Spending growth from 2012 to 2016 was almost entirely due to price increases, particularly for prescription drugs, emergency department visits, and inpatient surgical procedures.
Consumers used the same amount of healthcare or less in 2016 than in 2015, but paid more for it because of rising prices, and that pace is accelerating, according to a new report from the Health Care Cost Institute.
"It is time to have a national conversation on the role of price increases in the growth of healthcare spending," said Niall Brennan, president of HCCI.
"Despite the progress made in recent years on value-based care, the reality is that working Americans are using less care but paying more for it every year. Rising prices, especially for prescription drugs, surgery, and emergency department visits, have been primary drivers of faster growth in recent years."
The report covers the period 2012 through 2016 and includes national claims data from Aetna, Humana, Kaiser Permanente, and UnitedHealthcare.
Key findings:
Over the five years examined in the survey, prescription drug spending had cumulative growth of 27%, despite flat or decreasing generic drug pricing and a decline in the use of brand name prescription drugs. The increase in spending was driven by double-digit price increases from 2012-2016 for brand prescription drugs.
The overall number of emergency department visits rose only slightly over the five-year period, but the average price for an emergency department visit increased 31.5%.
The average price for surgical admissions increased by nearly $10,000, or 30%, over the five-year period, despite a 16% cumulative decline in use. The price for outpatient surgery rose more than 19% over the five-year period.
Total spending per person is now growing at faster rates than prior years, with 4.6% growth in 2016 compared to. 4.1% growth in 2015, which followed 2 years of sub-3% growth from 2012 to 2014.
Utilization of most healthcare services remained unchanged or declined, both year-over-year and over the 2012-2016 period.
Consumer out-of-pocket spending per person increased, but grew more slowly than total spending. This difference in growth led to a decline in out-of-pocket spending as a share of total spending.
"While consumers, especially those with employer-sponsored insurance, may not feel the direct impact of these charges via out of pocket payments, they ultimately pay through increased premiums and decreased benefits," Brennan said.
PhRMA has challenged the HCCI findings.
"The latest annual report from HCCI overlooks key data published on drug prices included in the years covered by the report. More recent data provides key insights into the spending and costs of prescription medicines," PhRMA said in an email to HealthLeaders Media.
In 2016, spending on retail medicines grew just 1.3%, as reported by CMS.
2016 spending rates published by a number of sources cite a decline in medicine cost growth, on average of 3%-5% for the year. (Express Scripts, CMS, CVS/Caremark, Quintiles)
"In addition, HCCI does not factor for discounts drug makers provide to payers," PhRMA said. "In 2015, more than $100 billion in savings for patients were negotiated with drug manufacturers. That number is increasing year on year. These discounts rebate more than one-third of the list price back to payers and others in the supply chain."
Allegations in a whistleblower lawsuit claimed that the San Diego-based health system improperly billed government-sponsored health plans for physical therapy services.
Scripps Health will pay $1.5 million to resolve False Claims Act allegations related to improper billing for physical therapy services, the Department of Justice announced.
The services were provided by a therapist who did not have billing privileges with TRICARE or Medicare, and who was not properly supervised by a physician, DOJ said.
"Federal healthcare programs require that services are rendered by authorized providers or under the appropriate supervision of an enrolled physician," Acting Assistant Attorney General for the Justice Department's Civil Division Chad A. Readler said in prepared remarks.
"These requirements help protect patients from unscrupulous or unqualified medical professionals," he said.
Scripps Health said in prepared remarks that it self-reported the infractions and settled with the government to avoid costly and uncertain litigation.
"Contrary to what was said in the Department of Justice news release, this was a civil investigation focused on the technical billing issues only; there were no allegations related to quality or medical necessity of care in this investigation. The technical billing issue had no financial benefit to Scripps (it did not increase reimbursement rates or reduce costs)," Scripps said.
Medicare and TRICARE limit billing privileges to enrolled providers. Services from unenrolled providers can be billed as "incident to" the services of an enrolled physician, but only if the physician provided direct supervision, DOJ said.
The settlement resolves False Claims Act allegations in a lawsuit filed by former Scripps employee Suzanne Forrest, who will receive $225,000 under the settlement.
