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The size of the U.S. market for telehealth technology and services is expected to explode during the next five years—from $240 million in revenues last year to nearly $2 billion in 2018.

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Published On Sep 22, 2014


(Out of) Office Visit

Telehealth technology takes primary and specialty care to distant patients. But will nagging issues slow its rapid growth?

A NURSE IS STARTLED BY BRYAN DARLING'S FACE. This is not surprising, as the neonatalist is smiling from a screen mounted on a five-foot, six-inch robot. He greets her on his way to examine a newborn. At the bedside, the robot allows him to lean in and observe the child’s chest compressions and also to listen to his heart and lungs. He orders blood work and a chest X-ray and discusses how to provide extra oxygen for the infant, who is having trouble breathing. Then Darling goes to the mother’s room to bring her up to date. 

Darling is at North Mississippi Medical Center Women’s Hospital in Tupelo, while the mother and child are being treated at Baptist Memorial Hospital-Union County in New Albany, Miss., some 30 miles away. For this feat, Darling uses his laptop to activate the RP-7 robot that’s plugged into the wall at Baptist Memorial. A video screen atop the robot shows Darling’s face, and audio gear and two high-definition cameras let him hear and see what’s in front of his mechanical stand-in. If a child needs more specialized care than he can get at Baptist Memorial, which has no neonatologist on staff, he’ll be brought to Tupelo. But Darling doesn’t have to go to New Albany to help make that decision. And if the child does have to go to the larger hospital, Darling can use a webcam there to show the parents how their baby has settled in. 

This is telehealth—aka telemedicine—at its best. “Telehealth uses the power of technology to expand, enhance and support the delivery of quality health care,” says Mario Gutierrez, executive director of the Center for Connected Health in Sacramento. Across the country, hospitals and clinics are beginning to integrate telehealth into their operations, and it’s being used by generalist physicians, specialists, home health agencies and patients. The American Telemedicine Association (ATA) in Washington, D.C., estimates that more than 10 million Americans now use telehealth services, more than double the number just three years ago. Other surveys show that almost half of U.S. hospitals and about one in five physician offices employ some form of telehealth. Darling’s RP-7 robot, developed by InTouch Health, a Santa Barbara, Calif., medical robotics company, is just one example of what’s possible. 

Until earlier this year, when he wanted to examine a child at Baptist Memorial, Darling had to use a videoconferencing workstation mounted on a cart pushed around by someone at the other end. “It got to be really frustrating because the equipment wouldn’t work right or the connection just dropped and there was no tech person on site,” Darling says. “Sometimes it was just easier to bring the baby here.” But the RP-7 robot is always ready to go, and robots with similar functions now bring distant expertise—dubbed telepresence—to emergency rooms, intensive and cardiac care units, and even psychiatric facilities.  

The size of the U.S. market for telehealth technology and services is expected to explode during the next five years—from $240 million in revenues last year to nearly $2 billion in 2018, according to one recent study. And that’s despite disputes about provider licensing—who’s responsible for a doctor in Indiana who treats someone in Illinois or Michigan?—and reimbursement, and the expense of setting up high-tech systems. With a looming shortage of physicians as the population ages, telehealth could help. But critics have many questions and worry about the lack of hands-on care in virtual encounters. 

IN 1967, KENNETH BIRD, a pulmonologist at Massachusetts General Hospital, oversaw the installation of what may have been the first modern example of telemedicine, an interactive television system that let doctors at the hospital examine ailing travelers at a medical station at Boston’s Logan Airport, three miles away. Meanwhile, the National Aeronautics and Space Administration was venturing much farther afield, using devices embedded in space suits to monitor the physical and mental status of astronauts during moon walks. But it wasn’t until the 1990s, when the Information Age really took hold, that experiments in telehealth became more financially and technologically sustainable. More recently, the explosion in wireless technology has provided another great leap forward.  

Much of telehealth today involves specialists bringing their virtual expertise to distant doctors and patients who would otherwise have to do without. Teleradiology, for example, is now used in about a sixth of all hospitals, according to the ATA. While X-ray machines are ubiquitous and even small-town hospitals may have CT and MRI scanners, many don’t have radiologists on hand around the clock to interpret patient images. But it’s easy to send a digitized scan to a physician at a teaching hospital, say, and then have the doctors at both facilities consult on diagnosis and treatment. This also turns out to be a convenient way to cut costs, and hospitals of all sizes now outsource some of their radiology work rather than funding full-time in-house staffs. 

Other specialties and departments are less likely to be connected to remote facilities, with just a tenth of hospitals using videoconferencing for real-time cardiology consultations or patient monitoring, and about one in 13 taking advantage of off-site physicians for emergency care, according to the ATA. But “tele-ICUs” are catching on, with some 13% of intensive care beds now linked to off-site intensive care specialists. 

