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#Telemedicine: Hope, hype, or just jumping through hoops? A perspective for hospitals by Dr. Senthil @drsenthilp , Jai Ganesh and Dr. Sai Praveen @thinkMD

Understandably, telemedicine is an inevitability in these extraordinary times. It is predicted that telemedicine could soon replace up to 30%-40% of in-person consultations. Technology adoption to the propagated scale will bring immense changes to the health system. Here we discuss some of the critical factors for a hospital to consider.

Patient volumes

Telemedicine is a great tool to improve geographic accessibility. However, it may not increase the number of consultations offered unless a physician’s working hours are increased perhaps by starting the day earlier/ending later. Experts opine that the time taken to consult a patient via telemedicine will be far higher than a patient-in-person consultation if the time spent on connectivity issues and post-consultation documentation are taken into consideration. Further, as doctors engage on multiple telemedicine platforms, the number of consultations offered in/through a hospital may decrease.

Revenue loss

A study among the hospitals in the USA identifies that the aggregate share of the total hospital revenue from outpatient services was nearly half (48%) in 2018 [1]. The proportion of revenues generated through outpatient diagnostic and pharmacy services in hospitals vary depending on the hospital’s service configuration and the pricing. Structured research data on this perspective is limited. We can safely assume that outpatient triggered downstream revenue will constitute between 20% and 30% of the total revenue in Indian hospitals. Most Indian hospitals typically do not have high margins on consultation services. Physician’s share of the consultation revenue is around 80%, and it is even 100% in some. Most hospitals work on this model only considering the diagnostic, pharmacy and inpatient referrals that arise from the consultations.

Necessarily, the patient after a teleconsultation will fulfil his/her prescription and diagnostic tests from the nearest pharmacy and diagnostic centre, respectively. This is a direct loss of revenue to the hospital, as the patient otherwise would have mostly used the hospital’s services. Considering that the income from outpatient diagnostic and pharmacy services accounts for even 25% of the total hospital revenue, the hospital may end up losing a maximum of 7.5% of its top line, if 30% of the consultations are conducted through telemedicine. The impact will intensify as the number of teleconsultations increase. While door-step services are a solution, they have their costs and service and geographic limitations.

The aggregate impact may be less for extensive healthcare networks having their chain of hospitals, pharmacies and diagnostic centres. Such chains can leverage their geographic presence and attempt to retain patients within their health system/network of facilities.

Cost

Telemedicine saves travel costs for a patient. For a hospital, providing teleconsultations through a software platform with proper recording and documentation may prove costlier than in-person consultations.

Health seeking behaviour

A significant positive and equally negative aspect of the Indian health system is that it allows physician and hospital shopping. Every patient/family wishes to be cared for by star physicians. Also, domestic medical tourism, especially towards hospitals in southern India and Delhi, is rampant. As a teleconsultation network expands, a physician from these destination hospitals can consult patients from anywhere. Say, a patient in West Bengal/Tripura/Assam will directly consult a physician in Chennai/Bengaluru/Hyderabad for chronic disorders/elective surgical needs. Further, as consulting a physician becomes a flexible and easy process, the number of second opinions will increase, and that may also result in local/regional spillage of patients. Such change in health-seeking behaviour may have an impact (even if minimal) on local standalone hospitals.

Conclusion

Telemedicine has a lot of evident benefits. It is keeping the physician/hospital-patient relationship alive during these extraordinary times. Many hospitals have now implemented telemedicine as part of their services. Soon it is going to be essential to assess the impact and start innovating service models to improve utilization and revenue. As telemedicine becomes inevitable and ultimately indispensable – hospitals have a lot to think about. The game has begun, and the rules are just being written.

[1] Inpatient no longer king as hospital outpatient revenue grows; Revenue Cycle Intelligence; https://revcycleintelligence.com/news/inpatient-no-longer-king-as-hospital-outpatient-revenue-grows accessed on 26 May 2020.

Dr. Senthilnathan Padmanaban
Dr. Senthilnathan Padmanaban

Dr Senthil is healthcare management professional with experience of working in multiple thematic of healthcare including health information technology, health systems development, business modelling, public private partnerships, market research, product/service designing, facility planning, medical asset planning, project documentation, project management, training, operational efficiency,  turnaround and strategic roadmap for hospitals and health systems. He has offered consultancy to over 50 hospitals (7800+beds) in India and abroad. He has also provided consultancy to the World Health Organisation (SEARO) and government projects in India. Earlier, he worked with Accenture and Xerox in implementing and maintaining health information systems for large hospitals/health systems in the USA. He is a certified Professional, Academy for Healthcare  Management, USA (PAHM).


Jai Ganesh Udayasankaran
Jai Ganesh Udayasankaran

Jai, MSc, MBA works as Senior Manager for Healthcare Information Technology and Telehealth initiatives at Sri Sathya Sai Central Trust, Prasanthi Nilayam, Puttaparthi, Andhra Pradesh, India. 


Dr Sai Praveen Haranath
Dr Sai Praveen Haranath

Dr Sai Praveen Haranath is a pulmonary and critical care physician working at Apollo Hospitals, Hyderabad, India and is also a founding member and current medical director of the Apollo eAccess program which provides teleICU services around India.

He graduated from Madras Medical College and then went to the US. Over 15 years in America he specialized in Internal Medicine, Pulmonary and Critical Care Medicine and is American Board Certified in these fields. He also obtained a Masters in Public Health degree from UConn.

He is a Fellow of the American College of Chest Physicians and active on several of their committees and is Chair of the Executive Committee of the Council of Global Governors of the ACCP . He is a member of their Board of Regents and Chest Foundation Board of Trustees.

He returned to India in 2011 to pursue his lifelong desire to raise the standard of Indian and global healthcare through the ethical practice of excellent medicine. He has been interested in managing tobacco and smoking addiction for several years and was also selected to attend the Johns Hopkins Global Tobacco Leadership Program in 2016. Innovation and creation of value in healthcare technology is a daily mission and he currently mentors several healthcare startups. Dr Sai Praveen Haranath is a committed and passionate champion for the practical delivery of ethical healthcare.

Blog Link: https://indiachest.wordpress.com/
Medium Blog: https://link.medium.com/IlB1uKq8F6


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