"Unlawfully obtained payment from taxpayer-funded programs harms the entire healthcare system," said Adam L. Braverman, U.S. Attorney for the Southern District of California. "We will hold accountable all providers who defraud these programs."
"The Department of Justice and Scripps Health have reached a settlement agreement related to a technical error in the processing of some Medicare bills for physical therapy treatments. Scripps provided all the services for which it billed Medicare and ensured patients received high quality care. Scripps reached a settlement to avoid continuing legal costs and uncertainty.
Scripps issued the following statement in response:
"Scripps became aware of the situation on our own and reported to the Medicare contractor, the party responsible for the handling of Medicare claims, that we had found the billing anomaly and we asked them for guidance on how to address it. The federal attorneys on the case and the relator were unaware of Scripps' self-disclosure when they reached out to Scripps, and Scripps was not aware that the relator had filed a lawsuit against Scripps when Scripps made the self-disclosure. Therefore, Scripps diligently investigated the issue and attempted to resolve it through appropriate channels."
"It is important to note that there were and always are physicians on site during the provision of physical therapy services and available to assist with any patient needs that arose. There is no evidence of any patients requiring physician intervention. Further, all physical therapists were licensed and provided medically necessary, appropriate care."
In less than one decade the number of ER visits involving alcohol consumption increased 61.6%, from 3 million to 4.9 million, and the total cost increased 272%, from $4.1 billion to $15.3 billion.
The rate of alcohol-related visits to U.S. emergency departments increased by nearly 50% between 2006 and 2014, and the cost of providing care more than tripled, according to a new study from the National Institutes of Health.
"In just nine years, the number of people transported to the ED annually for medical emergencies caused or exacerbated by alcohol increased from about 3 million to 5 million," said NIAAA Director George F. Koob, director of NIH's National Institute on Alcohol Abuse and Alcoholism.
"These findings are indicative of the detrimental effects that acute and chronic alcohol misuse have on public health, and the significant burden they place on our healthcare system," Koob said.
Researchers gleaned data from the Nationwide Emergency Department Sample, involving 945 hospitals in 33 states. The results were published this month in the journal Alcoholism: Clinical and Experimental Research.
Among the key findings, between 2006 and 2014:
The number of ED visits involving alcohol consumption increased 61.6%, from 3 million to 4.9 million. The rate of all alcohol-related ED visits increased 47% between 2006 and 2014, which translates to an average annual increase of 210,000 alcohol-related ED visits.
The total cost increased 272% from $4.1 billion to $15.3 billion.
The number of acute alcohol-related ED visits increased 51.5% from 1.8 million to 2.7 million, and the rate increased 40% from 720.9 to 1,009.6 per 100,000 population.
The number chronic alcohol-related visits increased 76% from 1.3 million to 2.2 million, and the rate increased 58% from 502 to 793 per 100,000 population.
Men account for more alcohol-related ED visits than women, but the annual percentage change in rates of all alcohol-related ED visits was larger for women than for men (5.3% vs. 4%). This increase was driven primarily by a larger increase in the rate of chronic alcohol misuse-related visits for women than men (7% versus 4.5% annually).
"During the study period, the number of people in the United States who drank alcohol and the total amount of alcohol consumed each year remained about the same," said lead researcher Aaron White, a senior scientific advisor at NIAAA. "We suspect the increase in ED visits is related to an increase in the intensity of alcohol use among a subset of drinkers."
"Recent studies suggest that the drinking habits of females and males are becoming more similar in the United States," said White. "The larger increase in the rate of ED visits among females compared to males provides further evidence of narrowing gender gaps in alcohol use and related harms. This trend is concerning given that females appear to be more susceptible to some of the detrimental health effects of alcohol."
Hany Atallah, MD, chief of Emergency Medicine at Grady Health, was not involved in the NIH study but says the ER at Atlanta's safety net hospital deals with lots of intoxicated patients.
"In my mind it divides itself into two spectrums: No. 1 is the medical and No. 2 is the surgical," Atallah says. "No. 1, you’ve drank enough and fallen and hit your head and cut your face and broke a bone. We see that a good bit, and we do see it more in the older patient population. That is the surgical problem."
