Deploying Telemedicine Projects 1

Telemedicine –

The Movement of Healthcare and How to Succeed

Hung Tan

Bellevue Univeristy

Fall 2010.
 Deploying Telemedicine Projects 2

Abstract

Telemedicine is the use of medical information exchanged from one site to another via electronic

communications to provide medical information and services. The concept of telemedicine has

existed for many years. Recently, telemedicine services have been developed into practice and

become a trend in healthcare. Telemedicine has been a need and will be growing fast in near

future. The purpose of this paper is to provide the guidelines on how to deploy a telemedicine

project successfully. Healthcare provider need to consider all the external and internal factors

such as threats and opportunities, the clinic’s objectives, needs, and resources to determine what

telemedicine projects to implement and how to make them succeed.

 Deploying Telemedicine Projects 3

Introduction

“Many healthcare providers say that telemedicine is the key to health reform, arguing that the

technology can enhance record keeping, reduce waiting times, cut unnecessary hospitalizations

and reduce costs.” (Bransford, Nahabedian, and Waterson, 2010). In the digital era with the

dramatic changes in technology and personal demand, telemedicine offers a promise. “It has

been estimated that healthcare costs could be reduced by as much as 40% using advanced tele-

diagnostic techniques” (Bransfrod. et al, 2010). In addition to cost saving, there are many other

benefits that telemedicine can provide to the healthcare industry in terms of convenience, time

saving, and efficiency. However, there are also several challenges that need to be addressed in

order for a telemedicine project to be deployed successfully. “Thus, an approach needed to

facilitate the successful deployment of telemedicine within healthcare organization” (Lockamy III

and Smith, 2009).

Telemedicine

Telemedicine is the use of medical information exchanged from one site to another via electronic

communications to improve patients' health status. Closely associated with telemedicine is the

term "telehealth," which is often used to encompass a broader definition of remote healthcare that

does not always involve clinical services. Videoconferencing, transmission of still images, e-

health including patient portals, remote monitoring of vital signs, continuing medical education

and nursing call centers are all considered part of telemedicine and telehealth (American

Telemedicine Association (ATA), 2010).

The first officially recognized use of telemedicine was in 1959, when the University

of Nebraska transmitted demonstrations of neurological patients and case information to students

across campus. Another notable early project was the Space Technology Applied to Rural
 Deploying Telemedicine Projects 4

Papago Advanced Healthcare (STARPAHC) program, a joint effort of Lockheed, the National

Aeronautics and Space Administration (NASA), and the US Public Health Service (Lockamy III

and Smith, 2009). Nowadays, telemedicine has become a phenomenon in healthcare industry.

WinterGreen Research, Inc stated in its research Telemedicine Market Shares, Strategies, and

Forecasts, Worldwide, 2010 to 2016 that worldwide markets are poised to achieve significant

growth as the healthcare providers worldwide move to more cost efficient healthcare modalities

leveraging telemedicine. Vendors are building out localized direct physician based services

organizations, distribution partnerships, and e-commerce sites that support a telemedicine brand

in every region. Telemedicine is more cost efficient than nursing home or hospital care. Rather

than going to the hospital, patients could stay at home. As new telemedicine equipments and

services proliferate in the U.S. and worldwide, more and more vital signs based healthcare

delivery is being implemented (Research and Markets, 2010).

Telemedicine Services (ATA, 2010)

Specialist referral services. These services typically involves of a specialist assisting a

general practitioner in rendering a diagnosis. This may involve a patient "seeing" a

specialist over a live, remote consult or the transmission of diagnostic images and/or

video along with patient data to a specialist for viewing later.

Patient consultations. Using telecommunications to provide medical data, which may

include audio, still or live images, between a patient and a health professional for use in

rendering a diagnosis and deploying a treatment plan. This might originate from a remote

clinic to a physician's office using a direct transmission link or may include

communicating over the Web.

 Deploying Telemedicine Projects 5

Remote patient monitoring. This method uses devices to remotely collect and send data

to a monitoring station for interpretation. Such services can be used to supplement the use

of visiting nurses.

