the practice of medicine, especially for the chronically ill. Instead of making a two-hour, round-trip visit to a doctor's office, a diabetic could communicate with her doctor by telephone or email.
How might this work? A nurse in the physician's office could remind the patient by telephone, email, or text message to conduct an over-the-counter, home blood glucose test. The results of home testing could be sent to a physician electronically. The physician could then order prescriptions electronically, thereby taking advantage of error-reducing software.
Test results and medical records could be transported electronically from specialist to specialist. Adjustments to treatment regimens could be sent electronically back to the patient with instructions about treatment changes. Any sudden spike in blood sugar might prompt the nurse to call and inquire which food was recently consumed, so the patient could avoid future problems.
All these measures could potentially produce more and better care, but their use is not more common because third-party payment does not encourage such innovative services.
Improves Cost Control
Telemedicine could also revolutionize cost control. More than half of all visits to hospital emergency rooms in a given year are for nonemergencies that could have been resolved with a less expensive doctor visit. In many cases merely speaking to a doctor by phone could avert an unnecessary emergency room visit.
Just as the widespread use of the Internet lowered seller markups on every product from automobiles to groceries, and just as e-Bay has lowered the resale price of just about everything, telemedicine promises to have a huge impact on health care prices–unless no one is actually competing based on price.
In a system of nonprice rationing, telemedicine is not necessarily a boon to cost control. In fact, it could prove to be a disaster. If every Canadian patient had access to specialists or primary care through free telemedical services, it would bust the global budget in every Canadian province in the space of a few weeks because cost control there is achieved by rationing care.
Bureaucrats Impede Progress
That may explain why the principal obstacles to telemedicine are health insurance companies and government. As buyers of care, these two bureaucracies resist paying for anything other than face-to-face medical encounters for the same reason the Canadian government is likely to resist–they are afraid utilization will skyrocket, pushing up the costs to payers. While consumers commonly look for amenities they are willing to pay for, third-party payers look to limit spending.
As a regulator of care, government has erected another set of obstacles. Did you know it's illegal for a doctor practicing on the Texas side of Texarkana to treat a patient by phone on the Arkansas side of the same city unless licensed in both states? Did you know it's illegal for a doctor practicing in East St. Louis (Illinois side) to interpret X-rays taken for a patient treated in west St. Louis (Missouri side)?
Unless these relics of misguided regulatory excess are repealed, the telemedical marketplace for each citizen will be unnecessarily limited by the borders of the state in which they live.
Direct Payment Spurs Innovation
The most interesting developments in telemedicine are occurring outside the traditional third-party payment system.
For example, more than one million people subscribe to a nationwide service operated by Teladoc Medical Services of Dallas. They can talk to a doctor by phone, any time day or night–and they pay a fee for each consultation. They can arrange for prescriptions by phone and have their medical records transferred electronically to any doctor of their choice.
In most cases, people using the service pay with their own money. In some cases an employer pays the enrollment costs. But health insurers rarely reimburse for the service.
Teladoc was not initiated by government, and it is not connected to any insurer or non-governmental organization. It's just the free market at work. It's also an example of innovative, patient-pleasing medical services that would spring up if patients controlled more of their health care dollars.
John C. Goodman (john.goodman@ncpathinktank.org) is president of the National Center for Policy Analysis. His blog is available at http://www.john-goodman-blog.com/.
For more information …
"Convenient Care and Telemedicine," National Center for Policy Analysis, November 2007: http://www.heartland.org/article.cfm?artId=22678