"The medical problems we see are people who have just been drinking long enough that they have managed to damage parts of their body. The volume has been increasing," he says.
"Obviously the surgical treatment is straightforward. You figure out if something is broken or bleeding and if it is, you need to figure out what you need to do about it," Atallah says. "For those who show up drunk, which is a fair bit, typically we are watching them until they are sober. Once they are sober and safe and if everything else is OK we discharge them."
"We do admit a fair number of chronic alcoholics for alcohol withdrawal. That is a problem as well. It takes up hospital resources and those people can get very sick," he says.
"On the flip side, for the folks who drink and sober up, if they are regretful, we have added substance abuse counselors in our emergency department," he says. "If you're 50 years old and you wind up in the emergency room because you drink too much, then you have a problem. So, we recognize our opportunity to intervene and do the general population some good by trying to get them the help they need."
Atallah says the rise in alcohol-related ER visits is challenge, but it’s been manageable.
"We work in the emergency department. We see 146,500 visits a year. We manage the unmanageable every day, simply because of the volume," he says. "Emergency departments across the country have seen increasing volumes over the past several years and decades. This patient population volume based on the study has also increased and has added to that stressed emergency department capacity for the country. So, it's certainly contributed. I don't think that those patients in particular have made emergency department care as challenging as it is today but it certainly has contributed."
One strategy at Grady has been to "cohort" drunk patients into specific areas of the ER and provide appropriate levels of resources.
"Someone who is waiting to sober up doesn't need four-to-one nursing. It can be eight- or 10-to-one," Atallah says. "We have high volumes of very sick patients coming in. Those patients are in rooms. We have an ambulance triage area, and as long as the person who is intoxicated isn’t unruly we can let them hang out there and sober up and then we see them. That doesn’t necessarily require intensive monitoring. With as crowded as emergency departments are now, you don’t want them taking up valuable resource and real estate. You try the best you can to find the right place to take care of them."
Physician burnout, medical marijuana, and interstate medical licensure also top the list of concerns for the nation’s state medical boards.
Opioid prescribing and telemedicine are the most important regulatory issues for state medical boards, according to an annual survey by the Federation of State Medical Boards.
"Our member boards play a central role in providing guidance to policymakers and healthcare professionals on how to navigate some of our nation's most pressing medical issues," said Humayun J. Chaudhry, DO, president and CEO of the FSMB.
"Anticipating these trends will help the FSMB provide boards with resources they need to address these challenges and continue their mission," Chaudhry said.
Each of the 51 medical boards was asked to choose five of the most important topics from a list of 16. The top five issues and the percentage of boards that chose them were:
Resources related to opioid prescribing (74%)
Telemedicine (74%)
Physician stress and burnout (44%)
Medical marijuana (42%)
Interstate Medical Licensure Compact (38%)
The FSMB has model guidelines and policies for four of the regulatory topics that boards deemed most important:
Interstate Medical Licensure Compact (IMLC):Model legislation (22 states are now members of the IMLC, with seven more states considering adopting legislation to join)
Physician stress and burnout: In 2016, the FSMB formed the Workgroup on Physician Wellness and Burnout to identify, manage and prevent physician burnout and reduce the stigma associated with seeking help for burnout. A report is expected in April 2018.
Surveys glean information not otherwise found in traditional mortality reviews, including the importance of advance care planning and the strain on clinicians whose patients die.
Surveys of care teams after unexpected patient deaths can provide learning opportunities for hospitals, and catharses for clinicians, a new study in the Joint Commission Journalof Quality and Patient Safety suggests.
"Oftentimes if there is an error, the care team is not going to write in their notes, 'Oh we committed this error!' A lot of times the medical record is not the best source of truth for something like this," says study lead author David Lucier, MD, a hospitalist and director of Quality and Patient Safety at Massachusetts General Hospital.
"What we do know is that when patients pass away unexpectedly there is this pit-of-the-stomach feeling for providers and we were trying to get at that with this project," he says. "It's that gut feeling that maybe something could have been done differently. Is there some truth to that, and if so, how much truth? That's why we did this project, to see if we could augment the existing process that we had in place."