Medical education. Using this concept to provide continuing medical education credits

for health professionals and special medical education seminars for targeted groups in

remote locations.

Consumer medical and health information. The techniques include the use of the

Internet for consumers to obtain specialized health information and on-line discussion

groups to provide peer-to-peer support.

Telemedicine Delivery Mechanisms

Networked programs link. This is the connection between tertiary care hospitals and

clinics with outlying clinics and community health centers in rural or suburban areas. The

links may use dedicated high-speed lines or the Internet for telecommunication links

between sites.

Point-to-point connections. Private networks are used by hospitals and clinics that

deliver services directly or contract out specialty services to independent medical service

providers at ambulatory care sites. Radiology, mental health and even intensive care

services are being provided under contract using telemedicine.

Primary or specialty care to the home connections. The connections involve primary

care providers, specialists and home health nurses with patients over single line phone-

video systems for interactive clinical consultations.

Home to monitoring center. Links are used for cardiac, pulmonary or fetal monitoring,

home care and related services that provide care to patients in the home. Often normal
 Deploying Telemedicine Projects 6

phone lines are used to communicate directly between the patient and the center although

some systems use the Internet.

Web-based e-health patient service sites. Provide direct consumer outreach and

services over the Internet. Under telemedicine, these include those sites that provide

direct patient care.

Threats and Opportunities of Telemedicine

Telemedicine Challenges

Lockamy III and Smith (2009) said that the major challenges to the wide deployment of

telemedicine have been in the areas of expenses, quality of transmission, and the amount of

complex equipment required. Generally, challenges to deploy successfully a telemedicine project

can be grouped into 3 categories:

Legal. Telemedicine has presented some issues that create legal questions. There are two

concerns about legal aspects. The first is licensure and liability. Physicians providing

services across state borders may create licensure and liability issues. Challenges have

arisen in the regulatory arena because telecommunication is a regulated service

(Lockamy III and Smith, 2009). Telemedicine which is used for services that cross state

line or country border may cause hug complexity of licensure and liabilities between the

different territories; The second concern is confidentiality and privacy in which

telemedicine security play a critical impact. Privacy issues continue to haunt telehealth

applications. Just recently, hackers demanded $10 million from the State of Virginia to

return millions of patient records they stole. The hackers were not successful, but it

reinforces the need for greater security to ensure privacy when sensitive medical
 Deploying Telemedicine Projects 7

information is being transmitted or stored electronically (Bransford, Nahabedian, and

Waterson, 2010).

Cost. Financing the cost of telemedicine can be a challenge for hospitals. Identifying the

costs associated with one specific telemedicine service can make it challenging to

evaluate telemedicine deployment decisions (Sisk and Sanders, 1998). Ultimately, the

costs for acquiring, operating and maintaining sophisticated telemedicine technology

could be expensive. The start-up investment can be prohibitive for some institutions. The

initial hardware costs must be low enough to realize greater economic viability than

presently exists in traditional health clinics or mini-clinics. Training and maintenance to

effectively use the hardware can also be expensive. Also, not having the expertise at the

patient location compounds the problem (Bransford et al, 2010). Commercial

telemedicine systems represent a large initial capital investment for equipment and

information technology infrastructure, coupled with the ongoing costs or staffing and

maintenance (Nguyen, Kahn, and Angus, 2010). Generally, the new technologies result

in higher costs in the early stages. Rate of usage is a major factor in the cost-effectiveness

of telemedicine projects, because usage is generally low when initially deployed (Strode

et al., 1999).

Structure and Administration. This includes telemedicine infrastructure,

reimbursement systems, and supports healthcare workers wishing to use telemedicine.

