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Telemedicine and Telehealth Funding

Funding News

edited by Robert Roberts

  1. New Study Finds Telehealth Can Reduce Costs for Chronic Disease Care 6/20/2008
  2. New Legislation Would Expand Medicare Reimbursement to Urban and Suburban Areas 6/20/2008
  3. New Economic Analysis of Email-Based Telemedicine Available 5/24/2008
  4. FCC Extends Subsidized Funding of Some Rural Health Initiatives 4/16/2008
  5. HRSA Seeks Development of Audiology Telemedicine Diagnostic Protocol 4/16/2008
  6. Distance Learning and Telemedicine Grants Application Deadline Approaches 3/22/2008
  7. Telehealth Community Urged to Take Grassroots Action on OAT Funding 3/22/2008
  8. Telemedicine in the News 3/1/2008
  9. State Telemedicine News 3/1/2008
  10. HHS Details Impact of Telehealth and Broadband Funding 3/1/2008

New Study Finds Telehealth Can Reduce Costs for Chronic Disease Care

Health plans can cut costs for businesses and employees by encouraging frequent phone or Web-video conversations between chronic-disease patients and doctors or nurses, University of Missouri research suggests. With chronic diseases generating 70 percent of U.S. health costs, they offer nearly $1.5 billion a year to be cut.

The telehealth interactions bring important symptoms to light earlier, "triggering early intervention from providers and reducing the need for patient hospitalization," said Bonnie Wakefield, a nursing school professor who studied patients who had been hospitalized with heart failure. Those with phone or video follow-ups "significantly delayed hospital readmission rates" compared to those without.

"People who suffer from chronic illnesses usually wait three to six months between office appointments," Wakefield said. Nurses who check in regularly with patients "provide a sense of security. Patients discuss concerns on a frequent basis, and nurses give advice and detect problems that the patient might not notice."

The result, she said, is fewer and shorter hospital stays, "lower health care costs" and patients who better "manage their diseases and ultimately feel better."

The report, "Home Telehealth for Heart Failure," will be published in the Journal of Telemedicine and e-Health.

(Source: Dayton Daily News, June 9, 2008)

New Legislation Would Expand Medicare Reimbursement to Urban and Suburban Areas

Congressmen Mike Thompson (D-CA) and Kenny Hulshof (R-MO) introduced legislation that would increase the number of health facilities that offer telehealth services to Medicare recipients.

Telehealth, the delivery of health services via telecommunications, is a proven method for doctors and patients to effectively communicate from separate locations. This technology is an important resource for transmitting medical advice, information and imaging, but Medicare reimbursement for telehealth services is currently limited to rural areas and specific types of health facilities.

The Thompson-Hulshof legislation would expand Medicare reimbursement to urban and suburban areas and include more facilities, like skilled nursing facilities and home health services. It will also allow doctors to monitor patients remotely.

"People in rural Congressional Districts like ours often have to travel long distances to see a specialty physician," said Thompson. "We know that telehealth technologies are an effective way to bring high-quality, affordable healthcare to Americans, no matter where they live. This legislation will make sure Medicare recipients can access telemedicine technology in more cities and towns and in more health facilities. As healthcare becomes more expensive, telehealth technology is a great way to help people get the care they need."

"Telehealth has the potential to make the best treatments and medical professionals available to any American," said Hulshof. "This legislation has broad support from the medical community, as we all share the same goal: to take full advantage of medical and technological advances to save lives and keep people healthy. Telehealth also has great potential to save billions of taxpayer dollars, so this bill is truly a win-win."

The legislation also provides $30 million in grant funding to help health facilities pay for the telehealth equipment and to expand telehealth support services.

Telehealth has shown it provides better management of chronic diseases, reduces emergency room admissions and lowers healthcare costs. Telehealth services can also play an important role in addressing the epidemic of physician shortages in rural America by bringing physician specialty services to remote communities. In addition, faster diagnoses enabled by telehealth allow patients to get care more quickly.

(Source: Redwood Times, June 11, 2008)

New Economic Analysis of Email-Based Telemedicine Available

Email-based telemedicine has been reported to be an efficient method of delivering online health services to patients at a distance and is often described as a low-cost form of telemedicine. A new study by researchers at the Center for Online Health at the University of Queensland, Australia, finds that the service may be low-cost if the healthcare organization utilizes their existing email infrastructure to provide their telemedicine service. When the workload exceeded 5216 email consultations per annum, there were savings made when a purpose-written email application was used.