Lucier says that essay opportunities provided to clinicians can often be the most illuminating parts of the survey.
"The idea is to prime them to think about improvements and provide them with a space to write whatever they thought. There was no guidance on what to write. They just wrote it," he says. "In doing so, we found we had a very rich data base of written comments. Some answers were very short. Some were very, very long."
The researchers created a taxonomy from the essays to understand what the clinicians were saying and how they were saying it.
"We were interested in the 'how' in particular. Were people writing blaming comments? Did they feel they needed to be defensive in a patient's death? Were they trying to explain something with emotion because that’s how they were feeling, using descriptive words," Lucier says. "You could say 'a large volume GI bleed,' or you could say ‘the patient had a tremendous amount of bleeding, and it’s shocking how much he bled.' They both describe the same situation, but the words used relay a different provider experience of that patient’s death."
Lucier says many mortality reviews start with the premise that every death might be a preventable death. While laudable, Lucier says that premise is not necessarily congruent with the care goal of the patients, which might be to pass away comfortably at home or in the hospital surrounded by loved ones.
"What we found in the free text comments were repetitive themes about patients' goals of care and whether they had been discussed, and if the care provider was congruent with the understanding of it," Lucier says. "That was the main finding: We are not doing as good a job as we can with understanding patients' goals of care when they are coming in. These are hard conversations to have, and this is at a patient's time of need, so it's a complex issue."
Lucier says the surveys also find that frontline clinicians are not particularly good at identifying preventable deaths.
"Providers overestimate the preventability of death by almost 10 fold," he says. "While something may have happened that didn’t go right, it didn't lead to the death being preventable. If it stopped, the patient likely would have died anyway."
That problem of accurate reporting is compounded by the harried pace of hospital work.
"This is a big problem in safety reporting in general. We rely on the frontline to tell us when something goes on," Lucier says. "The problem is that it's tough to report something when you have a million other tasks at hand, all these patients' demands that are far more important than submitting an adverse event report."
Still, the surveys exposed vulnerabilities in care coordination that would have otherwise gone unnoticed, Lucier says.
"For example, from this we were able to look at the massive GI bleeding pathway, which is a complex dance between multiple services, and look at the drip medications in the critical care units and rework those," he says. "These vulnerabilities were not brought up in any other system that we had within quality and safety to identify vulnerabilities and make improvements."
While the cathartic effect of the survey on clinicians was not examined in his study, Lucier believes that it could also provide an outlet.
"If you have a patient die expectantly, it weighs on you. It makes you question what you did and the care you provided. All of us have this moment where 'did we do something wrong?' Over time that continuous questioning can lead to burnout," he says.
"Providers compartmentalize any emotional distress they might have from an unexpected death. This project was the first step in trying to identify that and provide an outlet to dissipate that emotional distress."
The former Health and Human Services secretary, who was forced to resign last fall after a scandal-shortened eight-month tenure, is hailed for his 'profound understanding of the national healthcare landscape.'
Tom Price, MD, the scandal-plagued former secretary for the Department of Health and Human Services, has been named to the advisory board of Jackson Healthcare.
A spokesperson for the Atlanta-based healthcare staffing firm said that the company is privately held and would not detail Price’s compensation.
"Nobody has as profound an understanding of the national healthcare landscape as Dr. Price," Richard L. Jackson, chairman and CEO of Jackson Healthcare, said in a media release. "Tom has exhibited an unwavering commitment to preserving the patient-physician relationship. That mindset, along with his physician, business and policy experience, will make him an invaluable addition to our board."
Price, an orthopedic surgeon, and former Congressman from Georgia, was the first physician to serve as HHS secretary, a term that lasted from February to September, 2017. He was forced to resign in late September amid media reports that he’d racked up at least $400,000 in expenses for unauthorized chartered jet services.
Price’s short stint at HHS was marked by controversy from the onset. Senate Democrats during confirmation hearings last winter raised ethics concerns because Price, while a member of Congress, had bought shares of a medical device company days before introducing legislation that would have been beneficial to the company.
