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How a Statewide Telehealth Scheduling and Referral System Can Help Make the CTN Self-Sustaining
Written by: Chuck Hershey

In their capacity as the technical network lead for the California Telehealth Network (CTN), The University of California at Davis Health System published a Request for Proposals (RFP) in November of 2008.  This extensive RFP solicited bids by vendors to supply the CTN with the network infrastructure and monitoring tools necessary to connect at least 319 (now 852) non-profit health care facilities into one common wide area network.  While funds were provided under the FCC award for the acquisition of circuits, equipment and monitoring tools to support the network, no funds were provided by the FCC award for cover other costs associated with the acquisition of technical support services, applications and equipment by the end-node hospitals, clinics and practices (institutions).  These costs, necessary expenditures that would have to be made to ensure that the CTN operated efficiently and in such as manner as to satisfy the goals and quarterly reporting requirements(4) mandated by the FCC award language, caused some concern amongst already financially challenged institutions.  By way of analogy, it was as if the FCC had funded a new intra-state highway system and a police force to monitor it, but was not providing funds to construct the on ramps, gas stations and repair facilities, to purchase the vehicles, or to publish the maps needed to make the system work.  It was at this point that I began to explore the possibility of finding a solution to this problem.

The purpose of this paper is to share my thoughts and experience as they relate to my two year effort to sell the concept that a self-sustaining, common, global telemedicine referral, tracking and scheduling system is a necessary, but not sufficient, condition for the successful utilization of the CTN.  I want to emphasize that that while I represented a particular vendor during portions of this period, it is the concept that is important, not the specific application that is acquired and implemented.  I also want to emphasize that I agree with those who have stated that an overhaul in the healthcare delivery system is not fundamentally a technical endeavor – that process and workflow redesign is paramount.  Accomplishing the goals outlined in the FCC’s quarterly reporting requirements for the CTN requires a successful marriage of technological innovations and redesigned workflows.

For thirty years, with a finance degree as a starting point, I have designed, installed and supported small and large local and wide area networks.  When I first learned that the FCC had approved California’s application for the funding of the CTN I was extremely excited by the prospect of becoming involved with the project.  I felt that the CTN would allow affiliated and non-affiliated medical facilities, both for-profit and non-profit, to improve their telemedicine and telehealth services in a manner that would be beneficial to the residents of California.  Scarce specialist time could now be captured and disseminated statewide in a manner that would be beneficial to rural, indigent, Medicare, Medi-Cal and privately insured patients.  Insurer costs could be reduced by improving early detection and treatment by reducing wait times and eliminating geographic barriers.  I saw overlap and synergy between CMSP hospitals, the California Prison system providers, the members of the telemedicine consortiums and the list of facilities that signed Letters of Agency (LOA’s).  I saw educational institutions listing CME and workforce development coursework on a commonly accessible system. Translation services could be requested and scheduled as needed.  Complicated, rare or baffling cases could be broadcast to the entire system for review and potential resolution – a form of system-wide grand rounds.   I chose to focus on finding something that could realistically enhance the CTN without focusing on the numerous political, market-protection, regulatory and monetary impediments that were so frequently the core component of any written commentary on the current state of telemedicine deployment.

I had had experience with methodologies for scheduling and tracking telemedicine sessions.  The predominant system of purchasing blocks of specialist hours and establishing static clinic times was cumbersome, inefficient and frustrating.  No-show patients left valuable specialist time wasted in front of blank screens, and specialist scarcity created by limited agreements between specialist sites and provider sites meant that wait times were measured in months instead of hours or days. What was needed was a dynamic system that permitted the efficient queuing and matching of patient needs at the time they presented themselves with a real-time, common, global specialist availability software application.  This could only be accomplished, in my opinion, if all specialists desiring to avail themselves via videoconferencing for referrals could somehow disseminate their clinic times to the entire CTN population in a dynamic and centralized manner.  Thus, when a patient’s need arose in a rural setting, the primary care facility could access and reserve time with an appropriate specialist immediately or at some reasonable future date.

