How are telehealth and managed care alike?

By Russ Newman, PhD, JD
Executive Director for Practice

The popularity of telehealth?the application of telecommunications technology to the delivery of health information and services?continues to grow among the media, health-care policy-makers and even lawmakers. Actually, it is the promise of telehealth in making health-care services more accessible and cost-effective that has drawn high praise. But the promise is currently unrealized.

Before blindly concluding that the potential benefits of telehealth will be easily achieved, perhaps we can learn some valuable lessons from managed-care strategies?another once promising health-care 'technology' whose potential has never materialized.

Policy-makers and lawmakers once considered managed-care strategies the solution to high health-care costs and related barriers to access. Early managed-care law clearly was 'enabling legislation' designed to facilitate the growth and development of managed-care arrangements. The HMO Act of 1973, for example, exempted federally qualified HMOs from burdensome requirements facing insurance companies and made funding available to eligible start-up managed-care companies. The rationale: the more such companies that exist, the better the prospects for solving health-care cost problems. Now, not only has managed care failed to solve these problems, it has also created numerous others that cannot be regulated and reined-in fast enough.

Similarly, early telehealth law has involved enabling statutes intended to facilitate the application of telecommunications technology to health care. The Telecommunications Act of 1996 lowered access fees to make Internet and interactive video more accessible to rural providers. Further, the Health Centers Consolidation Act of 1996 made grant funds available for the development of telehealth services in underserved rural areas.

As with early managed-care legislation, few if any efforts are being made to regulate and set limits to telehealth. It will be unfortuate if recognition of the need for limits similarly comes only after many significant problems have been enabled.

Managed care originally was intended as business and financial arrangements to facilitate the provision of health care. Soon it became apparent, however, that managed-care entities actually were directing and controlling health-care services delivery. In effect, managed-care companies were providing care. Nowhere is this clearer than from a recent Arizona court decision that the state medical board has jurisdiction over the medical director of Blue Cross/Blue Shield of Arizona for his precertification activities. The court held that utilization review procedures in question constituted the practice of medicine, not the practice of insurance.

Like managed care, telecommunications health care also was intended to facilitate the provision of services. Without appropriate regulation and limits, however, what will prevent telecommunications companies from actually providing health services? Will the courts ultimately need to give boards of medicine or psychology jurisdiction over the corporate officers of large telecommunications companies like Picturetel for practicing health care?

For both managed care and telehealth, the courts are seeking new ways to handle accountability issues. Initially, courts viewed managed-care arrangements as business arrangements. The judiciary applied contract law principles relying on agreements made between the parties involved and rarely interfered. Now, however, by increasingly applying tort principles of liability and accountability, the courts are holding all parties, including managed-care companies, responsible for their negligence.

Although development of common law with telehealth has not yet moved as far, many accountability questions are being raised. When does an actual patient-therapist relationship begin when telecommunications are used? How does the law distinguish between supervising, proctoring and consulting in telehealth? Do all parties involved share liability equally? How do the courts deal with defective technology or a negligent technician causing a health care professional to provide damaging treatment? Such questions eventually will reshape common law related to telepractice.

Last, but certainly not least, the effect of commercial interests in managed healthcare has been paramount. Quality care has suffered as investors and stockholders in for-profit managed-care companies have placed financial interests in direct conflict with patient interests. As bad as this has been, some might argue that the commercial interests in managed care pale by comparison to commercial interests in telecommunications companies. If, as with managed-care companies, telecommunications companies become involved in health care, the adverse impact on quality care may only intensify.

All this does not mean that telehealth is devoid of potential benefits. Rather, we must carefully think through the positive and negative implications of telehealth on patient care. APA?s Board of Professional Affairs is engaged in such analysis.

Perhaps we can learn from the experience of applying managed-care technology to health care. Limits, parameters, guidance and regulation must occur as telehealth begins to develop, not as an afterthought or once the damage is already done.