Economic Impact Of Telehealth Essay

1778 words - 7 pages

Economic Impact
The economic impact of telehealth is a critical factor to examine when looking at the feasibility of incorporating such technologies into practice. Exploration of economics is also essential as it has been posited that telehealth has the potential to deliver care to individuals that is cost saving in nature (Wade, Karnon, Elshaug, & Hiller, 2010). Furthermore, the estimated expenditure on telehealth services and technology is expected to reach into the billions of dollars (Berger, 2010). However, there are myriad individual elements that may be considered in the broad subject of economics, which complicates determining the economic impact in a parsimonious way (Bergmo, 2009; Wade, et al., 2010).
Providers are faced with having to weigh the expense of investing in telehealth technologies with the ability to generate enough revenue to cover these costs. This is often difficult as expenses in the literature can cover those directly linked with the delivery of care (healthcare costs) and those that are not directly related to providing care (non-heath care costs) (Bergmo, 2009). Some of the healthcare costs a practitioner must consider are items such as computers, video cameras, microphones, modems, routers, software and other components such as specialized stethoscopes and imaging equipment needed to assess an individual patient. The cost of these items can add up quickly. As one study estimates, the capital expenditure for the implementation of telehealth video conferencing can reach as much as $80,000. The cost of transmitting data in order to deliver these services can also reach $800-$2000 per month in spoke and hub type telehealth systems (Gamble, Savage, & Icenogle, 2004). These costs incur even more scrutiny by providers as they are often not reimbursed through Medicare and Medicaid (citation).
The method of delivering telehealth has been shown to play a role in determining start-up costs. Caffery, Smith and Scuffham (2008) commented that email based telemedicine methodology is often considered a low-cost form of telemedicine. In their study, they took into account staff costs (including counselors and administrative staff) and fixed costs (development and implementation of the email service). Fixted costs totaled approximately $11,995 per year for the development and implementation of a purpose-written email-based telemedicine system. Furthermore, supervisory costs totaled $61,454 per year. In another study, Palmas and colleagues (2010) accounted for the estimated cost of delivering case management services to underserved populations. The authors found that the cost of the telemedicine equipment and supplies for the clinical team, for the first four years of the study totaled over $100,000 (Palmas, et al., 2010). This does not take into account salaries, the costs of the bioinformatics team, and vendor costs associated with the project, which total into the millions. The higher costs are associated...

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