Business case analyses of telemedicine in three organizations of community health centers

Background: Telehealth has become a key component to improve health service delivery in medically underserved areas, but its use has not been universally embraced because of many barriers, most notably implementation costs and lack of reimbursement. Many programs have been piloted throughout the country through outside funding, but have ceased operations once grants ended. A major challenge to these programs is building sustainability beyond the startup funding.

Objective: JSI examined the business case for telemedicine initiatives at three distinct community clinic organizations serving underserved populations to help guide other organizations planning the development of telehealth programs to think critically through the financial considerations/sustainability.

Methods: JSI developed a separate business case for each of the three clinic organizations based on interviews with organization staff and clinic financial and utilization data. Each business case answered the following questions:

• What is the financial model for each clinic organization's program? • Are those models financially sustainable given existing patient volume? • Does each program rely on outside funding for initial capital costs and equipment upgrades?

Results: While two of the organizations implemented similar programs, the financial model varies between the two. While one organization's specialist can bill for his services, the other relies upon follow‐up visits as a source of revenue since its specialist does not bill for services. The third organization has a more complex program consisting of a variety of specialties where they serve as both a hub and spoke to internal and external clinics.

Discussion: While research has shown that telehealth technologies can increase access to specialty care for both rural and urban communities, these programs often fail due to sustainability beyond start up funding. It is hoped that this project can help guide other organizations planning the development of telehealth programs to think critically through the financial considerations.