Some small hospitals in rural areas may find it difficult to accommodate a telemedicine

project due to insufficient infrastructure. They may need to install wider broadband or

remodel hospital to facilitate new technology In addition, reimbursement concerns

continue to negatively impact telemedicine. There is proposed legislation to improve

 Deploying Telemedicine Projects 8

reimbursement provisions for telehealth services for both Medicare and other insurance

companies. For now, a physician will be less inclined to treat a patient using an electronic

alternative if the insurance reimbursement is significantly less than a traditional office

visit (Bransford et al, 2010). Finally, the studies of ICU telemedicine demonstrate

reluctance of physicians to delegate full responsibility to the telemedicine team. The

major barrier to implementation of ICU telemedicine is acceptance of the new technology

by administrators and healthcare workers (Nguyen et al, 2010).

Opportunities

Telemedicine is the movement of healthcare. As the age of the U.S. population and the number

of patients with chronic conditions continue to rise, hospitals are beginning to leverage remote

technology to improve post-discharge care and cut down on avoidable hospital readmissions

(Lawrence, 2010). In order to catch this increasing trend, there are external opportunities that a

healthcare provider can study and take advantages. The opportunities include:

Leverage the supports from the government.

System Reimbursement and infrastructure. As healthcare reform begins to change the

payment structure, episode of care reimbursement will provide the push for hospitals to

increase their chronic care management programs. Marc Holland – Principal of the New

City, N.Y.based System Research Services consulting firm, believes “there will be a

restructuring of the reimbursement system first with Medicare – which will require

validation through pilots – and all the private insurers will follow suit”. In addition, the

U.S Government pledge to increase the national network infrastructure means that rural

areas will have better, faster connections to link specialty services to the cities, and the

use of telemedicine for specialty services like telepsychiatry, telestroke and wound care
 Deploying Telemedicine Projects 9

may rise. According to Marc, “there is a billion dollars for improving the broadband

infrastructure in this country, and telemedicine was cited as part of that push” (Lawrence,

2010). President Barack Obama pushed for substantial funding for health information

technology in the America Reinvestment and Recovery Act (ARRA). This was passed

into law February 2009 (Brailer, 2010). According to the data from ARRA/HITECH,

there is $4.3 billion for broadband and $2.5 billion for distance learning/telehealth grant

(Onizuka, 2010).

Government grant for telemedicine project. The Federal government provides important

financial and technical support for the development of telemedicine networks through a

variety of research, grant and support programs. Grants administered by the Departments

of Health and Human Services and Agriculture have supported many state and local

initiatives, which are now helping thousands of Americans. Full funding for these

programs is vital as the nation’s healthcare system copes with a crisis of cost, quality, and

access (ATA, 2010). In total, the USDA has awarded more than $1.5 million in Rural

Utility Service (RUS) grants to hospitals around the country to fund expansion of e-ICU

critical care services to rural communities (Lawrence, 2010). Conejo, CEO of a hospital,

suggested small hospitals to go ahead and contact their rural community hospital

organizations or the National Rural Hospital Association or their state organization to

find out what monies are available and what programs are available for some

telemedicine projects (Anderson, 2010).

The growth of the market

Reportedly, 20% of all ailments represent 80% of the health costs. Half of the aliments in

the U.S. can be treated via technology – driven delivery system (Bransfrod. et al, 2010).
 Deploying Telemedicine Projects 10

According to a report from New York based PricewaterhouseCooper, the remote medical

care market for telehealth services is expected to top $1.8 billion by 2013, up from $77

million in 1995 (Anderson, 2010).

Integrate technology development to reduce cost and improve quality

The evolutions of technologies in telecommunication, computer device, user interfaces

(such as high speed wireless, 4G, WiMax, Bluetooth, Telepresence etc.,) are important

tools to make many telemedicine projects more feasible and reliable with a lower cost.

Currently, mobile technology telemedicine is considered the fastest growing. Jon Linkous

stated in an interview with HealthcareInfoSecurity.com (2010) “there are about 6,000

applications that are available over digital phones related to either healthcare or fitness.

Some of those direct to consumers, and some of those are used by health professionals.

So certainly that is the rapid growing activity.”