Many healthcare organizations use commercial-off-the-shelf (COTS) email applications. COTS email applications are designed for peer-to-peer communication; hence, in situations where multiple clinicians need to be involved, COTS applications may be deficient in delivering telemedicine. Larger services often rely on different staff disciplines to run their service and telemedicine tools for supervisors, clinicians and administrative staff are not available in COTS applications. Hence, some organizations may choose to develop a purpose-written email application to support telemedicine.

The researchers conducted a cost-minimization analysis of two different service models for establishing and operating an email service. The first service model used a COTS email application and the second used a purpose-written telemedicine application.

The actual costs used in the analysis were from two organizations that originally ran their counseling service with a COTS email application and later implemented a purpose-written application. The purpose-written application automated a number of the tasks associated with running an email-based service. The researchers calculated a threshold at which the higher initial costs for software development were offset by efficiency gains from automation.

They also performed a sensitivity analysis to determine the effect of individual costs on the threshold.

The cost of providing an email service at 1000 consultations per annum was AU$19,930 using a COTS email application and AU$31,925 using a purpose-written application. At 10,000 consultations per annum the cost of providing the service using COTS email software was AU$293,341 compared to AU$272,749 for the purpose-written application.

The threshold was calculated at a workload of 5216 consultations per annum. When more than 5216 email consultations per annum are undertaken, the purpose-written application was cheaper than the COTS service model.

The full analysis was published by the open access journal BioMed Central and the full report is available for free download [pdf].

(Source: BioMed Central, May 22, 2008)

FCC Extends Subsidized Funding of Some Rural Health Initiatives

The Federal Communications Commission has extended for three years the eligibility of certain rural health care provider organizations to receive subsidized funding of their telehealth/telemedicine initiatives under the federal telecommunications universal service program. The FCC in March 2005 changed its definition of "rural" health care facilities and temporarily grandfathered some organizations that technically no longer qualified for the subsidies. The FCC has extended that grandfather period to 2011, according to a final rule published April 10 in the Federal Register.

Acting under a request from the American Telemedicine Association, the FCC noted "in its petition, ATA identifies multiple health care facilities that participate in telehealth communications networks in Nebraska and Montana that would be adversely affected by the loss in universal service rural health care funding if the new definition of rural were applied to their rural health care funding applications," the FCC noted in the rule. "This, in turn, would serve only to endanger the continued availability of telemedicine and telehealth services that these health care facilities provide."

Consequently, the FCC believes more time is needed to evaluate the effect of the new definition before any providers lose eligibility. Further, the FCC is in the midst of a major, heavily funded telehealth pilot program with 69 rural health organizations. The program is designed to help facilitate creation of a nationwide broadband telehealth network linking rural and urban providers.

(Source: Health Data Management, April 10, 2008)

HRSA Seeks Development of Audiology Telemedicine Diagnostic Protocol

HRSA has issued a Sources Sought/Market Survey to locate firms with the capability to develop a model infant audiology diagnostic protocol using telemedicine. This will help professionals provide diagnostic services in rural areas. Audiology as a profession has been slow to adopt telemedicine, but it is now becoming necessary and more feasible to use telemedicine since inexpensive interactive video systems are now available.

Preliminary research suggests that telemedicine models might prove to be effective for audiologists to use to deliver hearing services to locations where no services now exist. This is vital because diagnostic audiology needs to occur between the ages of one to three months after a baby fails to pass a follow-up screening. However, only half of the infants referred are generally evaluated due to the shortage of pediatric audiologists and equipment. Data shows that an infant with a significant hearing impairment who receives intervention by six months of age will perform significantly better in language development than the infant who is identified after six months of age.

The goal is to place diagnostic equipment in a spoke site of an existing telemedicine network. Audiologists at the hub site would then observe the correct use of the equipment, interpret the results, and interact with the families.

The methodology, once demonstrated could be spread through the National Center for Hearing Assessment and Management. NCHAM has a regional network of pediatric audiologists operating throughout the U.S.

This Sources Sought notice is for information and planning purposes only and is not a solicitation announcement for proposals. For more information please see the Sources Sought announcement posted on www.fbo.gov on April 11, 2008.

(Source: Federal Telemedicine Update, April 15, 2008)

Distance Learning and Telemedicine Grants Application Deadline Approaches

The deadline for applying for a 2008 grant for the USDA Distance Learning and Telemedicine Program (DLT) is April 14, 2008. The DLT Grant Program was authorized by the 1990 Farm Bill to provide grants to rural schools and health care providers. The DLT Grant Program is specifically designed to meet the educational and health care needs of rural America through the use of advanced telecommunications technologies.

