Telehealth and remote-patient monitoring (RPM) are not new themes in the healthcare IT universe. As our colleague, Michael, mentioned in a November post, the telehealth industry has a total addressable market of $30 billion and continues to grow. To increase usage and patient penetration, companies and investors alike have recently taken steps to innovate and advance the technology and delivery of the solutions in this space. Investments throughout the first two months of the year in companies such as Minneapolis-based Zipnosis, Glendale, CA-based SnapMD, Palo Alto, CA-based Call9, and Naperville, IL-based PhysIQ all signal a strong wave of investment in the space in the coming year. There is arguably as much momentum today for the adoption of remote and telephonic care delivery as there has ever been, and the remote care market is positioned to be a key theme throughout 2016.
According to a recent study from the Society for Participatory Medicine, the vast majority of Americans say they would welcome the use of technology and mobile devices to monitor their health. In fact, nearly 85% of respondents felt that the tracking of key metrics, such as blood pressure and heart rate, would help them manage their health between provider visits. In addition, 57% of those surveyed would like to use a device to share the monitored information directly with their provider. Physicians and providers also support materially increasing the usage of RPM technologies. According to a study by Frost & Sullivan, providers’ fears of costly readmissions—amidst the industry’s move towards continuous care models—are fueling a need for tools and technologies that allow them to monitor, detect and react to their patients’ health outside of the facility setting and between visits. While valid concerns regarding implementation costs and limited reimbursement exist, over 75% of the physicians surveyed feel that utilizing RPM can add significant value in their delivery of care.
These physicians’ sentiments are starting to fall on influential and listening ears, as telehealth-centered legislation has begun to gain traction in Washington. Earlier this month, Congress began discussing a bipartisan bill that would expand Medicare’s reimbursement parameters for telehealth and RPM. Introduced on February 3rd, the Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act aims to increase quality of care as well as increase cost savings for Centers of Medicare & Medicaid Services (CMS). The proposed legislation would remove or significantly lessen restrictions on permitted originating sites of care as well as expand the number of reimbursable codes. While the bill itself is still in the early innings, we think establishing programs like those described in this bill, such as the inclusion of RPM as a basic benefit under Medicare Advantage, are important steps in the right direction. Not only would the increased reimbursement for these services drive further investment and innovation in this area of technology, but the extension of remote monitoring coverage to post- and sub-acute settings could prove to increase overall quality of care across the continuum by driving interoperability and communication between care settings, ultimately leading to substantial savings. According to a recent study from Avalere that analyzed the spending impact of the main policies of the proposed legislation, the expansion of telehealth and RPM coverage under Medicare would decrease federal spending by $1.8 billion over the next ten years.
As has been the case before, increases in CMS reimbursement often serve as the first “carrot” towards driving the advancement and adoption of innovative healthcare technology. As patients and providers continue to search for and demand alternative and cost-effective models of care in an evolving care delivery environment, we anticipate that RPM and telehealth technologies will continue to see support and buy-in from CMS, positioning the industry for expansive growth and innovation. Until then, let us know what you think.