A Survey of the
Health Telematics Industry

 
 

A Look at Canadian, American and European Experience
 
 


 
 

Index

The Health Telematics Industry * A look at Canadian American and the European Experience *

Background *

Telehealth faces two major trends: increasing demand and technological advance. *

Increasing Demand *

Technological Advance *

Canada’s Experience in Health Telematics * Overview *

Challenges, Issues and Barriers *

Business Challenges *

Care Provider and Patient Challenges in Canada *

Appendix #1 A Survey of Canada’s Activities in Health Telematics by Region/Province *

American and European Approach to Health Telematics----Compared and Contrasted * General *

The American approach: *

The European approach *

Major differences in addressing the "non-profit" sectors such as health telematics *

Comparison between the American and European programs *

General goals of the programs: Citizens versus industries *

Main criteria for applicant participation: Users community versus producer's consortium *

Main criteria for applications eligibility: The "bottom-up" approach versus the "top-down" vision *

American Experience in Health Telematics * Background *

Rationalizing Health Telematic Industry and Processes *

Legislative Bodies of which there are two: *

Private Sector Bodies of which there are at least four. *

A health telematics disadvantage unique to America *

Three Broad Trends in American Health telematics *
 

1. Universities actively take the lead in many health telematics applications *

2. Hand held devices are becoming important for medical people on the move. *

3. Medical applications are merging onto the Web, expanding collaboration *


Background *

Healthcare online: Virtual networks spur collaboration *

European Experience in Health Telematics *
 
 
 

The Health Telematics Industry

A look at Canadian, American and the European Experience

Background

Telehealth is the use of communications and information technology to deliver health and health care services and information over large and small distances. At a time when health industries and service providers are generally increasing their use of computers and telecommunications, there has emerged a new and rapidly evolving high technology market segment that is the telehealth industry.

Telehealth is an industry born of the confluence of information technology and telecommunications (IT&T), health care and medical technology. Each of these three sectors are currently undergoing transformations, although in quite different directions. IT&T is enjoying an accelerated period of growth, with rapid technological and regulatory changes combining with high employment and increased market opportunities. Health care and medical technology, on the other hand, have lately been subject to downsizing, not only in Canada, but also in most of the developed world.

Early telehealth projects in Canada and elsewhere, were driven by the need to deliver advice, diagnoses, consultations or education in the context of traditional medicine and education, linking tertiary care institutions in more populated centres with first-fine health care providers in remote and isolated communities.

While these activities remain prominent, one of the most important trends in the telehealth industry today is that of integration of the various applications over one network or in a series of interconnecting networks, as in regional or community health information networks (CHINs). Today, telehealth systems can be employed in many different settings by different users - researchers, specialists, nurses, home care workers, pharmacists, general practitioners and patients - and can be designed to span a range of health care applications to meet different needs using a variety of technological combinations.

Telehealth faces two major trends: increasing demand and technological advance. Increasing Demand

Depending on the type of application, several market drivers are influencing the industry:

        • An aging population: The needs of aging health care consumers have initiated efforts to develop and adopt better telehealth systems outside institutional walls where they would be better geared for the home telecare industry.
        • Cost containment. Telehealth systems are facilitating redistribution of health care services, cutting down on duplication, potentially helping to reduce the number of drug interactions and inappropriate prescriptions, reducing patient and professional travel and generally contributing to better productivity and reduced unit cost.
        • Access: There is increasing demand for equitable access to health care services for inhabitants of isolated geographic areas (for example, in sparsely populated areas of Canada's North and in many parts of Latin America, China and Africa).
        • Demand. The increasing consumer demand for wellness and health information of all kinds has fuelled increased access to the Internet and the World Wide Web.
        • Increasing sources of information: The exponential increase in medical and health information has led to demands for better medical information management systems, faster and more efficient electronic access and better online research networks.
Technological Advance

The following technological features distinguish modern telehealth activities from earlier developments:

        • Technology and its economic significance Computer hardware, other more powerful technologies and communications bandwidth are becoming available at decreasing costs.
        • Improved big-capacity IT&T technologies. These include networks and high-speed inter-operating technologies, and permit the integration of different applications within one network, as well as integration of telehealth projects within the context of the total health care system.
        • Private sector involvement. this now is more prominent than in past telehealth projects, facilitating technology transfer and commercialisation.
Telehealth projects five to ten years ago were mainly driven by remote consultation needs (telemedicine) or distance health and continuing medical education (CME). But only 30 percent of today's Canadian telehealth projects are based on telemedicine. The largest number of start-up projects are concentrated on integrated health networks, one component of which may be telemedicine.

These evolutions have resulted in important changes for communities. Hospitals are being fused, downsized, shut down and modified to handle ambulatory care clients. The current era is also characterised by the linking of new technologies, by the provision of technologically mediated services directly to consumers, and by the gradual decrease in the role of the hospital as the central authority in health care in favour of electronically linking all services and participants in a community's health care system.

