hours a day with certified emergency or family medicine physicians. The central and remote sites can be linked within five minutes. For minor problems, the consulting physician examines the patient through a video/audio link and an on-site nurse carries out orders as appropriate. For more serious cases, additional patient data (e.g., laboratory results, ultrasound, radiographs) may be transmitted so that a decision can be made whether to treat locally or transfer the patient to the larger facility.

The business analysis and strategy behind this arrangement has several elements. The remote sites have been spending up to $70,000 for backup emergency services of uneven quality. Allina could offer them the telemedicine link and transfer arrangement for $40,000 to $50,000 on a contractual basis and could sometimes successfully bill patients' insurers for services. Allina's rural hospital would be expected to increase its emergency care volume and revenues (from both transferred patients and consultations) enough to justify round-the-clock operation. The smaller satellite hospitals would increase their stability and save on the costs of backup emergency care and would likely keep some patients who would otherwise be sent elsewhere.


This chapter has briefly reviewed the history of telemedicine and illustrated a range of current applications. The historical review shows an initial emphasis on access objectives for rural areas, with recently increasing interest in urban and suburban uses. Although much attention is paid to interactive video applications, the committee was impressed by the continuing importance of telephone-based and other communications of many kinds.

During its deliberations, the committee heard considerable concern that many current demonstration and other pilot projects would share the fate of most of the 1960s and 1970s projects by not surviving the end of federal grant funding or other subsidies (Cunningham, 1995). Failure to link projects to major organizational plans and business objectives and poor planning were cited as problems. High transmission costs, awkward and quickly outdated technologies, low patient volume, lack of physician interest, and limited insurance coverage also contribute to concerns about program survival.

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