Price spent much of his tenure at HHS attempting to dismantle the Affordable Care Act, a top priority of President Donald Trump and Republican leaders in Congress.
"I am honored to join the advisory board at Jackson Healthcare," Price said. "Jackson Healthcare’s mission of working to improve patient care is wholly aligned with the work I have done for over four decades, and I look forward to helping them navigate the always changing healthcare environment."
The industry is riding sustained tailwinds that will push growth of 30% to more than 40% in coming years. Factors include a growing dearth of clinicians, an aging population, and technological innovations that will improve patient access and experience.
If Teladoc, Inc. is a bellwether for the telemedicine industry, the outlook is bright.
Jason Gorevic, CEO of the Purchase, NY-based telemedicine provider, called 2017 "a landmark year as we redefined the virtual care delivery landscape with our acquisition of Best Doctors."
"Through rapid integration, Teladoc has brought to market innovation that gives members a single point of access for a wide array of medical needs. We are seeing a tremendous reception from both clients and prospects to this unique, comprehensive solution," he said.
Preliminary numbers provided by Teladoc support Gorevic’s claims. According to unaudited 2017 financial results, the company saw:
Total revenues of $232 million, an 88% increase over 2016
Total membership of 23 million, a 31% increase over 2016
Total visits of 1.46 million, a 53% increase over 2016, and representing utilization of 7%, compared to 6% utilization in 2016.
Teledoc finished 2017 on an upswing, with unaudited fourth quarter results showing:
Total revenues of $76 million, a 103% increase over 2016
Total adjusted EBITDA of $2.5 million compared to a loss of $8 million in the fourth quarter 2016
Total visits of 460,000, a 48% increase over 2016, and representing utilization of 2%, compared to 1.8% utilization during the same period in 2016
"Building on our strong momentum in all segments of the Teladoc business, we head into 2018 extremely well positioned to deliver on our targets for all key operating and financial metrics," Gorevic said.
Robert Annas, senior managing director at SOLIC Capital, said much of Teladoc's strong growth can be attributed to the Best Doctors acquisition in July, 2017, which is expected to add about $100 million in revenue annually.
"If you assume the Best Doctors acquisition happened on Jan. 1, 2016, year-over-year growth is in the mid 20% range, which is more reasonable," Annas said. "I would anticipate they will continue to be acquisitive and, with a fuller platform offering, be able to accelerate growth at a faster pace in the next few years."
Annas said Teladoc is expanding its service lines beyond behavioral health, dermatology, and tobacco cessation. "Best Doctors’ typical patient profile is more acute, dealing with musculoskeletal conditions and cancer and typically second opinion type scenarios,” he says. "Close to 40% of Best Doctors' revenue is outside the U.S. so this will create a larger international footprint for Teladoc."
Industrywide, Annas believes telemedicine is riding strong tailwinds that will push growth of 30% to over 40% in coming, in large part due to a growing dearth of clinicians.
"Demand for primary care providers will continue to outstrip supply," Annas said, citing studies showing that 65 million Americans live in "primary care deserts."
"In addition, to help control costs, companies, healthcare systems and insurance companies are going to look to companies like Teladoc to have overall better visibility on their individual patient populations, particularly those with chronic diseases," he says. "This trend falls in line with the overall concept of value-based payments, where Medicare awards healthcare providers for overall healthier patient populations."
And there are simple demographic stressors coming into play, Annas says, including an aging population, a dearth of healthcare providers globally, the prevalence of chronic diseases such as diabetes, obesity and heart disease, technological innovations that allow for remote deployment of healthcare services, and the movement toward disease prevention.
Within the telemedicine space, Annas sees three areas for potentially faster growth, including: remote monitoring to keep people out of the hospital; primary care services for patients with no direct access to physicians; and inpatient telemedicine, as the internal medicine provider shortage accelerates.
The big challenges ahead for the telemedicine that could dampen growth include potentially inconsistent reimbursements for telemedicine services from payers, primarily Medicare and Medicaid, and the as yet unknown effects from the repeal of Net Neutrality.
In separate deals finalized this week, Penn Medicine acquired Princeton HealthCare, and Tenet Healthcare Corp. completed its sale of two hospitals to an affiliate of Paladin Healthcare.