For the health care professionals, the central focus of this new era is the penetration of the electronic health record and the electronic or computerised patient record, of faster access to information even before it is published, and of more versatile desktop multimedia tools. New technology produces unmet educational and training needs at the same time as it offers more efficient means to keep up-to-date on developments in health. Health professionals at all levels need to keep pace with a growing number of new discoveries, developments, techniques and practices. CME provided by traditional means will never meet that demand. Telehealth networks facilitate distance education and tele learning.

The world market for telehealth systems and services is expected to grow dramatically over the next decade. In the developed world, the most important growth area is expected to be in the home care market, where a range of devices and technologies can be substituted for services traditionally delivered in hospital settings, or by visiting home care workers. In the United States alone, more than US$26 billion was spent on home care in 1994. Canadian provincial government budgets for home care alone amounted to close to $1.5 billion in 1995-96. The U.S. National Association for Home Care projects a 13-percent annual growth in home care to 2005. In Canada, home health care has expanded by more than 15 percent annually over the past five years. With closures of hospital beds and reduced in-patient stays for operative procedures, there is every reason to expect that Canada's future growth rate for home care will be at least as rapid as that in the U.S.

Canada’s Experience in Health Telematics

Overview

The new Canadian marketplace is expanding from national to global horizons and its economic base is shifting increasingly from resources to knowledge. These trends are causing Canadian industries to readjust their business approaches, and government must respond with new tools to help them adapt and innovate Both government and the private sector must develop and perfect the ability to address competitive challenges and respond to opportunities.

Telehealth development is closely linked to the development and penetration of information and telecommunications infrastructures. Many challenges, however, have to be resolved in Canada and in many parts of the world before the telehealth industry can experience significant growth. There is a clear role for the public sector and private industry to play in addressing these issues and challenges by working together.

Growth of this industry depends on a number of factors. Close partnerships are required between the customer/purchaser/user and system or service providers, and between content and technological system. In many countries like Canada, these entities are located in separate public and private domains, but good working examples exist where the best of both sectors partner successfully. The best telehealth projects and sites combine expertise of health users together with the best suppliers of technological innovations.

The prospects for Canada's telehealth industry are positive, since there is excellent potential in this growth sector. Many new Canadian telehealth companies are being created and more are identifying telehealth as one of their activities, but too few of these enterprises are known to potential purchasers and too little is known about Canadian telehealth capabilities in general. Familiarity of foreign markets with Canada's competence needs to be strengthened if Canadian suppliers are to participate fully in this growing global market. Public sector institutions and resources assisting in export market development will need to be brought to bear even more in the future to assist Canada's telehealth industry to capitalise on market opportunities.

In June 1997, more than 300 Canadian companies were active in the telehealth business, of which 121 have registered themselves in Industry Canada's Canadian Company Capabilities database. These Canadian telehealth companies are either very large, such as computer manufacturers and telecommunications carriers, or small, such as software developers, consultants, or R&D or service providers. Many businesses are new: 20 percent of the companies were created in 1997. Employment in the telehealth private sector companies is estimated at around 1 700 people, mainly highly skilled professionals and technicians. The combined estimated annual revenue of these 121 companies is $330 million. The industry is growing quickly: the projected sales potential is $1 billion a year by 2000, with employment at 5 000 people.

Much of the basis for recent growth and prospects of the telehealth industry lies in the fact that telehealth is one avenue for maintaining quality health care in an environment where budgets are constrained/declining. Canada spent an estimated $75.2 billion on health in 1996, or $2 511 per person, representing 9.5 percent of the gross domestic product. A decrease of 0.6 percent was recorded in 1996, which is the fourth consecutive year of decline in spending (disregarding inflation).

Canada's health care expenditures do not include special budgets for telehealth. However, a brief overview of telehealth systems available on the market today indicates there are many telehealth applications that can - and increasingly are - facilitating or substituting for conventional health care procedures. Current Canadian telehealth projects are valued at an estimated $500 million. Provincial and federal governments will spend another $500-750 million on telehealth sites and projects over the next three to five years.

A good deal of the goods and services contained in the budgets for these projects is supplied by imports, either purchases from abroad or products distributed through Canadian subsidiaries. At the same time, Canada's emerging telehealth industry has reached annual sales levels of at least $330 million, made up of revenues from projects and programs in Canada plus substantial export activity.

Profiles of telehealth companies in industry Canada's database show that 30 percent depend chiefly on telehealth business. For companies whose primary sales activity is reported to be telehealth products and services, their annual sales per company are in the $1-5 million range, and they are most often staffed by 20 to 25 people. For this group, their combined sales are at least $130 million. Taking into account the telehealth sales of other companies whose primary business is in other fields, the Canadian telehealth industry amounts to a minimum of $330 million annual revenues. While many Canadian companies are too small or too inexperienced to bid successfully on larger projects in Canada, it is expected that some recent Canadian public initiatives will help stimulate the industry and improve technological capacity of Canadian companies.

Challenges, Issues and Barriers By almost any measure, the telehealth industry in Canada, even in its oldest and best-known form - remote telemedicine - has remained until recently a health services subsection with a small devoted set of pioneers, researchers and practitioners operating in an environment dependent on government subsidies and research and development (R&D) grants. As late as January 1996, the field was still very small and had not grown much since its origins some 30 or 40 years ago.