Paper copies of grant application must be postmarked and mailed, shipped or sent overnight no later than April 14, 2008 to be eligible for FY 2008 grant funding. Late or incomplete applications will not be eligible for FY 2008 grant funding. Electronic copies must be received by April 14, 2008 to be eligible for FY 2008 grant funding.

More information and the FY 2008 DLT application materials may be obtained from and from the DLT website or by contacting the DLT Program at (202) 720-0413.

(Source: USDA Press Release, March 20, 2008)

Telehealth Community Urged to Take Grassroots Action on OAT Funding

Congress is currently in the process of drafting appropriations legislation to provide federal spending for fiscal year (FY) 2009, which will begin on October 1st of this year. Last year, the telehealth community galvanized a strong grassroots advocacy campaign in support of increasing funding for the Office for the Advancement of Telehealth (OAT). Hundreds of individuals and institutions contacted Congress urging that OAT funding be increased. These grassroots efforts resulted in the Senate voting to approve an amendment boosting OAT funding from $6.8 million to $13.8 million. While this increase was unfortunately not retained in compromise negotiations with the House of Representatives, the Senate vote was proof that Congress will act to support telehealth when they hear from constituents in their states and districts.

Members of the telehealth community are urged to reach out to Congress and urge that telehealth receive the support it deserves. A $13.8 million budget for OAT will significantly advance telehealth in the United States.

If you are willing to have your name added to the list of those supporting an increase in telehealth funding, please send an email to info@telehealthleadership.org including your name, title, organization, and address. This information will be used to add your name to the letter. Please also contact your two senators and urge them to add their names to a joint letter being circulated by Sen. Debbie Stabenow of Michigan and Sen. John Thune of South Dakota urging that telehealth funding in the FY 2009 Labor-HHS bill be raised to $13.8 million.

With the telehealth communities grassroots efforts, funding for this critical telehealth agency can be increased.

(Source: Bob Waters, Partner and Chair, Telehealth, E-Health Law & Government Relations Groups Drinker, Biddle & Reath, March 21, 2008)

Telemedicine in the News


The Motley Fool, a news site that focuses on investing and finances, recently took a brief look at several telemedicine companies, including MedAire, Nighthawk Radiology, and Medtronic. The article, entitled Telemedicine, Up Close and Personal, also describes the use of telemedicine on a transatlantic flight.

An article published on Stateline.org, entitled States Get Help Expanded Telemedicine, examines the $471 million in FCC grants for telemedicine networks given out earlier this year.

An article in Future Healthcare Magazine, entitled Changing the Face of Healthcare with Telehealth, profiles the Association of Telehealth Service Providers.

State Telemedicine News


An Oregon bill that would allow mental health patients in 18 rural counties to receive treatment via teleconferencing has been approved by a Oregon Senate committee, but must clear the budget-writing Ways and Means Committee. The "telemedical access bill" would link patients with licensed mental health specialists via a video link-up from a secure facility.

Local doctors could in turn confer with Oregon Health and Sciences University (OHSU) psychiatrists in Portland for treatment options. OHSU operates a telehealth program that has served, among others, victims of Hurricane Katrina.

The chief sponsor is Sen. Jason Atkinson, R-Central Point, who was elated when the Senate Health Policy Committee sent the measure, SB1100, out Monday evening.

"They (OHSU) found that it's worked fantastically well when the privacy was there, and the physician was in a clinical environment," Atkinson said. "I've got to put that same option in the hands of local providers in outlying areas of Oregon."

He said his bill could provide world-class clinical medical care to rural people.

As originally introduced, the bill included all health services, with an estimated price tag pegged at $900,000 by the Legislative Fiscal Office. As a result, Atkinson scaled it back.

(Source: Medford Mail Tribune, February 13, 2008)



Blue Shield of California Foundation (BSCF) recently announced the award of $13.1 million in grants to nonprofit organizations and programs to improve the quality of patient care through health technology.

The telemedicine related grants include $350,000 to the California Health Foundation and Trust to expand its telemedicine program by increasing the number of telemedicine providers and offering technical assistance to those in the field. Telemedicine is vital in rural, underserved areas.

(Source: BSCF Press Release, February 26, 2008)



The New England Telehealth Consortium has won a $24.7 million grant – the largest single grant awarded – as part of a national Federal Communications Commission program aimed at beefing up rural telecom health efforts. The telehealth consortium consists of 31 members, representing 555 health-care sites in Maine, New Hampshire and Vermont.