Internal Resources and Power

What is the roadmap for an individual healthcare provider to exploit its strengths and integrate

the peripheral opportunities to implement successfully a telemedicine project? Lockamy III and

Smith (2010) introduced the Strategic Alignment Framework for Telemedicine Deployment. The

model revealed that telemedicine projects should be designed and deployed within the context of

a healthcare provider’s strategy. Strategic alignment between a provider’s organizational

strategy, healthcare-delivery processes, and patients is essential to ensure that:

1. Strategic objectives are driven by patient needs and expectations.

2. Healthcare-delivery processes enabled via telemedicine deployment have a strategic

impact on the creation of customer value.

 Deploying Telemedicine Projects 11

3. Telemedicine is used to enable healthcare-delivery processes which facilitate the

achievement of strategic objectives.

Congruency between organizational strategy, healthcare-delivery processes, and patients can

be visualized as a “triangle” which links together these three elements. In 1997, Lockamy and

Smith developed a framework depicting the concept of a strategic alignment triangle for business

process reengineering. The framework has been modified to provide a conceptual model for

illustrating the concept of strategic alignment for telemedicine deployment (Lockamy III and

Smith, 2009).

Organizational Strategy

Strategic
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Alignment
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Framework For rm
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Telemedicine ce
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Telemedicine
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Deployment
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Technology
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Healthcare Performance Measures Patients

Delivery Process

Healthcare-Delivery Processes

Process management, as applied to healthcare environments, changes the emphasis of the

organization from functional performance to process performance, based upon multi-functional

performance criteria driven by strategic objectives and patient requirements. Process

management requires the support of senior leadership to promote organizational change and the
 Deploying Telemedicine Projects 12

extensive use of leading-edge information technologies such as telemedicine to facilitate

information exchanges and communication.

Patient Satisfaction

Effective telemedicine deployment efforts require that healthcare organizations focus on applying

this technology to critical healthcare-delivery processes which influence the patient’s perception

of satisfaction and value within the context of the organization’s strategy. It is important to note

that the use of telemedicine must not only address the needs of patients, but also internal users of

the technology. These users must be viewed as “internal customers” who are a part of an

interdependent “value chain” which directly impacts the degree of customer satisfaction and

value ultimately received by patients.

Performance Measurements

For healthcare organizations, these systems are comprised of performance criteria, standards, and

measures designed to monitor the congruency between a provider’s organizational strategy,

healthcare-delivery processes, and patients. Traditional performance measurement systems focus

primarily on the final results, usually expressed in financial terms. Thus, these systems fail to

measure the ability of organizational processes to consistently provide value to their users. In

addition, traditional performance measurement systems fail to measure core organizational

processes against established strategic objectives. Healthcare providers seeking to deploy

telemedicine within their organizations need to develop integrated performance measurement

systems which link together organizational strategy, healthcare-delivery processes, and patients

through the creation of the proper criteria, standards, and measures necessary to ensure

coordination and alignment along these three dimensions.

Telemedicine Technology
 Deploying Telemedicine Projects 13

Telemedicine technology is closely connected to telecommunication. The strategic use of

telemedicine not only enables enhanced patient satisfaction and value, but also multi-functional

and inter-organizational communication. Telemedicine technology must, therefore, be deployed

in conjunction with core healthcare-delivery processes rather than conventional functional

organizations.

Solutions for Telemedicine Projects.

A good telemedicine project will add value to the organization and leverage the opportunities.

There may be a lot of telemedicine projects that a healthcare provider can deploy. The healthcare

provider should conduct a decision analysis to prioritize the projects and implement the project

that has the most impact to the institution. Lockamy III and Smith (2009) provided five principles

of success for telemedicine projects. The foundation of these principles is the strategic alignment

framework for telemedicine deployment: strategic impact on the firm; significant impact on

patient satisfaction and value; performance measure; future improvement opportunities; and

project management. The order of these principles does not reflect the importance order of the

principles.