Despite proliferation of new applications, the size of Canada's telehealth industry is relatively small and undeveloped. This state of affairs may be attributed to a range of barriers and major issues confronting the private and public telehealth industry.

Business Challenges

        • The industry is fragmented. Market distribution channels are absent and every firm entering this field does so at more than normal risk since there are few published market studies. It therefore remains difficult to make a business case for the adoption of telehealth systems.
        • Though a majority of the Canadian telehealth companies claim to be exporters, few are exporting telehealth products and services. In part, this reflects underdeveloped marketing capacity, including lack of familiarity with overseas markets and with foreign distributors for telehealth products. In addition, the shortness of the track record of many Canadian companies means a lack of knowledge abroad of much of Canada's telehealth capability.
        • While there is a demonstrated need for turnkey, trouble-free telehealth systems, there are very few companies capable of providing such services. Stable financing is difficult to find for both the private and public industries. Several smaller companies have either sold controlling interest or have struck viable partnerships with U.S.-based and overseas companies. Though this has advantages, it does mean fewer made-in-Canada technologies and products.
        • The federal government in its February 1997 Budget announced the creation of a health transition fund, which the provincial governments may use to help launch pilot projects including better approaches to home care. Fewer than 10 percent of Canadian telehealth companies are offering products and services in home telecare.
        • The evolution of telehealth-related technologies is so rapid that even small, young companies must invest with caution in any given product or system.
Care Provider and Patient Challenges in Canada
        • The industry is in its infancy, and many potential users have little knowledge or experience in the field.
        • Some 30 percent of Canada's telehealth projects involve medicine-at-a-distance, but physicians might not be licensed nor remunerated for their telemedicine work.
        • Telephone triage systems allow nurse-practitioners to provide health care advice over the telephone. However, potential liability issues exist.
        • With ambulatory care on the rise, home care telehealth technologies could be adopted on a wider scale but few technologies are available in Canada, and few professionals are aware of the range of the technologies available.
        • Confidentiality, privacy and security on the health networks are still causing concern among patients and providers alike.
        • Lack of common standards hapers the development of telehealth networks in Canada.
        • Good partnership models are needed to help private and public sector partners work together toward the implementation of successful telehealth systems.
Appendix #1 A Survey of Canada’s Activities in Health Telematics by Region/Province

American and European Approach to Health Telematics----Compared and Contrasted

General

American and European policies in the field of the nonprofit" sectors, such as health care, education and training, culture, administrative services, are remarkably different and highlight the way in which the two societies view themselves. The American approach: In 1992, President Clinton and Vice President Gore announced the "Technology Initiative." This stated that technology policy would be a crucial component in U.S. economic policy and that the National Information Infrastructure (NII) would become one of the most important elements in this technological policy. The NII produced by high representatives of U.S. administrations set up a series of actions and to complement the initiatives that private sector firms were already developing. The philosophy of this agenda was that government would not build the Information Highway itself, leaving this role to the private initiatives, but that there remained essential roles for carefully crafted government action to assure the growth of an Information Infrastructure. This explains the funded actions endorsed by the U.S. government in the fields of "universal services," highly risky pilot applications, regulation of information and telecommunication markets, norms and security, nonprofit applications, etc. The European approach The publication of the White Report in 1994 pointed out the necessity to launch new large technological programs in the field of the transport and telecommunications to sustain growth, to assert the industrial competitiveness of Europe, and to solve its dramatic problem of unemployment. The European public-led actions are far more ambitious than these endorsed by the U.S. government. The Telematics Application Programme (TAP), devoted at launching pilot applications of public interest was initiated. Here, the public-led actions are not limited to nonprofit sectors but also support mostly commercial innovative projects. The European initiatives and funds are clearly devoted at creating a market by supporting telecommunications and information industries initiatives. Major differences in addressing the "non-profit" sectors such as health telematics The Americans developed a specific program aimed at promoting technological innovation and new applications in the public and nonprofit sectors. This program is called the Telecommunications and Information Infrastructure Assistance Program (TIIAP). Besides this specific program, IITF also launched another program devoted to commercial infrastructure and applications, called the Advanced Technology Program (ATP). By comparison, in Europe, the "nonprofit" applications promotion, was included as one of the aims pursued by its general Telematics Applications Program (TAP). This difference in the ways they integrate the "nonprofit" concerns in their policies is not only a matter of management but raises important differences about their visions and definitions of this field of actions.

In the U.S. context, "nonprofit" applications mean noncommercial telematics services of public interest. In the European policy, the so-called "nonprofit sectors" such as health care, administration, education, etc. are approached as fields of potential development of profit applications. This is a clear divergence between the two policies. In defining specific programs aiming at launching pilot projects in the nonprofit sectors, the U.S. pursues a two-fold objective: to increase the social welfare of the citizens and at the same time to spread a sort of telematics culture into the population that could have a "lever effect" on the demand for remaining commercial telematics services or products. This is not the case for the European agenda where the nonprofit sector is only explored regarding its commercial or market value potentialities. This approach can explain the fact that in Europe there is no specific program dedicated to a "nonprofit" sector since this sector is only captured for its market promises.

