TeleMed III highlights market progress as companies prepare for growthNew legislation and software breathe life into telemedicineChanges in reimbursement rules and product development are stirring speculation that 1998 could be a banner
New legislation and software breathe life into telemedicine
Changes in reimbursement rules and product development are stirring speculation that 1998 could be a banner year for the telemedicine industry. That was the consensus of several speakers and exhibitors at November's TeleMed III conference in Anaheim, CA. New state and federal laws are already making telemedicine more accessible and affordable, and are challenging some of the industry's biggest barriers. The laws are also helping transform a once-disparate group of competitors into a focused industry, better able to identify and respond to customer needs.
"The Telecommunications Act was an extremely important step forward for the telemedicine industry," said Mark Goldberg, vice president of medical imaging services for Parexel International of Waltham, MA, and president-elect of the American Telemedicine Association.
The Medicare reimbursement provisions that take effect in January 1999 are also key, he said (PNN 9/97). As these laws are implemented over the next two years, new markets for telemedicine will open up, giving the industry a long-awaited boost.
"Telemedicine is clearly going to be part of the fabric of healthcare delivery, and what HCFA (the Health Care Financing Administration) and third-party payors think will eventually become irrelevant," Goldberg said.
Even so, the industry may presently be benefiting more from a timely convergence of technological advances and the advent of managed care than from well-meaning but limited legislation. At the Telemedicine Executive Summit, held in conjunction with TeleMed III, some participants suggested that reimbursement may be a perceived rather than actual barrier to telemedicine implementation. One speaker described a California telemedicine network that already supports consultations between a major medical center and a rural hospital without any reimbursement, even though the California Telemedicine Development Act of 1996 provides a payment structure for such services. In fact, no telemedicine reimbursement claims have been filed in California since the bill was passed, which could indicate that health-insurance and managed-care administrators need to be better informed about the new payment policy.
Other attendees said they believe the industry is benefiting more from the increasingly business-savvy approach many healthcare organizations are taking to telemedicine. Several TeleMed sessions emphasized the need to develop a viable business model prior to implementing a telemedicine program; others outlined the basic steps for building a successful model.
"A couple of years ago, only a select few people were putting telemedicine programs in place," said Linda Roach, director of the healthcare customer business unit for Austin, TX-based VTEL. "Now people are putting together programs based on business models and are expanding their programs and publishing on the value of their programs and the number of cases and outcomes."
This research is also helping the industry develop a clearer picture of the marketplace. As the healthcare community's interest in low-cost videoconferencing desktop solutions grows, many telemedicine vendors are trading hardware-based strategies for PC-based multimedia software packages designed to make the technology more ubiquitous. Vendors are also trying to better integrate telemedicine applications with existing hospital information systems.
Desktop products take off
The rapid evolution of telemedicine technology was evident at TeleMed III. At TeleMed I two years ago, only a handful of companies were talking telemedicine. This year, more than 30 vendors lined the streets of TeleMed's dedicated "Telemedicine Neighborhood," including such old-timers as Multimedia Medical Systems, MedVision, StarVision, Welch Allyn, Andries Tek, American Telecare, NEC, 3Com, and VTEL. In addition, at least a dozen exhibitors in TeleMed's concurrent sister meeting, TeleCon, were touting telemedicine products and applications, primarily for the desktop.
There were several newcomers as well, most offering low-cost multimedia desktop systems with both store-and-forward and interactive video capabilities. For example, Interactive Medicine of Valley Forge, PA, displayed its Paradigm desktop telemedicine device, which sells for under $10,000. The Windows-based system runs on most Pentium PCs and features digital capture and storage of multimedia clinical data and patient vitals.
Also promoting a multimedia desktop system was CyberOptions of Westlake Village, CA. The company, which has been in the telemedicine market for less than two years, claims to have 30 installed units at 10 sites (all part of a single telemedicine project in North Dakota).
The telemedicine business unit of CritiCom, a videoconferencing manufacturer based in Lanham, MD, introduced both a desktop and a laptop teleradiology system at the show; the desktop version features real-time video, while the laptop is designed only for store-and-forward applications. KLT Telecom and Telemedicine Corporation of America (TCA), both of Chantilly, VA, also displayed laptop products. KLT's Viewsend Medical system combines videoconferencing, telemedicine, and teleradiology in a single program that runs on Windows-based PCs or laptops. TCA's DistantCare system, designed for home health applications, is a mobile telemedicine platform that fits entirely in a small backpack.
Second Opinion of Harbor City, CA, was promoting its low-cost software package, which has found a busy niche market among children's clinics in assessing cases of child abuse. In 1996, the company had five sites; over the last 12 months, that number has grown to 72, according to Pam Weber, director of marketing.
InnovaCom, a Santa Clara, CA-based company, introduced a digital imaging and conferencing system designed for remote diagnosis and case management by pathologists, traumatologists, and other specialists. DTP-Digital TelePresence combines MPEG-2 compression technology with transmission options that include LANs, WANs, phone company data lines, small satellite distribution, and Ethernet.
Finally, 8x8, also of Santa Clara, attracted attention with its low-cost videoconferencing system, which uses a standard television set and a touch-tone phone to deliver low-resolution, real-time video over POTS. The ViaTV Phone comprises a video-processor chip, digital camera, and modem in a compact, set-top package that sells for $329 to $600.
The system is already finding application in the alternate-site care market, particularly hospitals and long-term care facilities that cater to homebound patients.