The aging of the population means growing demand for ICU services, and many hospitals have struggled to keep up. Until recently, for example, High Point Regional Health, a 350-bed nonprofit in High Point, N.C., was spending $2 million annually to provide 24/7 ICU coverage. “We were paying a tremendous amount of money for temporary physicians from out of town, and our outcomes were abysmal,” says Greg Taylor, High Point’s chief operating officer. So in 2009, High Point partnered with an outside firm, Advanced ICU Care, and now intensivists at Advanced ICU’s St. Louis “command center” monitor patients at High Point using an electronic dashboard of eight monitors. The specialists in Missouri can also interact with patients, family members and High Point staff members, communicating through a wall-mounted television in each room. Taylor estimates that the hospital has saved some $4 million to date, with a 20% drop in the ICU’s mortality rate and improvement in virtually every quality metric tracked in critical care. Yet while some research has found similar improvements, a 2013 review was more critical, noting in particular the high cost—$70,000 to $87,000 per ICU bed—of implementing a tele-ICU system.  

“Telestroke” programs, pioneered by MGH almost two decades ago, are also growing, helping to address a widespread shortage of neurologists and the absolute necessity to treat stroke victims within a few hours of when symptoms appear. Those who happen to have a stroke near an advanced stroke center have always had a much better chance of recovery than patients in outlying areas. But now, about 60 hospitals participate in telehealth programs, according to a recent survey, with neurologists at stroke centers talking directly to patients about their symptoms, evaluating motor skills, viewing CT scans or other images, and then making a diagnosis and prescribing treatment. MGH and Boston’s Brigham and Women’s Hospital, both part of Partners HealthCare in Massachusetts, participate in the Partners TeleStroke Network, which connects their specialists to 31 community hospitals in New England. 

THERE ARE PLENTY OF OTHER “tele” experiments going on, including telepediatrics, teledermatology, teleneurology, telepsychiatry, teleophthalmology, telepathology, telepulmonology and telenursing. Joseph Kvedar, director of the Center for Connected Health at Partners, expects the use of telemedicine to double in the next five years. “The market is getting very hot,” he says.

Most of these technologies support the original notion of telemedicine—to use technology to bring high-quality care to people off the beaten track. But that takes money, and some telehealth programs have had to rely heavily on federal, state and private grants to buy the hardware, software and network system capabilities needed to extend care to remote patients. The Federal Communications Commission’s Rural Health Care Pilot Program, for example, was launched in 2007 with $417 million to build and expand broadband Internet networks for health care. Mill Pond Health Center on Swan’s Island, six miles off the coast of Maine, is among 500 facilities throughout New England that received grants through the program in recent years. Using an Internet connection and a cart-mounted high-definition television monitor, island residents can have face-to-face visits with physicians and counselors at Mount Desert Island Hospital in Bar Harbor, about 25 miles away.  

Donna Wiegle, a medical technologist and the health center’s only employee, prepares patients for each session. She takes their vital signs, and helps position them on an exam chair in front of the monitor so that physicians can examine them remotely. A digital stethoscope can transmit heart and lung sounds. “We try to make the process resemble an office visit as much as possible,” says Wiegle, who estimates that there are about 60 telemedicine visits a year for the island’s 350 full-time residents. Those who prefer to be seen in person have to wait for office hours when a physician from the mainland comes to the center twice monthly.  

Providing primary care at a distance could also make sense in places where access isn’t much of an issue. For the past two years, the patients of six primary care and specialty practices affiliated with MGH have been able to opt for such alternatives to traditional office visits, and about one-fifth of the 8,000 eligible patients have taken part so far, according to Ronald Dixon, a primary care physician at MGH-Beacon Hill Practice. MGH is expanding virtual visits to include neurology patients, who download software to their computers or tablets that enables them to have a secure face-to-face consultation with a specialist. For retiree Ann Marie Maguire, who lives on Swan’s Island and suffers from Fabry disease, a genetic disorder that requires her to see MGH neurologist Katherine Sims at least twice a year, this pilot program is “great news,” she says, because it lets her stay home instead of making a two-day drive to Boston that includes a ferry ride. “Patients seem enthusiastic about the convenience,” says Sims, but she emphasizes that telehealth is no substitute for in-person appointments for patients who are experiencing new neurological symptoms. “I can ask about those symptoms in the e-visit, but there is no substitute for a direct exam,” she says. 