The New England consortium award will be used to build an information health-care network throughout New Hampshire, Maine and Vermont. All told, the FCC has dedicated $417 million over three years for rural health efforts at 69 regional or statewide sites across the country.

The New England award will give all qualified rural and urban nonprofit health-care providers in the consortium an 85 percent cost reimbursement for consortium-covered project costs. Projects may include network design, services and equipment to build a broadband telehealth network in northern New England.

The funding will be used to connect providers with high-speed Internet service to allow for such things as faster uploading of patients’ records and better access to health care resources across the state and the nation.

“The goal of the New Hampshire Telehealth Program is to maximize the use of cost-effective telehealth technologies in the Granite State,” said Dr. Louis Kazal, director of the telehealth program. “The FCC award is a major step toward fulfilling that mission.”

According to Jim Rogers, CEO of ProInfoNet and founder of the consortium, the grant is “a huge step forward toward advanced health-care technology in rural New England.”

He said the consortium “will be the least expensive way to bring telemedicine services to Northern New England, since we now have both funding and buying power due to our large numbers and our ability to coordinate services through the New England Telehealth Consortium.”

He said initial sites are expected to be up and running by the summer.

(Source: New Hampshire Business Review, February 15, 2008)



The University of Virginia's telemedicine program is growing. The latest addition allows physicians to examine patients remotely at a Grayson County clinic The University of Virginia started a telemedicine service in 1996 at Lee County Regional Hospital and is now connected to 60 sites. Most of them are in southwest Virginia, which has fewer medical services than the rest of the state.

Officials say physicians have used telemedicine to examine more than 11,300 patients so far. Setting up a telemedicine site can cost up to $25,000 but the patient's bill for an examination is the same as if it were face to face. Special funds are available to pay for patients without insurance.

(Source: Associated Press, February 24, 2008)



Without ever leaving the nursery, babies born at Adena Regional Medical Center in Chillicothe, Ohio, are receiving clinical assessments from specialists an hour away at Columbus' Nationwide Children's Hospital. High-definition videoconferencing capabilities are making the assessments possible via the Ohio Supercomputer Center.

The project enables specialists in Columbus to view distressed newborns with exceptional clarity, examine detailed X-rays, view lab results and consult with attending physicians in Chillicothe in real time.

"Telemedicine dramatically increases the care of our youngest patients," said Dr. John Fortney, medical director for Adena Health System. "If we're looking for help with a diagnosis, someone from Children's -- whether it's a neonatologist or a sub-specialist, such as a pediatric cardiologist -- will see the patient and speak to the attending physician in real time.

"Currently, information is relayed by telephone, which means it's subject to interpretation," Dr. Fortney explained. "With high-definition videoconferencing, specialists can make a more thorough evaluation."

Adena Regional Medical Center was selected for the pilot because the hospital sends more pediatric patients to Nationwide Children's than any other outside of the Columbus metropolitan area. In the center's first year of operation with telemedicine, physicians were able to make quicker and more accurate clinical assessments via videoconferencing, especially regarding the need to transfer these critical care newborns.

"If a baby needs to be moved to our facility, doctors have seen the child, reviewed their diagnostic images and can prepare for the infant's care as soon as he or she arrives," said Stephen Welty, MD, chief of neonatology, Nationwide Childrens Hospital. "Just as importantly, we also use this as a tool to determine if a baby doesn't need to be transferred. Then, the child can stay with family and avoid unnecessary stress."

Recently, the Federal Communications Commission's Rural Health Care Pilot Program awarded $417 million to 69 projects around the nation to "significantly increase access to acute, primary and preventative health care in rural America." Three of those projects serve Ohioans by providing high-speed connections to health care facilities in nearly half of Ohio's 88 counties.

Those three regional telehealth networks will connect to Broadband Ohio's backbone to transport data traffic between regions in Ohio, as well as to use OSCnet to access Internet2, the primary national research and education network in the country. This fulfills a key requirement of the grant -- that the health care traffic be able to flow across the country from Ohio.

"Just as OSCnet provides the higher education community with a backbone that allows it to share critical education material around the state of Ohio, it will provide a network infrastructure to help make the Broadband Ohio initiative a reality for state-supported hospitals to access advanced telemedicine applications," said Stan Ahalt, executive director of the Ohio Supercomputer Center.