At the end, both approaches are oriented towards market objectives but the U.S. vision tries first to set up users' culture by stimulating the development of telematic applications of direct social value-added for the citizens. In Europe the approach views the nonprofit sector as a promising field for the development of market value applications. One could say very crudely that the first one is oriented towards the users and the demand though the second one is more directed towards the producers The two different strategies lead to tremendous divergence concerning the pilot applications supported or funded by U.S. and European programs in the field of nonprofit sector.

Comparison between the American and European programs General goals of the programs: Citizens versus industries

In the U.S. the goals are oriented towards the users and the demand. As it is clearly mentioned in the NII, the U.S. wants to "widespread the use of advanced telecommunications and information technologies in the public and nonprofit sectors in order to build a nationwide, interactive, multimedia information infrastructure available to all citizens, rural as well as urban."

By comparison, the European goals are more industrial and focused on the competitiveness of Europe. The primary goal is "to promote the competitiveness of European industry and the efficiency of services of public interest and to stimulate job creation through the development of new telematics systems and services in such areas as telework and teleservices."

Main criteria for applicant participation: Users community versus producer's consortium

In the U.S., the program is clearly addressed to users' communities of nonprofit entities. The applicants belong clearly to the users sphere: State and local governments, nonprofit health care and public health providers, school districts, libraries and library systems, colleges and universities, social services organizations, public-safety providers, community-based organizations and other nonprofit entities. The principle of this program is based upon matching grants, that is to say, that the U.S. government will fund up to 50 percent of the total project cost and that the applicant is required to find the complementary funding among private companies. This help ensures that companies have a vested interest in the success of the projects and in timely return on investment.

In Europe, producers of services and applications are mainly targeted by the program. The program is addressed to "any legal entity (industrial enterprises, research organization, educational institutions, etc.), national, regional, and local authorities, appointed bodies, development boards and agencies." But, in most of the projects, the initiatives come from the producing industries, based on their assessment about what should be the users' needs. The principle of this program is also based on cost sharing but, in this case, the Commission can and does actually fund the companies. This policy could have a dramatic effect on their substantial involvement in the success and the dynamism of the project because it substitutes public investments for private ones.

Another difference between the two programs concerns the concept of applicant’s consortium. In the European program, criteria to select associations of applicants emphasize the transnational collaboration between member states (at least two states). The U.S. criteria emphasizes collaboration between applicants sharing same social relativity and needs. By these criteria, the E.U. program will give the privilege to transnational projects and transportable solutions or applications from one member state to another. The U.S. approach is more contingent, focusing on proximity applications devoted to a defined community of users.

The concept of a community of users is at the basis of the U.S. approach when the E.U. program gives priority to the building of the Union. Moreover, when U.S. tries to build the "Information Society" by stimulating applications of proximity with contents and interfaces clearly designed for a defined closed user group, the E.U. promotes generic pilot applications that can be used all over Europe. An example, in the field of health care services illustrates the point. In the U.S. pilot applications, one finds applications devoted to help the Public Health Services of New York to improve their preventive campaign against AIDS. The Europeans focus on generic systems of prevention applicable to any kind of diseases and social realities and refuse to fund systems too specific to one region or to one particular case of disease.

Main criteria for applications eligibility: The "bottom-up" approach versus the "top-down" vision

The European work program is based on a very complex description of the fields and domains of interest into which an applicant can apply. This description is structured by a complex mapping that vertically combines R&D efforts into telematics applications and horizontally combines R&D research into support actions and engineering activities. Regarding the applications description, the European program captures the efforts into a range of applications fully described by a closed and complete explanation of the domains where investments can be made and of the methodology to follow. By comparison, the American program appears really more open. The U.S. work program is only a list of potential domains of applications' developments. Starting with this simple list, applicants have to define their projects according to their own frame and interests. This strategy leaves a wider initiative and freedom to the applicants to define their scopes of applications.

In sum, the U.S. strategy is more liberal since it lets the users decide what is relevant to be developed according to their own needs perceptions. The European on one hand, advocates a "laissez-faire" approach while, on the other hand, it obliges free initiatives to tally with its proper frame of relevant applications to build the Information

American Experience in Health Telematics

Background

As American healthcare migrates from traditional hospital settings to physician offices, freestanding clinics, and even patient homes, access to information at the point of need becomes more important than ever. There are many thousands of people involved. in this rapidly growing industry. These include: telemedicine and teleradiology project managers, hospital-based clinicians, heads of hospital medical departments, private-practice physicians, nurses, chief executives in hospital administration, information, and finance at healthcare institutions, telecommunications managers, rural healthcare organizations, home-healthcare providers, private payers, and managed-care organizations

A study of the readership (15,000) of Telemedicine and Telehealth Networks indicated that

There were at least 1500 telemedicine sites in the U.S.

The Koop Institute Committee projected that the U.S. market for all types of health information systems will grow to $100 billion in the next five years. Low-cost networking bandwidth, which encourages the use of cheaper videoconferencing, and falling hardware prices will only encourage such use, the report said.