Since the FCC had stated that any proposed system needed to be self-sustaining within three years, I next looked at incremental revenues and expenses associated with such a system.  The California HealthCare Foundation (CHCF) had produced a wonderful paper on telemedicine scheduling and tracking software, and the California Telemedicine and eHealth Center (CTEC) had produced similarly wonderful documents on reimbursement funds.  It turns out that the cost of a client license for a globally acquired system is approximately $200 per month per end node and would support up to five examining rooms and an unlimited number of users per site.  Thus the 852 sites that have currently signed LOA’s to become a part of the subsidized-circuit portion of the CTN would need to generate at least $170,000 per month in marginal revenue to cover the core cost of the scheduling and tracking system.  Since the $23 Originating Site Facility Fee (Q3014) was new money generated exclusively by the telemedicine session, nine sessions per month per site would be necessary to cover the cost of the system.  This equates to a 1.8% utilization rate for the telemedicine examining room (21 days per month, 8 hours per day, 3-20 minute sessions per hour).  Full utilization of all five rooms by sessions qualifying for reimbursement would result in $57,960 in new revenues each month per site, or $49,381,920 per month CTN-wide.  While it is obvious that nowhere near 100% utilization will ever be achieved, the finance side of me really liked these numbers, and felt that I had something that needed to be proposed (click here to view my funding cash flow scenario)(8).

Over time, four things became apparent:

  1. The ARRA HIE/HIT/EMR tsunami overwhelmed and washed away many of those that had been discussing the CTN and telemedicine expansion and improvement,
  2. No end-node institution wanted to independently be the first to acquire a license since, like a telephone, it is useless if there isn’t anyone else with a phone to call,
  3. No one was authorized to purchase software on behalf of the CTN and,
  4. Since no one was authorized to evaluate, create an RFP, purchase or install a centralized solution, no funding source could be found to cover the startup costs while the system got up to speed.

For the past 15 months I have pursued the marketing of this concept passionately, and have had numerous individuals well known and respected in the health care community in California review and concur with the substantial research that stands behind this brief document.  Having had first hand experience with network architectural changes brought on by both banking deregulation in the 80’s and telecommunication deregulation in the 90’s I can honestly say that they pale in comparison to the complexities associated with health care reform and the deployment of the CTN.  I have, at times, experienced varying degrees of frustration.

My enthusiasm, however, has been renewed by three recent events:

  1. HHS, under the guidance of Kim Belshé and Jonah Frohlich, has done a magnificent job facilitating the discussions which have lead to the creation of a statewide governance entity,
  2. The announcement that a new 501(c)(3) would be created to administer the CTN and,
  3. The creation and funding of CAL-REC and the potential impact it and other REC’s and LEC’s will have on the facilitation of dialogue and support for end-node institutions (if their role is defined to include support for process reengineering and the incorporation of telemedicine queuing into the everyday clinical workflow).

While the decision on which EMR to acquire must and should be a decision made by each and every hospital, clinic or provider, based on their needs and financial situation, it is my hope that a consensus can be reached that certain, limited CTN functions require a common, centralized system, that these systems need to be centrally acquired, deployed and administered, and that the telemedicine referral, scheduling and tracking function is one such system.

About the Author:
A 1981 graduate of the The Ohio State University with a degree in Finance, Mr. Hershey has spent the better portion of the past 30 years designing and deploying networking solutions in banking, university and governmental settings.    His 1997 network design for Shasta County allowed them to consolidate their infrastructure into a county-wide architecture with single point of presence (SPOP) circuits to the state data centers.  For the next ten years he assisted the 34 Integrated State Automated Welfare System (ISAWS) counties consolidate and migrate to the SPOP model - resulting in millions of dollars of savings to the state by eliminating costly, redundant circuits.  His interest in the CTN blossomed while briefly serving as the Deputy Director of Technical Services for the Northern Sierra Rural Telehealth Network.

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