(Source: ADVANCE for Health Information Executives, March 1, 2008)

HHS Details Impact of Telehealth and Broadband Funding

The U.S. Department of Health and Human Services (HHS) recently released a fact sheet on their new broadband initiative. In November 2007, HHS Secretary Mike Leavitt and Federal Communications Commission (FCC) Chairman Kevin J. Martin announced a coordinated effort to deploy broadband access to rural and underserved communities with a particular focus on reaching health care providers. The FCC has awarded over $417 million for the construction of 69 statewide or regional broadband telehealth networks in 42 states and three U.S. territories. This Rural Health Care Pilot Program will support the connection of more than 6,000 public and non-profit health care providers nationwide to telehealth networks to improve patient care.

HHS programs and priorities benefiting from broadband / health IT include:

Indian Health Service (IHS)

Health care is being improved in all 12 areas of the Indian Health Service (IHS). Leading clinical telehealth applications include: teleradiology, telecardiology, telebehavioral health, teledermatology, and teleophthalmology.

The IHS-JVN (Joslin Vision Network) Teleophthalmology Program demonstrates how broadband can be used to deliver innovative services. Broadband also enables critical capacity for health IT systems that support daily health service delivery across the Indian health system through the IHS Resource and Patient Management System, the IHS Electronic Health Record, the VA VistA Imaging program, and the Alaska Federal Health Care Access Network.

The Health Research and Services Administration (HRSA)

HRSA works to increase and improve the use of health IT to meet the needs of underserved people, including those who are uninsured, isolated or medically vulnerable. Over the past 10 years, HRSA has invested more than $100 million in health IT improvements in Community Health Centers to help improve patient care as well as the centers' financial and business operations.

In Fiscal Year 2007, HRSA awarded 63 new grants, valued at more than $56 million, to advance health IT and telemedicine in health centers and Critical Access Hospitals in 35 states and the District of Columbia. These funds will support EHRs in more than 170 health centers representing over 900 sites and serving more than two million patients. The grants will also support the establishment of 16 regional health information exchange pilots that link primary, post-acute, acute, and tertiary care providers to improve coordination of care in these rural communities.

In addition, in FY 2007, HRSA provided over $6.8 million dollars for specific grants and contracts to advance the use of telehealth services around the nation. The Agency for Healthcare Research and Quality (AHRQ)

AHRQ, along with HRSA, launched a health IT Community Web portal for safety-net providers. The portal provides a virtual meeting place for users who share documents and exchange tools and resources on designing, implementing, and using health IT. To date, about 2,000 health centers, primary care associations, and maternal and child health grantees are using the site.

AHRQ's mission is to improve the quality, safety, efficiency and effectiveness of health care for all Americans. Since 2004, AHRQ has funded over 175 projects and demonstrations in the form of grants, contracts and cooperative agreements to advance health IT and telemedicine. These projects focus on the impact of health IT and telemedicine on the quality, safety, effectiveness and efficiency of health care and best practices that can improve quality of care. Funding for these projects totals $216 million with projects in over 40 states and territories.

Outcomes from AHRQ-funded projects indicate improvements in patients' health status and experiences with the health care system.

A project in Minnesota demonstrated that remote pharmacy services provided to rural hospitals during irregular hours can more effectively detect and prevent dangerous medication errors than traditional methods whereby pharmacists manually review "night and weekend" orders first thing in the morning before turning to day shift activities.

A project in New York demonstrated that remote pediatric care can treat common childhood illnesses from schools and child care centers. This helped parents avoid missing work, and reduced unnecessary trips to the emergency room.

A project in New Mexico demonstrated that telemedicine can effectively support rural primary-care clinicians in caring for patients with chronic, common, and complex diseases by delivering case-based information and support.

A project in Oklahoma has helped patients in rural parts of the state receive better quality of care -- including treatment for previously undetected diabetes and faster healing of wounds - when home health care workers were connected remotely with specialists, including certified wound care nurses and endocrinologists. A combination of images from digital cameras, video phone encounters, and access to electronic health records was used to improve care for home-bound and nursing home patients with wounds that are difficult to diagnose and treat.

AHRQ's telemedicine projects depend on quick and efficient access to critical health information for clinicians. This access to images, EHRs, and decision support is best facilitated by broadband connection to hospitals, physician offices, and public health departments. This access can also reduce health care disparities by providing high-quality and safe health care services for patients who cannot always travel the great distances sometimes required to receive appropriate care.

The entire HHS Broadband Fact Sheet is available online on the HHS website.

(Source: HHS, February 21, 2008)

About the author: is the Research Associate for the TIE, specializing in the Programs and Legal databases.


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