Spending more than $2 billion every day on health care services, America is grappling with a crisis in its health care system. From the Office of the President to state capitals to city halls across the country, plans to decrease costs while ensuring quality and access are being drafted and debated. Increased reliance on video conferencing and telemedicine is seen as critical in this struggle. These will become much more common tools of the healthcare provider, leading to more collaboration in general healthcare and medical procedures, and a significant reduction in inappropriate treatment

Rationalizing Health Telematic Industry and Processes The Americans concluded in the early 90s that while telemedicine may help increase access to high-quality, specialized medical care at a reasonable cost, use of the technology would not be widespread until barriers such as licensure, hospital admitting privileges, liability, privacy, and reimbursement were overcome.

Typically they approached these barriers with a two prong approach.

Legislative Bodies of which there are two:

      1. A congressional task force

      2. It saw the barriers as being largely interjurisdictional and particularly affecting people living in rural areas, military personnel on the battlefield, overseas travelers, and patients with diseases difficult to diagnose and treat. The main recommendation was that the Health Care Financing Administration set up a policy to develop and implement reimbursement policies for telemedicine. To do this some form of national licensure with state controls or a reciprocal licensing between regional telemedicine networks was needed to resolve the issue of interstate licensure
         

      3. Telemedicine Advisory Committee
A subcommittee of the Federal Communications Commission was set up a with a view that it would examine telecommunications rules and regulations that impeded or could enhance the development of telehealth applications.

The Committee was comprised of experts from the fields of health care, medicine, and telecommunications, from both the public and private sectors. The Committee reviewed telecommunications efforts that impacted health care; identified telecommunications regulatory, legal and policy barriers to the development of the use of telecommunications in the area of health care; and provided advice on telecommunications regulatory policies and laws to further the development of the use of telecommunications in health care, both nationally and internationally. The Committee was limited to 30 or fewer members met three times, released its report and disbanded


Private Sector Bodies of which there are at least four.

      1. The Andover Working Group

      2. This was established by Hewlett-Packard to focus on the implementation of healthcare standards and consists of vendors and users moving toward plug-and-play, standards-based solutions. One of the group's goals is to define end-to-end system profiles to ensure interoperability. In March 1997, the AWG announced the intention to establish two new Special Interest Groups (SIGs): one for DICOM, a radiological imaging standard, and the other for MIB

        Telemedicine vendor MedVision of Minneapolis recently joined the group to develop a common way to implement HL7 standards. MedVision will contribute a technical representative to Andover's team of advisers who are creating the enterprise communication framework. The framework will enable healthcare providers to access medical records, view high-quality medical images, and provide a link to legacy databases.
         

      3. Association of Telemedicine Service Providers (ATSP)

      4. This was set up by a group of telemedicine advocates aimed at providing advocacy and aiding telemedicine business development. The not-for-profit is focused on advancing the industry rather than the practice of telemedicine.

        Like the American Hospital Association AHA, the ASTP will target hospital organizations for memberships. The ATSP hopes to attract large networked healthcare organizations with an interest in telemedicine.

        Membership benefits include advocacy services, including an ATSP lobbyist based in Washington, DC; information services through the group's WWW site; and an association directory, newsletter, and conference scheduled for fall 1997. To make good on its promise to help develop the industry, the ATSP is tackling one of telemedicine's thorniest issues: liability. The group has already established a relationship with the Physician Insurers Association of America (PIAA) to develop a set of legal guidelines for telemedicine implementers.

        Both organizers are concerned about limiting liability for its members that provide telemedicine services To address those concerns, the two associations will work together on developing model patient consent forms; formulating standards and guidelines for patient follow-up after a telemedicine consultation; and creating a draft paper on legal obligations and expectations of telemedicine service providers.

      5. The American Telemedicine Association (ATA)
This is a non-profit association promoting greater access to medical care via telecommunications technology. Established in 1993, the association has quickly become recognized by government, industry, and the press as the official national body promoting telemedicine. ATA has taken the lead in defining and working to resolve many major barriers to the advancement of telemedicine.

It is located in Washington, DC, to work and consult at the Capitol. Its top priority is addressing the legal and regulatory barriers that could impact the full diffusion of telemedicine into the marketplace. Some of the more obvious of these are the ones of reimbursement, cross-state licensure, malpractice, and the Food and Drug Administration's position on healthcare communication technologies and software.

They hope to do this by creating an open dialogue with those in charge of the legal and regulatory infrastructure. The aim is to better inform them as to what the impact of the information revolution really will be-specifically, the impact of telemedicine-and how that interplays with what they consider to be an outdated, outmoded legal and regulatory system.