Telehealth encounters might also help patients avoid traffic, anxiety or wasted time, but what their impact will be on overall quality of care remains unknown. These are early days, says Lee Schwamm, also a neurologist and director of the TeleStroke and Acute Stroke Services at MGH, who now provides about a third of his follow-up patient care through virtual or e-visits. “It’s a very different way of interacting with patients,” he says, noting that patients in the comfort of their own homes may be more likely to open up about their emotional struggles, for example. On the other hand, those who come to the office interact with medical assistants or nurses, who can make sure medical information is updated or that blood is drawn. Says Schwamm, “All of this has to be reassembled in a way that provides effective care.”  

AND COST-EFFECTIVE CARE, Schwamm might have added. Money is always an issue in weighing the viability of new care models, and this one brings a mix of high initial costs for the technology and the potential to limit expenses in the long run. For example, provisions in the Affordable Care Act impose financial penalties on hospitals whose patients have to be readmitted soon after discharge. A growing solution, according to Partners’ Joseph Kvedar, is to send patients home with devices to measure their weight, blood pressure, heart rate and pulse, and then use telehealth technology to transmit data to the hospital or to physicians in their offices. Such monitoring could help head off further health problems before they become serious enough to force a patient back into the hospital.  

In one example of how this could work, Lee Memorial Health System in Fort Myers, Fla., which encompasses four acute care hospitals, launched a remote patient monitoring program in 2010. Each morning, patient “monitors”—small box-like stations equipped with scales, blood pressure sleeves and other equipment—provide verbal step-by-step instructions for self-testing and also ask a few basic questions. Results are transmitted to the nurse’s station at the Lee Memorial Home Health offices. Almost 7,000 patients have been followed in this way for cardiac, respiratory and other diagnoses, and the hospital estimates that the system has helped it avoid 1,783 readmissions, with savings of $6.2 million, according to Cathy Brady, a nurse and telehealth program manager at Lee Memorial Home Health.  

Research seems to suggest that telehealth services can help reduce emergency room visits and hospitalization and improve patient compliance in taking medications, often while generating high patient satisfaction. But a recent review of studies evaluating telemedicine for managing five chronic diseases—asthma, chronic obstructive pulmonary disorder, diabetes, heart failure and hypertension—in more than 37,000 patients was inconclusive about the value of such tools as remote monitoring and videoconferencing. “Evidence is still emerging on whether telehealth consistently leads to better care at lower cost,” Kvedar says.  

Meanwhile, reimbursement for hospitals and physicians is often an issue, with many health plans paying less for virtual visits or refusing to cover them at all. Medicare, for example, will pay for telehealth services only for patients who live in a federally designated rural county or health professional shortage area—a restriction that locks out about 80% of Medicare beneficiaries. That leaves pilot programs scrambling for funding. MGH is underwriting the cost of its teleneurology program and an array of other telehealth experiments, while North Mississippi Medical Hospital is picking up the $3,000 a month leasing cost for the RP-7 robot at Baptist Memorial for the first three years, and a lack of funds is hindering plans to install robots in other hospitals in the region. The first 50 monitors purchased for Lee Memorial’s home monitoring program were donated by the health system’s auxiliaries.

Licensing by state medical boards is another major hurdle, with regulations that vary widely from state to state. Ten state medical boards issue special licenses or certificates to out-of-state providers treating residents via telehealth, while laws in other states don’t specifically address this issue but leave physicians to deal with complicated, expensive credentialing processes. And while pending state and federal legislation could improve this landscape, progress may be slow. “We’ve been waiting two decades to solve telehealth reimbursement and licensure issues,” says Neal Neuberger, executive director of the Institute for E-Health Policy in Arlington, Va.  

In spite of such challenges and the need for ongoing research, telehealth seems unlikely to give up its foothold in medicine. Right now, telehealth still “seems new and different,” says Lee Schwamm at MGH. “But in the future, even four to five years from now, I don’t think we’ll be calling it ‘tele’ anything. It will just be another way we practice medicine.”  


1. Telehealth among U.S. Hospitals: Several Factors, Including State Reimbursement and Licensure Policies, Influence Adoption, by Julia Adler-Milstein, Joseph Kvedar, et al., Health Affairs, February 2014. This study is the first to identify the hospital, market and state-level factors associated with telehealth adoption among U.S. hospitals. 

2. Telehealth: Seven Strategies to Successfully Implement Disruptive Technology and Transform Health Care,” by Lee Schwamm, Health Affairs, February 14, 2014. This MGH neurologist raises the challenges involved and addresses some potential solutions for integrating telehealth interventions into traditional ambulatory and hospital-based practices.

3. is the website of the American Telemedicine Association, a Washington, D.C.-based nonprofit devoted to promoting telehealth. It provides a definition and review of telehealth services, delivery methods and benefits today.

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