Telemedicine in a Managed Care System

As indicated in Chapter 1, the committee found managed care decisionmakers preoccupied with other priorities in health care markets that have become fiercely competitive and increasingly complex politically. Telemedicine did not appear to be a priority, although a few managed care plans are testing clinical and administrative roles for telemedicine. Convincing reports of feasible urban and suburban applications (e.g., for specialist consultations) and cost savings (e.g., from further concentrating specialist services) could spur much greater interest. The expansion of managed care into more rural areas may also spark increased attention.

One integrated health system that is testing telemedicine is Allina, a relatively new, not-for-profit system in Minnesota that resulted from the merger of an insurance company (Medica) and a large health care delivery system (Healthspan) that included a number of rural sites.9 The organization's telemedicine system has administrative, educational, and community service as well as clinical uses. It is being constructed with a mix of funds including internal resources, a grant from the ORHP, contracts and other arrangements with a consortium of rural hospitals (the Rural Health Alliance), technical assistance from several vendors, and an arrangement with U.S. West (the regional Bell operating company) that lets the system avoid long distance charges for its rural links. The insurance component of Allina pays for telemedicine consultations just as it would pay for any other accepted specialty consultation. The network began operating May 1, 1995, and now serves approximately two dozen urban and rural sites, including the corporate office in Minneapolis. Clinical consultations were initially limited (about 150 from May 1995 to February 1996) but are reported to be growing.

Allina is also testing a link with three very small emergency departments (including two that are not part of the Allina system) located in communities with fewer than 4,000 residents. They are linked with one of Allina's larger rural hospitals, which is staffed 24


This discussion is based on committee and staff interviews with Dr. William Goodall of Allina Health care Systems and a brochure Telemedicine: Making the Impossible Possible put together by Allina and the Rural Health Alliance Telemedicine Network, a consortium of eight rural Minnesota hospitals. See also Cunningham, 1995.

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