ATA promotes professional, ethical and equitable improvement in health care delivery through the application of telecommunications technology. The association implements these objectives by:

      • Promoting telemedical research and education
      • Assisting in the development of telemedical policy and standards
      • Educating government and industry leaders about telemedicine as an essential element in the delivery of modern medical care
      • Providing educational materials to public and professional organizations
      • Interacting with healthcare systems world-wide
      • Serving as a clearinghouse for telemedical information and services
      • Supporting local health care system initiatives in telemedicine, especially in medically underserved areas
      1. Association of Telemedicine Service (ATSP),
This is a trade industry organization representing the interests of telemedicine service providers, is located in Portland, Oregon. A health telematics disadvantage unique to America IN 1996 Arthur D. Little completed a study that alerted policymakers to the potential for significant health care cost containment through the use of telemedicine applications. The study identified more than $36 billion in specific annual cost reductions from several telecommunications health care applications. Local telephone companies have been vital partners in developing and deploying these applications-including home care, management and transport of patient information, claims processing, inventory control, video conferencing, and health care professional telecommuting-in communities across the country.

However, government restrictions significantly constrain the ability of seven key telecommunications providers, the regional Bell companies, to contribute positively in helping to solve the health care crisis.

Since the 1984 break-up of AT&T, the regional Bell telephone companies have been banned from providing any service (voice, text, data, image, and video) across the government-created service boundaries known as Local Access and Transport Areas (LATAs). There are 197 LATAs in the U.S., some of which have populations under 120,000. In addition to preventing the telephone companies from providing traditional long-distance services to their customers, the interLATA ban prevents them from linking hospitals, health care providers, and patients in any instance in which a LATA boundary would be crossed.

Creation of national and regional data bases on treatment outcomes-Numerous agencies and organizations are developing databases and standards of treatment outcomes. Ultimately, the health care industry and the patient will benefit. The data collection and retrieval integral to these applications often need to occur over interLATA facilities which are a critical component to any national or regional system.

The suppliers of products and pharmaceuticals, currently insulated from many factors ratcheting down hospital costs, have significant room to improve methods of communication, distribution, and warehousing. As economies of scale bring greater centralization, interLATA services will become more vital.

To the extent that this obstacle slows down the development of the American telematics industrial thrust an advantage is given to other countries such as Canada that do not suffer such encumbrances.

Three Broad Trends in American Health telematics In addition to some of the more universal trends in health telematics that spring from the traditional communications technology and the need to effect cost improvements in the medical profession, America has three trends worth noting.
    1. Universities actively take the lead in many health telematics applications
      America’s medical universities are leveraging their expertise in spin-off ventures that offer training and development of telemedicine programs. It is a rare application of any note that does not include a University as an active and dynamic leader.

      Some brief examples, in addition to the many mentioned elsewhere in this report.

      East Carolina University

      East Carolina University (ECU) has teamed with a group of private investors to establish Telemedicine Technologies, a commercial entity based in Greenville, NC, that offers training, consulting, integration, and product-development services. The ECU spin-off grew out of expanding interest in the university's telemedicine program. Prior to this commercial venture, the university established a telemedicine training center in 1996.

      The company emphasizes business and industry development As such it wants to be more than just an entity for the transfer of university technology and patents, seeing rather as an opportunity to be a real partner in this industry.

      The company plans to draw upon the expertise and experience of several disciplines essential to a successful "production" telemedicine program. They plan to work closely with the University, its School of Medicine, the local hospitals, and medical and health professionals to deliver training and consultative services. The innovative teamwork made possible by the joint effort of private and public entities promises a whole new range of applications.

      The company has also assembled a consortium of medical, communications, and information resources to assess, design, and implement new technologies and systems. Its strategic partners already include 3Com, Sprint Healthcare, and Welch Allyn.

      In addition to offering training, consulting, and integration services, they plan to develop and transfer telemedicine, informatics, and instrument technology from research to production projects. The goal is to offer a testbed for new product development and assessment. In return, the company would retain royalties on those technologies that become commercial products.

      The University of Texas Medical Branch

      The University of Texas Medical Branch (UTMB) at Galveston has teamed with the Teletraining Institute in Stillwater, OK to create the Open Gates Teletraining Institute.

      The UTMB venture positions itself as a leader in education on the distance-bridging technology in healthcare. The university has a long-standing track record as a telemedicine services provider, and in 1996 was named one of the top 10-telemedicine sites in the U.S. by Telemedicine and Telehealth Networks. The Teletraining Institute's contribution to the partnership is its expertise in providing educational programming and training in interactive technologies.

      Georgia University Provides Continuing Education for Doctors

      Georgia's healthcare providers are able to examine "mock" patients via telemedicine before they treat real ones.

      The idea for taking this approach to telemedicine education came from medical students' use of mock patients to sharpen their patient interaction and history-taking skills.

      Georgia Statewide Telemedicine Program will eventually link 59 healthcare and correctional facilities in a technological network that eliminates distance. For example, using telemedicine, a stroke specialist at MCG can examine a patient in a city hundreds of miles away. To date, 31 sites are operational and 40 have been installed.

      An extensive four and one-half days of technical, operational and follow-up training already is offered to new telemedicine sites before they begin seeing patients or presenting patients for consults. Participants learn about protocols and procedures and get hands-on training with technology such as otoscopes and ophthalmoscopes that let them examine ears and eyes as if the patient were in the same room. They learn telemedicine "etiquette" such as keeping an upper chest shot of the doctor on the monitor, not just a "talking head," and that they make direct eye contact by looking straight into the camera, not into the other person's face on the video monitor. Telemedicine coordinators and backup coordinators are required to attend these courses and healthcare providers and administrators are encouraged to attend.

