Community health centers are part of a continuum of care designed to support the poorest people in our nation’s rural communities. These centers typically are designated Federally Qualified Health Centers (FQHCs), which focus on delivering healthcare to an underserved population. They are often located in rural areas, serving a particularly important role in communities where there are simply no other healthcare providers to be found.
As organizations that receive taxpayer funding via Congressional oversight, they come under extensive scrutiny both for care quality and for efficiencies in their bottom line. Studies show that Community Health Centers often hit these benchmarks, but a February study documented nearly a $579,000 savings in a 200-facility network of FQHCs that are routinely using telehealth tools to deliver care.
Understanding the FQHC Model
The National Association of Community Health Centers (NACHC) says there are almost 1,400 of these facilities around the nation in more than 11,000 locations in all 50-states. All of these facilities offer comprehensive preventative and primary care while many also have pharmacies, dental practices, and mental health centers. While these organizations treat the lowest populations in the financial spectrum, they are not just located in rural areas, but also cities.
The mandate of these organizations is that they offer care regardless of the person’s ability to pay. They are required to offer services on a sliding fee scale, while Medicaid and Medicare make up the difference and provide reimbursement to the FQHC.
Using Telehealth to Cut Costs in Community Health Centers
Last month a new study was released showing the cost savings experienced by the Connecticut Medicaid program when a network of 200-FQHCs instigated a problem that used virtual consults instead of a face-to-face referral for four specialty areas:
- Dermatology
- Endocrinology
- Gastroenterology
- Orthopedics
The Community Health Center network serves approximately 150,000 patients in Connecticut every year; Medicaid covers 70%. From 2014 to 2016 the organization partnered with the American Medical Association (AMA) to sponsor a digital health initiative to improve efficiencies in the organization. Previously the AMA had successfully advocated for five new Current Procedural Terminology (CPT) codes for 2019 that will improve how physicians are paid for service delivery using digital health tools. Two of the codes now cover e-consults with a physician or other qualified healthcare delivery provider. The remaining three codes cover remote patient monitoring.
The study tracked e-consults between primary care providers at the Community Health Center facilities and an on-call network of dermatologists, endocrinologists, gastroenterologists, and orthopedists. They found that these costs averaged $84 lower than conducting the specialist referral via an in-person visit. Annually, the study tracked cost savings to taxpayers via the Connecticut Medicaid program of close to $579,000. These visits also reduced patient travel expenses and typically had a much faster turnaround, cutting extensive wait times to see specialists on average to less than four days.
This was not news to the NACHC, whose policy paper on telemedicine from 2013 states:
Telemedicine (or telehealth) is the remote delivery of healthcare services and clinical information using telecommunications technology. Its use is widely viewed as a cost-effective alternative to traditional face-to-face consultations. Telemedicine is rapidly becoming a substantial component of healthcare in many parts of the country, particularly in rural areas.
Is this cost savings for FQHC organizations something only relevant to these community-focused organizations? How can telehealth improve the bottom line on an average practice service a mix of payers and not just Medicaid recipients?
Are Cost Savings Standard with Telehealth in any Specialty?
“Creating the best possible experience for patients, in terms of both price and convenience, ensures that they remain loyal to your organization and return for any subsequent healthcare needs.”
URAC
The Utilization Review Accreditation Commission (URAC) reports that telehealth is now a generally accepted best practice as a driver of cost reductions in the healthcare field. URAC reports that, while the cost savings of telehealth utilization vary by state, the average cost savings per medical facility is $20,841. But reports vary wildly – URAC says the average hospital cost savings in California is more than $104,000 across a variety of specialty areas.
These wide variances depend, of course upon how extensive the telehealth programs are. Organizations rolling out telehealth in a small initiative skew the study in the same way that large organizations like the Veteran’s Administration (VA) twist the cost savings much higher. The VA has been using telehealth since 2003 and today is using the technology in more than 700 ambulatory sites around the nation in 38 clinical specialties. More than 600,000 veterans benefit from these services. The VA reports extensive cost savings in these areas:
- Reduced inpatient days.
- Reduced readmissions.
- Reduced hospital admissions.
- Lowered overhead costs.
The VA also reports a savings of nearly $2,000 per patient on reduced travel costs to and from a clinical provider.
The Rural Broadband Association (RBA) has come out strongly in favor of telehealth as having a substantially positive financial impact on healthcare costs. But the cost savings is not exclusively tied to rural communities. The Wall Street Journal reports that a telehealth visit runs about $45 on average as opposed to $100 for the traditional in-person visit or $160 at an urgent care. The RBA reports that the average hospital savings in Arkansas, Kansas, Oklahoma, and Texas ranges between $61,600 to $101,600 annually. 93% of patients that have used telehealth report cost savings on their healthcare bill.
Telemedicine and Your Practice
Last year the Managed Healthcare Executive reported that, while the dollar amount varies, a standard benefit of telehealth is cost savings and improved access to care. Just as important is the fact that telemedicine is an effective tool for preventing complications such as sepsis after surgery, or for chronic care and prevention of hospital readmissions.
With many of the reimbursement barriers lifted, healthcare providers seeking to respond to consumer demand and cut costs have the opportunity to adopt a telehealth service line. The personal experience of providers on the OrthoLive app show extensive cost savings as well as improved patient outcome and satisfaction for orthopedic services.
Contact OrthoLive to talk about the positive impact telehealth can have on your bottom line.
