The Western Governors' Association Telemedicine Action Report
Western Governors are committed to improving access to and
quality of health care for people living in the rural West.
To support this goal the Western Governors'Association
convened a Telemedicine Policy Review Group consisting
of telemedicine experts, senior state health officials, and
other interested parties. Six background papers were
prepared on major barriers to telemedicine. The recom
mendations developed by the Review Group and
contained in this document were based on those papers.
This effort was supported by grants from the
Henry J. Kaiser Family Foundation, Menlo Park,
California and the U.S. Office of Rural Health Policy.
The Governors thank everyone who participated in
developing the Telemedicine Action Report.
Table of Contents
Nationally known neurologist Theresa
Myers, MD is conducting rounds at the
Community Hospital in Coffee Creek,
Idaho, as she does every two weeks. After
pulling up the latest x-rays and lab results
on a computer for her patient Barbara
Collins, Dr. Myers asks the local
Physician's Assistant to describe Barbara's
worsening tremor. Dr. Myers then asks
Barbara to walk across the room, touch
her finger to her nose and write her name.
After watching Barbara, the doctor and
the PA are able to make a firm diagnosis,
discuss a plan for treatment, and arrange
for a follow up visit. Her patient appointments completed for the
morning, Dr.
Myers looks out her office window at
downtown Salt Lake City, thinking about
her "visit" to Alaska tomorrow, while
Barbara Collins drives back to her ranch
in rural Idaho.
Dr. Myers visited Coffee Creek through a
video conferencing link, and before the
day's end, she will be reviewing charts
and providing consults to physicians
located in North Dakota and Washington
state through the use of electronic mail.
These linkages are part of a far reaching
network that provides rural citizens access
to the best specialists in the region. And
although the meeting between Dr. Myers
and Barbara Collins has yet to take place,
projects are now underway that would
make such meetings a reality.
Each Western Governor knows only too
well that people living in rural areas have
limited access to basic health care and
uncertain prospects for the future. Access
is limited by geographic isolation, the
relative scarcity of rural physicians,
limitations on physician reimbursement,
poor public transportation to larger cities,
and even vagaries of weather that
impede travel.
Efforts to encourage physicians and
other health professionals to establish
practices in rural under served areas have
been only partly realized. Many western
states continue to look for solutions to the
problems of access to and quality of health
care for rural citizens, particularly when
health professionals are not available in
rural communities.
Although not a panacea, telemedicine
holds great promise to enhance health
care delivery in rural areas by allowing a
physician or other health professional to
examine a patient while linked by video
or other means to an expert consultant at
a distant medical center. Radiologists and
other specialists can review medical
images transmitted over telephone lines.
And university-based pathologists can
review biopsies done in a rural hospital
while the patient is still under anesthesia.
Without telemedicine, these services
would require travel on the part of either
the patient or the consultant, or would
simply not be available at all.
Rural health professionals who use
telemedicine are also likely to feel less
isolated from medical colleagues and
resources, thanks to the specialty "backup" and educational
opportunities now
available. Continuing education and
consultations via telemedicine are expected to improve recruitment
and retention
of health professionals in rural areas,
many of which would otherwise be without any local medical care.
Telemedicine's potential goes beyond
improving the health of individuals.
Telemedicine has been used effectively to
improve public health in rural communities by providing timely
information and
training for rural county health departments. Several projects will
use telemedicine to assist local citizens' organizations
to improve the overall health of their
communities by supporting anti-smoking,
accident prevention, prenatal care, and
Other public information programs.
Interest in telemedicine is also growing
among private physicians, other health
care practitioners, and managed care organizations as a way to
provide high quality
care in a more cost effective manner.
Today, telemedicine holds more potential
than ever to fulfill its promise of improved
access to health care for under served rural
citizens. Previous high costs and technical
limitations on telemedicine technology
have been significantly reduced and are
no longer a primary barrier The most
significant barriers to telemedicine are:
- inadequate information infrastructure
and uncoordinated infrastructure
planning;
- regulatory distortions, limitations on
competition, and fragmented demand;
- public and private reimbursement
policies that do not compensate for
telemedicine services;
- physician licensing and credentialing
rules that discourage physicians from
practicing telemedicine within states
and across state lines;
- concerns about malpractice liability
associated with telemedicine; and,
- concerns about the confidentiality of
Patient information.
If it succeeds in improving access and
quality, telemedicine is likely to increase
health care costs for society. On the other
hand, telemedicine is expected to improve
health outcomes, reduce patient travel and
time off work, and retain more health care
dollars in rural communities-all likely
to result in savings. Given our limited
experience with telemedicine to date,
these costs and savings, and their distribution throughout the
economy, cannot be
estimated accurately.