      The new course is short and concise, lasting half a day and minimizing inconvenience for healthcare providers who can't close the office for four days. And it's virtually real, because participants will have mock patients to actually present or examine, depending on whether they are the referral or hub site.

      MCG hire and train "patients" for the course. Obviously the patients bring their own medical history with them, but they'll also get well-educated in the signs and symptoms of medical problems seen frequently via telemedicine. Patients with cardiology, neurology, dermatology, rheumatology, infectious disease and psychiatric problems have been some of the highest users of telemedicine since the program began in November 1991.

      The goal is to identify and train patients who live in each hub site area so as new healthcare providers move into these and surrounding areas, the hub site coordinator can contact the Telemedicine Standardized Patient Program Coordinator to schedule training

      Telemedicine Center staff work with others at MCG experienced in this approach to teaching and distance learning including Dr. Linda M. Lentz, internist and Director of the Standardized Patient Program for medical students; David Hunter, coordinator of the medical school program who also will serve as the Telemedicine Standardized Patient Program Coordinator; and Dr. Shary L. Karlin, Coordinator of Distance Education in the Division of Continuing Education. Telemedicine site coordinators in Thomasville, Dalton and Alma also are part of the development team.

      Telemedicine's new Standardized Patient Program is funded by $1 million available through Georgia Senate Bill 144, The Distance Learning and Telemedicine Act of 1992
      .

    1. Hand held devices are becoming important for medical people on the move.
Medicine is an important field that can benefit from convenient and online access to large amounts of reference information, as well as handheld access to communications and analysis capabilities. The best known handheld computer is the Newton MessagePad. The required application programs that will enable clinical use of the Newton PDA are now beginning to emerge. Important support now comes from Apple Computer, which has targeted health care as a major vertical market for Newton technology.

In view of this Apple Computer has set up a web resource to provide information about medical uses of the Newton and to serve as an archive of software presently available at various ftp sites. Download information can be accessed from this website.

Applications currently available have been broken down into several general categories. Descriptions of the software, contact information, and links to download available applications can be accessed from the following selections:

      • Patient Management
      • Reference Information
      • Quantitative Analysis
      • Wireless Communications
      • Newton Software Developers Page
While there are several other handheld computers in the market, the applications drawn from the Newton website will be used to portray the range currently available. See appendix # 2 for many examples of handheld applications.
    1. Medical applications are merging onto the Web, expanding collaboration
Background
With continued rapid advances in Internet and Web technologies and the growing number of Internet-enabled medical professionals, traditions based on paper are slowly deteriorating. If the drive toward lower administrative and medical costs continues unabated, the Internet, with its paperless, nonproprietary nature, and the consumer-oriented World Wide Web will inevitably play a central role in reengineering healthcare.

Investment capital is pouring into entrepreneurial ventures linking payers, providers, and healthcare facilities through virtual networks. The trend is being fueled by the Internet and developments in system interoperability.

If there is one point on which members of the U.S. healthcare industry can agree, it is this: The industry is awash in paper. In spite of computerization and the proliferation of proprietary information systems, healthcare is still very much driven by hard copy. Granted, the paper trail eventually makes its way into a digital format, but this two-step process has not solved the problem of accuracy, availability, and the excessive costs of working with what is, in essence, an information system that dates to an earlier age.

The need to cut costs, streamline bureaucracies, and offer more comprehensive care is leading to the creation of health information networks (HINs) as a way of sharing information between and among medical professionals and health plan administrators. Combined with the maturity of nonproprietary WAN technologies, and the emergence of the Internet and World Wide Web (WWW), the push for cost-effective, online, paperless transactions and the move toward a virtual medical record are gaining momentum.

A growing number of entrepreneurial companies, medical professionals, and computer engineers are banking on one fact: that the development of HINs, online administration capabilities, and nationally accessible virtual medical records will continue unabated. Investment capital is pouring into start-ups and traditional communications companies, all with the belief that healthcare will tap into electronic efficiency.

While some of these ventures focus on connecting health plans and employers, others are homing in on the information needs of medical professionals. That includes the need to share real-time, accurate patient data among physicians, practices, and disparate providers.

This move to adapt medical records to the online age is driven by a need to control costs, and the desire to better coordinate care. Entrepreneurs are joining ranks with medical professionals and computer specialists to develop a viable, secure virtual medical record.

Considerations that come into play when considering whether to use the Internet for application purposes include:

      • It is low cost;
      • Many scientific institutions in the world are connected to it.
      • It consists of a layered set of agreed-upon communication protocols, which are independent of machines and physical connection lines.
      • Telemedicine tools may be employed in an effective and inexpensive way, driven not by technology but by users' needs
      • It furnishes a common ground that has already been standardized, at least at a basic level.
      • It is now secure.
      • If it is true that there is safety in numbers, the Internet can be reasonably considered a useful way to deliver high-quality medical services.
Healthcare online: Virtual networks spur collaboration
Market evolution is demanding that healthcare organizations collaborate and connect to maximize resources and survive in a cost-conscious, competitive environment. To accomplish this without compromising patient care requires that information be accessible across the entire enterprise.

