Telemedicine Adoption in Elder Care: The Regional Divide

Telemedicine reimbursement is expanding across the country, but when it comes to using such technologies to support elder care, adoption is likely to vary by region, BDO data shows.

The July 12 CMS proposal to expand Medicare reimbursement of telemedicine—paired with advancements in tech—marks the tipping point for the mass adoption of telemedicine, especially when it comes to senior care. We expect the adoption of home health models in elder care to quicken in tandem. The exact pace of adoption, though, will differ between providers in the Northeast and the West.

But the reasons behind the home health regional divide may not be what you think.

How could expanded telemedicine reimbursement for physicians impact the home health market on the West Coast vs. the Northeast?
 
To set the stage, our Candid Conversations on Elder Care study found that providers are lessening their focus on facility-based models and ramping up investments in models like home health as they prepare for the growth of the aging population. In fact, 44 percent said home health is one of the top two segments they’ll invest in most by 2020 to prepare. Of those providers, more than half (52 percent) in the Northeast chose home health, compared to 35 percent in the West. We don’t think this means providers on the West Coast are behind, though—in fact, we think it shows that they’re largely ahead, and, to catch up, those in the Northeast are ramping up investment. 

One reason we think the West Coast has been so far ahead of the Northeast when it comes to adopting home health is because the metropolises of the West Coast have significant traffic problems and poor public transportation compared to those in the Northeast. This makes it no easy feat for an elderly person to make their way across the Westside of Los Angeles or the San Fernando Valley, for example. Home health, empowered by telemedicine, alleviates this complication for seniors when used in conjunction with caregivers or practitioners.

Expansion of telemedicine reimbursement for physicians is a boon to the home health industry and will likely heighten its relevance in the West, especially from a quality of care perspective. Telemedicine, including remote monitoring, has the potential to effectively reduce response times when a senior has an emergency, which could play a massive role in whether the emergency results in a life-threating situation. Quickened response times are also likely to reduce the costs of the emergency, resulting in a lower hospital bill for the patient and reduced healthcare costs overall.

Telemedicine will also likely support home health in a preventative way. With more convenient and regular access to care over the phone, seniors will be able to not only receive general medical counsel from skilled clinicians and practitioners, but also more advanced medical care, like assessments for chronic conditions including dementia or Alzheimer’s. Telemedicine also makes it possible for seniors to identify the onset of critical conditions earlier as it removes barriers to care, like access to transportation and location.

How could expanded telemedicine reimbursement address elder care concerns and lower health costs?
 
Technology has the opportunity to mitigate the social determinants of health that providers say are most crucial to improving elder care: familial support (63 percent) and access to transportation (44 percent), according to our study. For example, digital health tools like e-visits or e-consults, wearables and sensors, mobile applications and even virtual reality can help seniors better manage their chronic care conditions, gain access to transportation, virtually visit with family and more. By better addressing social determinants of health through the use of technology, care outcomes could improve, bringing down overall health costs.

The use of telemedicine also preserves senior independence for longer, which diminishes the need for elders to be placed in nursing homes or assisted living facilities, resulting in an immediate drop in cost. Telemedicine also takes care that is traditionally provided in the costly hospital setting to the home, which reduces healthcare costs and ideally, improves outcomes across the board.

What can we expect as far as business for software companies that provide these kinds of platforms? What features do providers need?
 
With the expansion of telemedicine reimbursement—and the race to contain healthcare costs—we expect demand for these platforms to increase. Providers need platforms that enable the use of telemedicine in conjunction with remote monitoring of vitals and wearables. But it’s important to keep in mind that many elders are not familiar with new technologies and might find devices overwhelming, so educational and other support resources may be needed.

Because much of this technology requires R&D, there is enormous incentive for software developers to work towards credit from the IRS and state tax authorities to help finance the development of new telemedicine and other digital health technologies. Private equity firms and venture capitalists are actively looking at these companies because they provide innovation, which in turn contributes to lower healthcare costs. This is especially good news for the West Coast, which is at the epicenter of software development—whether it be Silicon Valley or Silicon Beach. Software companies in these areas are likely to see a boom in business as the need, resources and benefits of telemedicine engagements continue upward.

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