Western Governors, united by the need
to improve medical services in remote
areas common throughout the region, are
well-positioned to develop, advocate, and
implement strategies that can address
telemedicine barriers and foster experimentation. The purpose of
the Telemedicine
Action Report is to describe telemedicine
barriers and to provide the Governors
with steps they can take to help reduce
these barriers and to stimulate the development and utilization of
telemedicine
networks in the West. Close examination
of the telemedicine activity that results
will enable us to answer critical policy
questions about costs
and benefits.
Additional information on the telemedicine barriers discussed in
the Action
Report is provided in background papers
to this document under separate cover.
It is rare for emerging health care
applications to be factored into western
state telecommunications and information
technology planning or procurement.
Failure by state policy makers to consider
needs and solutions across the range of
state activities (education, criminal justice,
health and social services, etc.) can result
not only in missed opportunities for
capacity and cost sharing, but also can lead
to costly redundancies and incompatibilities.
In addition, state legislation regarding
telecommunications often fails to integrate
health care concerns. While few believe
that advanced telemedicine applications
can be cost effective as stand-alone systems,
many are convinced that telemedicine is a
significant component of an overall policy
that seeks increased public and private
investment in and increased use of network
capacity, especially in rural areas.
Disregard of integrated planning and
coordination can be expensive not only
within a state, but also when networks
cross state lines While the West is a
national leader in telemedicine, demonstrations have begun only
recently. When
these systems reach the state line, it is
essential that they be compatible with the
technical environment in neighboring
states. Two western demonstrations are
seeking to pioneer interstate telemedicine-the WAMI network in
Alaska,
Idaho, Montana, and Washington and the
High Plains Rural Health Network in
Colorado Kansas, and Nebraska.
Recommended Actions
- Governors should direct their
cabinet officials and budget directors
to integrate information technology
planning and development across state
agencies and within communities, to
consider the needs of telemedicine and
other health care applications, and to
foster continuing competition.
Integrated planning should occur not
only as part of periodic high-level
initiatives but also in the course of the
regular budget process. Governors
should also ensure that telemedicine
and other health care issues are considered during legislative
deliberations
on telecommunications policy.
- Governors should encourage all
providers and vendors that support
telephone, cable, and wireless,
providers, to create public/private
partnerships and to support nonurban information infrastructure
deployment and use.
- The Governors should direct WGA to
facilitate communication and coordination among the western states
as
they consider how infrastructure
development will impact telemedicine.
The Governors should direct WGA to
assist member states that have yet to
comprehensively address information
technology planning to learn from
states that are doing so, such as Utah,
Nebraska, North Dakota, and
California.
Limited competition for telecommunications services in rural areas
and
regulatory distortions created by arbitrary
boundaries, such as Local Access and
Transport Areas (LATAs), result in prohibitively high costs for
transmission services
needed to support high bandwidth
applications like interactive video. In many
rural communities, prices for intra-LATA
calls are unusually high and there is no
local access to the Internet.
State laws governing utility regulatory
commissions include prohibitions on
discrimination through rates or services
between similarly-situated customers.
These rules do not permit incentive prices
for telemedicine users and result in unnecessarily high
telecommunications costs.
On the demand side, small disparate
rural telemedicine networks and users
lack sufficient market power to negotiate
favorable rates and service from telecommunications providers.
Recommended Actions
- Governors should direct their state
utility regulatory commissions and
state Attorneys General to review and
recommend modifications to state
public utility laws and regulations
governing competition, pricing and
pricing standards, and depreciation.
Changes should be considered that
would lower prices for telemedicine
services likely to improve rural public
health and benefit society at large,
and that would encourage investment
and extend services to under and
unserved areas.
- Governors should encourage physicians, other health care
practitioners,
hospitals, rural communities, educational organizations, payers,
and
patient groups to unite both within
states and regionally. These interests
can create organizations of telemedicine consumers that can yield
economies of scale in purchasing,
exert greater influence in policy making,
and advocate interoperability in
technology across systems. Existing
rural cooperatives provide useful
models for telemedicine users.
Reimbursement policies for telemedicine
services by HCFA, private insurers, and
state Medicaid programs are currently limited and inconsistent.
HCFA has not yet
established a national coverage policy for
Medicare, but is working toward one.
HCFA does allow state Medicaid agencies to
establish their own coverage policies for
telemedicine. The lack of clear and consistent policy makes it
difficult to cover the
costs of telemedicine systems with reliable
sources of revenue.
Both public and private payers are
reluctant to set policy for telemedicine
reimbursement without detailed information about the costs and the
effectiveness of
specific telemedicine procedures and applications. In the absence
of reimbursement
policies, physicians and other health care
practitioners are unlikely to offer medical
services via telemedicine networks.