The industry has had this target in its long-range sights for years, but the line of vision has been out of focus. A clearer view of the requirements needed to meet this goal is emerging, however. The Healthcare Information and Management Systems Society (HIMSS) meeting in San Diego in February 1997 demonstrated that caregivers and facilities are eagerly embracing connectivity engines such as the Internet, intranets, and World Wide Web-based technologies as a way to decentralize information.

The concept of medicine on the Internet is not new, but widespread practice is. Because of its flexibility and low cost, the approach and its applications are bound to grow in importance to the healthcare industry.

"Go Web. Go full Web, and make your vendors go Web," urged Dr. Clement McDonald, a distinguished professor of medicine at Indiana University in Indianapolis.


European Experience in Health Telematics

Through a four-phase program, the European Commission will invest $175 million in a multitude of healthcare informatics and telemedicine projects

Telemedicine is not just a domestic endeavor. At least 17 European countries are pursuing telemedicine and telehealth projects, with hopes of easing physician shortages and reducing national healthcare budgets. As in the U.S., many of these programs are demonstrations funded by the government. But the tide in Europe is turning toward increased commercialization of telemedicine services.

The clinical mandate for most European telemedicine programs appears to be increasing access to emergency care and providing basic primary care services. The latter is seen as a way to decrease overall healthcare expenditures through early intervention. But several countries are also developing large-scale networks to integrate the range of patient and administrative data.

Programs in Europe embrace the range of technology, from simple to sophisticated. In Malta, for example, home-bound patients who need immediate care can use a telephone-based alarm system to call for help. Introduced in 1990, the Telecare service has about 3700 subscribers to date. A similar program, called CardioExpress, is successfully employed in Greece. The network links cardiology specialty facilities.

Telemedicine in Norway relies on a blend of still-image transfer and videoconferencing technologies to deliver teleradiology, video dermatology, tele-endoscopy, and robotic pathology. The program began in 1989 and is headquartered at the University of Tromsö.

The Norwegian program, like multiple other telemedicine endeavors, is aided by the European Commission, which sponsored about 45 telemedicine programs in 1994. That figure is expected to double by 1998, according to a 1996-draft report on telemedicine developed by the International Telecommunications Union and Inmarsat, a London-based satellite communications company. The projected growth is tied to the EC's goal of creating a competitive telemedicine industry while improving delivery of healthcare services.

As the number of telemedicine programs grows, the EC will be keeping close tabs on its investment, according to the ITU/Inmarsat. A key goal is to increase international competitiveness in high-technology sectors, a category that includes telemedicine.

Why the aggressive approach? Europe has much to gain if telemedicine fulfills its promise of increasing access to care and delivering that care more efficiently. The healthcare sector accounts for 8% of the region's gross domestic product. Through its four-phase Framework Program, the EC is investing $175.5 million in healthcare telematics projects such as multimedia patient records, medical image transmission, and medical care delivery to remote locales via telecommunications links.

In Spain's Canary Islands, a telemedicine network established in 1990 connects all hospitals via videophone. The Centre manages consulting for emergency as well as deferred care for Advanced Technologies in Image Analysis (CATAI), located in Tenerife. Patients are referred by network hospitals to CATAI, which evaluates them by degree of urgency and assigns the case to available specialists.

Abetted by telecommunications firms, other projects use high-end technologies to facilitate interactive telemedicine.

Telecom Finland has invested heavily in multiple telemedicine projects in that country, with technologies ranging from videoconferencing to still-image transfer. One program uses ISDN for transmitting gastroscopy scans in real-time. Use of desktop videoconferencing for telemedicine over an ATM line is also under way.

ATM may be a part of Portugal's National Network for Healthcare Information as well. Currently configured to run on ISDN, the network will ultimately link the country's 92 hospitals and 346 health centers. Headquartered in Lisbon, the project will facilitate clinical telemedicine services as well as integrated healthcare data networking. Developers project that in the future, evolution to ATM lines is possible.

In Greece, outreach clinics are providing teleradiology, telecardiology, and patient management services. Telemedicine research and development activities rely on both public and private funding. Technologies in use range from telephone lines to very small aperture satellites (VSAT) for transmission.

Besides investigating clinical applications, practitioners are also wrestling with telemedical concerns of universal import: liability, data security, and standards. The EC is funding two projects that focus on security and standards issues.

The first is SEISMED (Secure Environment for Information Systems in Medicine). Its development is critical because within the next several years, according to the ITU/Inmarsat report, all European citizens could choose to have their medical histories stored on a database known as Hermes. SEISMED is developing a system to ensure that confidentiality, integrity, and availability of data are maintained.

The European Technical Committee for Medical Informatics is focusing on the standards issue.

European countries deploying telemedicine: include: Belgium, Greece, Russia, Croatia, Italy, Spain, Denmark, Malta, Sweden, Finland, The Netherlands, Switzerland, France, Norway, United Kingdom, Germany, and Portugal.


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