If you don't know where you're going, you're bound to get there
My personal observation shows there are roughly five reasons to establish a telemedicine program:
- Access to Care – Expansion of services
- Access to Market – Patient retention/acquisition
- Cost Savings/Avoidance
- Risk Aversion – Litigation & penalties
- Revenue Enhancement/Generation
Any of these 5 reasons, when incorporated into a telemedicine program, demonstrate the underlying principle that better medical outcomes can be achieved outside of the four walls of a hospital. Good programs consider at least two of the reasons above, and great programs have more across multiple service lines (i.e., risk aversion for readmission penalties for high acuity patients and cost avoidance of unnecessary pediatric ambulance transports).
Telemedicine is a small industry where people tend to know each other and share stories about experiences. Fueled by venture-capital speculation, there are dozens of new entrants into the digital health marketplace each year creating more confusion. Each suffers the same issues as those already established in the market. The only “pure play” publicly traded telemedicine company’s annual report reveals they likely all share the same challenges and risks. Here are 10 examples picked off the annual report of the established company:
- Our business could be adversely affected by ongoing legal problems to our business model or by new state actions restricting our ability to provide the full range of our services in individual states.
- Evolving government regulations may require increased costs or adversely affect our results of operations.
- We conduct business in a heavily regulated industry, and if we fail to comply with these laws and government regulations, we could incur penalties or be required to make significant changes to our operations or experience adverse publicity, which could have a material adverse effect on our business, financial condition, and results of operations.
- We have a history of cumulative losses, which we expect to continue, and we may never achieve or sustain profitability.
- The impact of recent healthcare reform legislation and other changes in the healthcare industry and in healthcare spending on us is currently unknown, but may adversely affect our business, financial condition and results of operations.
- A significant portion of our revenue comes from a limited number of clients, the loss of which would have a material adverse effect on our business, financial condition and results of operations.
- We could incur substantial costs as a result of any claim of infringement of another party’s intellectual property rights.
- Our sales and implementation cycle can be long and unpredictable and requires considerable time and expense, which may cause our results of operations to fluctuate.
- We operate in a competitive industry, and if we are not able to compete effectively, our business, financial condition and results of operations will be harmed.
- The telehealth market is immature and volatile, and if it does not develop if it develops more slowly than we expect, if it encounters negative publicity or if our solution does not drive member engagement, the growth of our business will be harmed.
To be clear, I am not picking on this particular organization. As a publicly traded company, they have to disclose the same risks inherent to the vast majority of vendors in the market. However, the more established players carry an additional business and technology transformation burden and incur more cost and potentially more debt because they entered the market before the “cloud revolution” and still have to make that adjustment to the cloud.
On the provider side, there is also a risk. There is a tongue-in-cheek saying among my colleagues emphasizes this mentality of, “I’m gonna get me some telemedicine,” referring to tales of companies rushing to get their telemedicine program up and running without proper planning.
Organizations that are going to bid and making purchases without clear direction and plan to execute is more dangerous than those suffering “paralysis by analysis” because once a program fails to produce the outcomes (clinical and financial), it’s harder to justify getting back in the game at a later date.
Going to bid before defining a strategy or letting a vendor guide your vision based on their technology puts the cart before the horse. The goals of vendors and providers don’t often align which means it’s not in the best interest of a company to rely solely on vendor recommendations. They offer good advice, but usually, it’s driven by the supply side driven and not genuinely based on what the customer needs. There is an approach which alleviates both the “paralysis by analysis” as well as the “rush to failure” method.
Start by reviewing a regional Community Health Improvement Plan or Community Needs Assessment, where you’ll find the pain points and requirements for managing the health of your local population. Use a data analysis/business intelligence vendor with data from separate repositories, to find the right demographic within your patient base to serve first. Once you identify the community you want to help, it will point you in the direction using the five reasons listed above to develop a telemedicine program. At this point you can leverage a consultant who can lead a telemedicine readiness assessment for your organization. The resulting SWOT tells you what is essential to launching a successful telemedicine program and will put you on the right track. It finds your internal champions as well as those who are not as enthusiastic about telemedicine. Doing this will give you a picture of where you are, where you want to go, and how to get there.