Currently, most telemedicine systems are
supported by state, federal, and private
demonstration grants that do not provide
stable sources of revenue for long-term viability.
Despite the uncertainties surrounding
the effectiveness of telemedicine's various
applications, public and private payers
need to begin to set reimbursement policy.
Even limited certainty regarding payment
will enable telemedicine activity to continue and expand. Greater
experience and
rigorous evaluation will provide a better
understanding of the costs and effectiveness of telemedicine,
supporting further
policy making on reimbursement and adoption of telemedicine in
managed care. This
"bootstrap" approach will enable policy to
be developed and adapted as our under
standing of these issues increases, and as
our experience with telemedicine grows.
Recommended Actions
- For the near term, Governors should
direct their Health Departments to
establish a task force consisting of
physicians, other health care practitioners, managed care
organizations,
third party payers, state insurance
commissions, rural consumer groups,
federal agencies, and other interested
parties to negotiate and set initial
statewide policy on telemedicine reimbursement. The task force
should set
policy in such areas as:
- what telemedicine services
to reimburse and in what amount;
- how to reimburse physicians
and other health care practitioners (i.e., the referring
vs. consulting practitioner);
- how to finance reimbursement
for telemedicine services; and,
- what incentives can encourage
reimbursement for telemedicine.
- To provide a framework for a regional
approach to reimbursement, the
Governors should direct WGA to support and coordinate task force
activities among the states. WGA should
also survey and disseminate current
reimbursement policy in western states.
- To provide a basis for reimbursement
policy, Governors should encourage
and support universities, public and
private payers, and other organizations
to study the cost effectiveness of
telemedicine services within states
and within the region. Information
gained from these studies should be
disseminated broadly.
Currently, physicians and other health
care practitioners must satisfy numerous
requirements to obtain a license to
practice medicine in each state, and to be
credentialed to practice at individual
health care facilities. Practitioners are
understandably reluctant to use multistate telemedicine networks
because of
the costs and administrative burdens of
complying with multiple Censure and
credentialing rules compared to the
expected frequency of network use.
There are two purposes for licensure
requirements. The first is to ensure quality health care services.
The second is to
regulate the commercial activities of
individuals that practice the healing arts.
Credentialing by health care facilities acts
to limit the license that the state has
granted. Local physicians and other
health care practitioners can therefore use
licensure and credentialing as a means to
protect their markets from out-of-state
competition. This market regulation
conflicts with policies that aim to
optimize the delivery of health care
within a region.
A long-running debate about the
wisdom of licensing and credentialing
physicians and other health care practitioners at the state and
facility level has
been taking place in Washington, D.C.
Decisive action by the Western Governors
will demonstrate state capacity to develop
solutions to this complex problem and
will help to avoid federal preemption.
Recommended Actions
- The Governors should direct the
WGA to form a task force of interested
parties to draft a Uniform State Code
for Telemedicine Licensure and
Credentialing (similar in principle to
the Uniform Commercial Code).
Participants should include state,
regional, and national medical societies, legal and hospital
associations,
the Federation of State Medical
Boards, rural consumer groups, and
relevant state regulators. The task
force should consider issues such as:
definition(s) of telemedicine, simplified licensing of individuals,
licensure
of networks, and requirements and
grants of credit for continuing medical
education. The task force could also
explore the possibility of expanded
interstate reciprocity in licensing and
credentialing as an alternative to a
model code.
- To address the potential concerns of
affected constituencies, the Governors
should direct the task force to analyze
the costs and benefits for patients and
telemedicine practitioners of opening
health care markets via telemedicine.
There is significant uncertainty
regarding whether malpractice insurance
policies cover services provided by
telemedicine. Telemedicine networks that
cross state lines create additional uncertainties regarding the
state where a
malpractice lawsuit may be litigated and
the law that will be used. Will the lawsuit
be heard in the state of the provider, the
patient, or in another state covered by the
network? Which state's law will govern
the case? Choice of venue and choice of
law issues can have significant financial
implications for the parties to litigation as
states differ in the statutory limits placed
on the amount of malpractice awards.
Recommended Actions
- Governors should direct their state
insurance commissions to review the
current policies of the malpractice
insurance industry with regards to
telemedicine, and to recommend changes
that encourage insurers to develop
clear and consistent coverage policies.
- Choice of venue and law questions
will be decided by the courts. The
Governors should request appropriate
legal bodies, such as the American Bar
Association and the National
Association of Attorneys General, to
draft legal policy opinions that review
federal procedures and state statutes
and give guidance to the courts to
assist in the resolution of venue and
choice of law issues in a telemedicine
malpractice lawsuit.