Dallas-based Tenet Healthcare Corp. has completed the sale of two Philadelphia-area acute care hospitals and related operations to American Academic Health System, LLC, an affiliate of Paladin Healthcare.
Tenet and Paladin announced the deal in September, under which Tenet was paid $152.5 million in cash and a secured promissory note for $17.5 million. The deal was finalized this week, as Tenet announced plans to cut $250 million in costs and layoff as many as 2,000 employees.
Ownership and management of Hahnemann University Hospital and St. Christopher's Hospital for Children and their physician practices and affiliated operations transferred to AAHS on Thursday.
Also this week, Princeton HealthCare System became part of the University of Pennsylvania Health System, finalizing an acquisition process that began in 2015.
Financial terms were not disclosed.
The Plainsboro, NJ-based not-for-profit health system, located 40 miles north of Philadelphia, includes the flagship University Medical Center of Princeton, Princeton House Behavioral Health, Princeton HomeCare and the Princeton Medicine physician network.
As part of the transaction, PHCS and its affiliates are now Penn Medicine Princeton Health, and the medical center's new name is Penn Medicine Princeton Medical Center.
"PHCS has an impressive reputation for providing high-quality care to patients close to home, and innovating in many types of community-based health and wellness initiatives," Ralph W. Muller, CEO of the University of Pennsylvania Health System, said in a joint announcement.
"Now, we can offer a powerful partnership to patients throughout the region PHCS serves, continuing the services they already depend on, coupled with access to world-class care for complex conditions and innovative clinical trials available at Penn Medicine," Muller said.
The Philadelphia-based University of Pennsylvania Health System includes five hospitals, including the Hospital of the University of Pennsylvania and Penn Presbyterian Medical Center, as well as primary and specialty physician networks and outpatient facilities, and home and hospice services.
"This is a significant day in our history, and we look forward to being an even stronger organization, clinically and financially, as we continue to fulfill our almost century-old mission of serving this community," PHCS President and CEO Barry S. Rabner said.
"We could not ask for a better partner than Penn Medicine," he said. "Members of our community will continue to receive high-quality care right here, close to home. They also will benefit from easier access to the latest medical breakthroughs, clinical trials, cutting-edge technologies and specialized clinical expertise – both here and elsewhere in the Penn Medicine system."
Founded in 1919, PHCS serves more than 1.3 million people in central New Jersey. The health system employs 3,000 staff and more than 1,100 physicians.
PHCS announced in mid-2015 that it would begin evaluating partnerships. In July 2016 the health system signed a letter of intent with UPHS. The search process considered 17 potential partners, PHCS said.
Among patients who were transferred to other hospitals, the length-of-stay at the emergency room in the first hospital was shorter for patients who had telemedicine consults.
Emergency department patients at rural hospitals using telemedicine see a clinician six minutes sooner than patients in hospitals that have no such technology, a new study from University of Iowa shows.
And if that first clinician assessment is through a telemedicine encounter, as was the case 42% of the interactions examined in the study, the door-to-provider time is shortened by nearly 15 minutes, says study lead author Nicholas Mohr, MD, an emergency physician and associate professor at the Carver College of Medicine at the University of Iowa.
"If we are talking about 15 minutes for a patient in a rural hospital, that can be important for patients who have certain very serious diseases," says Mohr, who is also a researcher with the university’s Rural Telehealth Research Center.
"Especially in remote hospitals, that 15 minutes saved could change outcomes for patients with particular conditions that we would expect would be most sensitive to that, such as severe trauma, stroke, myocardial infarction," he says.
Mohr's study looked at data from 14 hospitals in Iowa, Kansas, Nebraska, North Dakota, and South Dakota that subscribe to telemedicine services from Avera eCARE Services, an emergency medicine telemedicine provider based in Sioux Falls, SD. The research matched 2,857 emergency department cases that used telemedicine services with non-telemedicine controls.
Among patients who were transferred to other hospitals, the length-of-stay at the emergency room in the first hospital was shorter for patients who had telemedicine consults.
