Thinking Outside the Box for Health Care Solutions

COMMENTARY Health Care Reform

Thinking Outside the Box for Health Care Solutions

Jan 8th, 2019 3 min read

Commentary By

Stephanie J. Zawada

Graduate Fellow in Health Policy

Katie Tubb

Policy Analyst

Under a new federal rule, patients will be able to initiate a virtual doctor’s visit and receive care with the touch of a screen. LaylaBird/Getty Images

Key Takeaways

A solution would be increasing choice and competition in the electric-utility industry.

Without electricity, remote patient-monitoring devices and “smart” medical technologies won’t work.

Some hospitals have seen cost savings by utilizing alternative energy options.

The Centers for Medicare & Medicaid Services has issued bold reforms supporting telemedicine as a viable option to increase access to care while decreasing health care spending.

It’s this kind of thinking outside the box that’s desperately needed in health policy.

Recently, a new Medicare rule proposed the expansion of telemedicine benefits for Medicare Advantage enrollees by allowing reimbursement for patients to check in with their physicians via telemedicine.

Patients will be able to initiate a virtual doctor’s visit and receive care with the touch of a screen—all while skipping the commute to their physician’s office.

This update is on trend with more patients trying telemedicine than ever before. From 2011 to 2016, nationwide telehealth usage increased by 643 percent.

Telemedicine has also reduced the usage of some of the most expensive health care services, such as emergency department visits,  71 percent of which are unnecessary and avoidable.

In 2017, for example, the Houston Fire Department/Emergency Medical Services Division found that its telehealth program prevented avoidable ambulance trips and emergency department visits 80 percent of the time.

One big problem: Some of the most vulnerable communities in America still lack reliable, affordable access to electricity and, subsequently, the internet. Without electricity, remote patient-monitoring devices and “smart” medical technologies won’t work.

So, while the new Centers for Medicare and Medicaid Services rule expands access to care, many in underserved areas lacking electric power, such as tribal lands, will be left behind.

This raises the question: Are there reforms that could improve health care for patients and providers, outside of health care policy, that policymakers should be thinking about?

Access to affordable energy isn’t just a problem for patients. Cutting energy costs is also a concern of hospitals, one that will continue to grow as new digital equipment, including telemedicine technology, comes to market and varies their current load and usage patterns.

A solution would be increasing choice and competition in the electric-utility industry.

Seventeen states have been experimenting with retail electric competition. To introduce competition in their electricity markets, these states have adjusted rates by separating charges for the production of electricity from those associated with its transmission and distribution to customers.

By splitting the generation of power from its delivery, individual customers can choose from different power sources—from wind to nuclear and everything in between—while power companies are incentivized to earn customers’ business with innovative products, technologies, and financial services to meet unique customer preferences.

This flexibility allows, for example, a hospital to pay for guaranteed service to meet its uninterrupted electricity needs or an individual to opt in to demand-response programs for discounted electricity bills.

Electricity needs are not a one-size-fits-all solution in the digital age, and retail electric competition is needed to support innovation in areas like health care.

Texas, for example, has been a pioneer in supporting retail electric competition. Today, energy choice is available to more than 80 percent of Texas residents.

Texans have “hundreds of products available, like 100 percent renewable power, time-of-use pricing, loyalty programs and service bundled with smart thermostats.” This wide variety is not available in states without retail electric competition.

Retail electric competition also opens the door for the development of power options that support cutting-edge health care technologies, such as telemedicine tools.

Small physician practices that opt to provide telemedicine services can benefit from lower electric-power bills through increased electricity competition, too.

Some hospitals have seen cost savings by utilizing alternative energy options.

In New Jersey, a state with a retail electric market, the CentraState Medical Center—nationally recognized as a “Most Wired” hospital and an early adopter of telemedicine—began using solar panels to generate electricity in 2015. Within the program’s first year, CentraState saw a reduction in energy costs of $300,000.

Opening the electricity market to competition will drive down electricity costs and enable health care providers to offer less expensive, more personalized care, such as telemedicine.

With lower electricity costs, more patients will have access to the electric grid and innovative health care technologies that decrease the cost of care.

This piece originally appeared in The Daily Signal

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