- To help create more certainty, Governors
should introduce legislation to amend
their state's malpractice liability limitation statute so that it
applies to
out-of-state telemedicine physicians
and other health care practitioners.
There are many views on the security of
personal information in electronic form.
Some believe that electronic patient
records are more susceptible to unauthorized access and
dissemination than are
paper charts on hospital wards. Others
believe that proper safeguards make
electronic information more secure than
paper records.
Patients wary of electronic data may be
reluctant to use telemedicine systems that
result in the creation or transmission of
confidential information. Physicians and
other health care practitioners with these
perceptions may be reluctant to use electronic systems which they
believe may
increase the risk of breaching patient
confidentiality.
Concerns about the confidentiality of
patient-identifiable medical information
are not unique to telemedicine As a
result, proposals exist that seek to establish a federal privacy
protection law for
medical records generally or that propose
a uniform model state code to establish
a minimum standard of privacy protection that would be adopted by
individual states.
Recommended Actions
- Governors should direct their
Attorneys General to examine and
consider proposed model state privacy
codes that would create uniform
standards for the protection of electronic medical records. Any
model
law considered should integrate
telemedicine confidentiality concerns
as well as address issues such as:
standards for third-party disclosure of
patient-identifiable medical information, informed patient consent
for
telemedicine services, regulation of
data banks to limit disclosure of medical information, and
exemptions for
emergency and trauma situations.
- The Governors should direct WGA to
assist in developing policy regarding
federal efforts to enact confidentiality
protections for medical records. This
policy should ensure that if a federal
approach is advisable, states have a
substantial role in shaping these
protections, and that particular
confidentiality concerns relating to
telemedicine are addressed.
- Robert Flaherty, MD
- The Virtual Medical Center, MT
- Douglas Perednia, MD
- Telemedicine Research Center, OR
- Thomas O. Singer
- WGA Director of Research
- Paul Orbuch
- WGA Counsel
- John J. Ambre, MD, PhD
- American Medical Association
- Ed Bostik
- High Plains Rural Health Network.
- Margaret Cary, MD
- U.S. Department Of Health & Human Services
- Francis H. Chang
- Henry J. Kaiser Family Foundation
- Helen Collins
- Health Care Financing Administration
- Jerry Hoffman
- NE Health Policy Project
- Sally Johnstone
- Western Interstate Commission for Higher Education
- Kathy Kelly
- Office of the Governor, WA
- Jerry McCarthy
- CO Rural Health Telcommunications Coalition
- A. Richard Melton, Dr. PH
- UT Department of Health
- Deb Muller
- SD Department of Health
- Dena S. Puskin, Sc.D.
- U.S. Office of Rural Health Policy
- Jon R. Rice, MD
- ND Department of Health
- Leslie Sand berg
- Center for the New West
- Richard Schultz
- ID Department of Health and Welfare
- Bill Steele
- CO Public Utilities Commission
- Russ Webb
- AK Department of Health
- Troy Eid
- Center for the New West
- Francoise Gilbert
- Altheimer & Gray
- Phyllis Granade
- Medical College of GA
- Jim Grigsby, Ph.D.
- University of Colorado
- William J. Halverson
- Network Associates
- Charles F Holum
- Doherty, Rumble & Butler
- Governor Ed Schafer, ND
- WGA Lead Governor for Rural Health
- Governor Michael 0. Leavitt, Utah, Chairman
- Governor E. Benjamin Nelson, Nebraska, vice Chairman
- Governor Tony Knowles, Alaska
- Governor A.P. Lutali, American Samoa
- Governor Fife Symington, Arizona
- Governor Pete Wilson, California
- Governor Roy Romer, Colorado
- Governor Carl T.C. Gutierrez, Guam
- Governor Benjamin Cayetano, Hawaii
- Governor Phil Batt, Idaho
- Governor Bill Graves, Kansas
- Governor Marc Racicot, Montana
- Governor Bob Miller, Nevada
- Governor Gary E. Johnson, New Mexico
- Governor Edward Schafer, North Dakota
- Governor Froilan C. Tenorio, Northern Mariana Islands
- Governor John Kitzhaber, Oregon
- Governor William J. Janklow, South Dakota
- Governor George W. Bush, Texas
- Governor Mike Lowry, Washington
- Governor Jim Geringer, Wyoming
- James M. Souby
- Executive Director
- Western Governors' Association
- 600 Seventeenth Street
- Suite 1705, South Tower
- Denver, CO 80202-5452
- (303) 623-9378
- (303) 534-7309 (facsimile)
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Last Updated: Tuesday, May 28, 1996, 8:43:54 AM
Allen Johnson - ND Health Dept. DP Coordinator - ajohnson@state.nd.us