Catholic system bets on telemedicine

As payment moves to value-based models, telemedicine could become an important part of the hospital’s financial future. One health system is already planning on the financial benefits by creating a standalone virtual medical center.

In May, Mercy, one of the country’s largest Catholic health systems, broke ground on a 120,000-square-foot facility designed to consolidate all its telemedicine initiatives under one roof. The $50 million building in Chesterfield, Mo., will be home to 300 physicians, nurses, researchers and support staff when it opens in 2015.

“Virtual care has the possibility of radically transforming outcomes for certain patients,” said Randy Moore, MD, MBA, president of Mercy Virtual. “It plugs many holes in the system so you get simpler and more effective interventions at an earlier stage.”

Although there are limited, but growing, possibilities for direct payment, the real value for virtual centers like Mercy’s will be in maximizing care.

“Sepsis is the top problem confronting healthcare systems – a condition where every hour of delay in treatment can result in 6 percent worse outcomes,” noted Moore. “Turnkey telesepsis solutions can accelerate recognition and treatment, enabling Mercy to decrease mortality by over 50 percent, and lower costs per case by over $8,000.”

All of the money saved when the patient does not take a turn for the worse goes directly to operating margins. The same holds true in population-based or shared-saving payment contracts.

As telemedicine matures, Moore thinks the virtual center may become an income stream for Mercy. Smaller hospitals and systems that see the benefits of telemedicine but do not have the size and economies of scale to make it feasible may come to Mercy to contract for these services, an idea supported by Jonathan Linkous, chief executive officer of the American Telemedicine Association.

“The intention of the Mercy project is to improve the quality of care for patients throughout their system, help reduce the cost of care by sharing specialists and also be able to create revenue by being able to provide this service to other institutions outside the Mercy system,” Linkous said. “I think most of their costs could be covered just by internal savings, so doing things like telestroke treatment for non-system hospitals become a source of additional income.”

In addition to helping save costs and potentially bringing in revenue, a virtual center for telemedicine can help improve the quality of care, added Wendy Deibert, vice president of Mercy's Telehealth Services, due to the amount of data and use of analytics to understand that data. “We will continue to evolve algorithms as the larger volumes of patients allow us to more quickly prove which interventions result in better outcomes.”