"For patients who will need rapid transfer to a tertiary care facility, having a provider to start to effect that transfer probably makes as much difference as anything," Mohr says. "We’ve shown in earlier studies that among transferred patients when telemedicine is involved those patients who have major trauma, for instance, are transferred more quickly."
"That is probably a combination of being able to see patients more quickly and also because they can start the transfer. They can send a helicopter, for example, or they can get a receiving clinician to help with the transfer. All of those things to do that require someone seeing the patient can be started," he says.
Mohr says the link to subspecialist expert consultation provided through telemedicine comes as more rural hospitals staff their emergency departments with advanced practice providers, such as nurse practitioners and physician assistants.
"As we see that that is the case, one question that is raised is how do you provide supervision and backup to all of those providers?" Mohr says. "Telemedicine can be one really powerful way of providing that supervision."
The study showed that most patient encounters in the rural emergency department can be completed by local staff without an outside consultation, Mohr says.
"The consultation rate was about 3.5%, meaning that if 30 people walked into a rural emergency department, 29 were going to be treated without ever consulting the TM provider," Mohr says. "But, that 30th person is the one that the local clinician pushes the button and asks for help."
"Having that option available to them can be valuable," he says. "We've heard in some of our prior work that local clinicians value that, in terms of recruitment and retention. They appreciate having a telemedicine provider there, either to help with transfer or documentation, or to help with supervision of advanced practice providers."
Mohr says telemedicine finally appears to be catching on with rural providers. In North Dakota, for example, he says 80% of critical access hospitals use telemedicine services.
"In some regions where there are maybe extrinsic factors that make it challenging to staff emergency departments, there is a lot of value in having that tertiary care center expertise in those emergency departments," Mohr says. "It's becoming a minority of hospitals that don’t have telemedicine available."
"Barriers to telemedicine adoption for years were legislative and licensure barriers and broad band access, especially in rural areas," he says. "As broadband speeds are getting faster and rural communities are being connected to more broadband providers, that is making telemedicine available where previously it wasn’t, even when they wanted it."
Mohr says that telemedicine is not the silver bullet that will remove obstacles to healthcare access in rural America, but he sees it as part of the solution.
"And it will continue to be a bigger part of the solution as there are more telemedicine providers, and we figure out how telemedicine can best influence the care that patients receive, as broad band internet connectivity improves, and the quality of the connection at rural hospitals improves," he says. "All of those things will coalesce for telemedicine to continue to expand the scope of emergency care."
Meaningful use mandates for electronic health records under the HITECH Act have largely been met, or at least initiated, by most payers and providers, which means that software vendors will have a smaller customer base, and less room to grow.
The widespread adoption of electronic health records by payers and providers in recent years means fewer customers for software vendors, and that could lead to significant consolidation within the EHR sector, according to a report by Standard & Poor’s Global Ratings.
"The high degree of penetration, and the resultant decline in the new customer base, has spurred industry consolidation as leading participants seek new avenues for revenue growth, including enhanced features and capabilities to existing products," S&P analyst Sarah Kahn said.
Kahn cited a government report which showed that in 2015, 96% of hospitals (up from 72% in 2011) and 78% of physician offices (up from 34% in 2011) used certified EHRs, and that 82% of non-federal acute-care hospitals exchanged laboratory results, radiology reports, clinical summaries, or medication lists electronically.
With new customers in short supply, Kahn said she expects EHR vendors to "start feeling the pressure from more limited revenue opportunities and greater competition in the U.S. markets."
The report also predicts that:
Growth rates among the largest EHR providers (such as Epic Software Corp. and Cerner Corp.) will outpace industry growth rates, as healthcare providers continue to favor large EHR providers that can offer a broad range of services.
Consolidation in the healthcare IT industry will facilitate economies of scale and broaden capabilities, but that credit ratings will remain constrained by the niche nature of the industry as well as by low barriers to entry and high fragmentation.
Aggregation of information within a digital healthcare infrastructure will allow industry payers to compare outcomes of providers, products, and procedures, facilitating a greater focus on total cost and value.
With healthcare IT spending trending upward overseas, as countries with public payment systems focus on providing a base level of care and managing a growing population, some U.S. vendors will look abroad to expand their operations.