Strategic Impact On The Firm

Healthcare providers must assess the degree to which a healthcare-delivery process affects its

ability to achieve its stated objectives prior to its inclusion in a telemedicine deployment effort.

Telemedicine project should support the value of the institution. Healthcare providers who fail to

make such an assessment will likely expend valuable organizational resources without achieving

meaningful results (Lockamy III and Smith, 2009).

Significant Impact On Patient Satisfaction And The Firm’s Value

 Deploying Telemedicine Projects 14

Healthcare providers should only be engaged in activities which “add value” to patients and other

legitimate stakeholders who rely on their processes and systems (Lutz, 2007). This process can

directly or indirectly adds value to the patients and other stakeholders. Lockamy III and Smith

(2009) stated that the needs and expectations of both patients and other stakeholders must be well

understood and incorporated into telemedicine projects. Telemedicine deployments that ignore

stakeholder requirements will likely result in strategy-process-patient misalignments which

negatively impact customer satisfaction and value.

Performance Measures

Performance measure is an important process to evaluate the effectiveness of the project.

Lockamy III and Smith (2009) also believed that performance measures are needed to evaluate

the potential impact of telemedicine projects on patient satisfaction and value. Healthcare-

delivery processes which exhibit the highest improvement potential-based on the performance

measurement system become the primary candidates for telemedicine deployment.

Future improvement Opportunities

The telemedicine project should not only support the current objective but also be expandable.

The creation of a performance measurement system containing healthcare-delivery process

measures is necessary to monitor the alignment between a provider’s organizational strategy,

healthcare-delivery processes, and patients. The system can also be used to establish

organizational goals for continuous process improvement. Healthcare-delivery process measures

must be linked to organizational objectives to maintain proper alignment between core

healthcare-delivery processes and strategy (Lockamy III and Smith, 2009) .

Project Management
 Deploying Telemedicine Projects 15

Telemedicine projects should utilize project management approaches to implement feasibility

analysis, scope definition, problem analysis, and decision analysis. The project team should

conduct a critical review of the existing, consolidated and comprehensive methodologies

established so far for evaluating telemedicine projects (iap.esa.int, n.d). Project management

should focus on the following elements:

Establishing guidelines. The company needs to create a set of procedures and an

associated supporting toolset for evaluation model to access the project performance.

Return on Investment (ROI) analysis. The analysis shows the financial benefit of the

project. The analysis is built from an understanding of a complete revenue and cost

model. A ROI analysis model of a telemedicine project usually looks like below (med-

rt.com, n.d):

ROI Analysis for a Telemedicine Project

 Deploying Telemedicine Projects 16

The Scope And Schedule Definition. Telemedicine project needs to be set in a boundary of

business that the project may or (or may not) address. The scope should be defined based on

the identify baseline problems and opportunities (Whitten and Bentley, 2009). The schedule

should be supported by critical path analysis.

Change Management. It is common that changes may occur during the implementation of a

telemedicine project. Check points should be set up to access the feasibility of the projects.

Project team may need to adjust project’s terms to keep the project current. Change

management is a continuous process.

Conclusion

Telemedicine can be used as a process enabler for enhanced healthcare-delivery system which

result in higher level of patient satisfaction and value (Lockamy III and Smith, 2009). In order to

deploy successfully a telemedicine project, healthcare providers should analyze all the facets of

the project. Telemedicine has medical, technical, psycho-social, organizational, business and

societal aspects. Assessing telemedicine means to incorporate all these aspects ((iap.esa.int, n.d ).

Healthcare provider needs to analyze the threats and opportunities of telemedicine and

healthcare industry, then integrate them into the firm’s objectives, needs, and resources. The five

principles of Lockamy III and Smith (2009) provide the basic guidelines that can be used to

increase the likelihood of telemedicine deployment success:

 Strategic impact on the firm;

 Significant impact on patient satisfaction and the firm’s value;

 Performance measures;

 Future improvement opportunities; and

 Project Management.
Deploying Telemedicine Projects 17
 Deploying Telemedicine Projects 18

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