Research & Commentary: Telemedicine

Published August 18, 2014

Improvements in communications technology have led to rapid increases in the efficiency and reach of industries throughout the modern economy. The quick and simple transfer of information over the Internet has allowed companies to provide more services remotely, giving consumers easy access to more new products at cheaper prices. One sector that has yet to embrace the full potential of modern communication networks, however, is the health care industry. 

Telemedicine — the use of information technology in the diagnosis, treatment, and monitoring of patients’ conditions — can dramatically lower the costs of health care while increasing access for thousands of patients. Telemedicine has existed for years at a basic level. Only recently, however, has technology advanced to the point where the full process of diagnosis, analysis, and prescribed treatment can often be done remotely. One of the main benefits of telemedicine is its ability to provide care to areas that are currently underserved, such as rural or economically depressed regions. 

Adam C. Powell, president of Payer+Provider Syndicate, a health services consulting firm, outlined several ways telemedicine could help decrease healthcare spending in a 2012 Healthcare IT News article. Powell notes the use of remote analysis services, remote monitoring technologies, and mobile health monitoring enable health care professionals to pool resources and prevent unnecessary and expensive inpatient stays and emergency room visits. He also notes telemedicine helps reduce hospital readmissions after treatment, which cost patients and the industry more than $16 billion each year, according to a 2011 study by National Institute for Health Care Reform. 

The main barriers preventing telemedicine from expanding further are government regulation and the inability of the current system to properly reimburse doctors providing telemedicine services. Strict licensing standards have become a significant barrier to entry in the health care industry. In many instances, states control licensing standards, professional discipline, and the various costs associated with the licenses. 

Strict licensing laws have hindered doctors providing telemedicine services across state lines. The arduous and often expensive licensing process has made it difficult for entrepreneurs to enter the market with new services, slowing the competitive process that lowers costs and improves consumer access. Credentialing creates another problem; doctors and medical staff have to be credentialed in each hospital they practice in, meaning doctors engaging in telemedicine need credentials for telemedicine at every other hospital they work with. 

Reimbursement is another major barrier limiting telemedicine. Each state has different rules for medical reimbursement, and not all states allow payment for certain telemedicine services. Until the payment system is improved, many doctors will be reluctant to provide these services. 

Telemedicine can provide health care services to more people who need it at a lower cost. It is hampered not by inadequate technology or a lack of demand, but by government regulations. State legislators should reform licensing standards to allow physicians to treat across state lines and work to streamline credentialing. 

The following documents examine telemedicine and various barriers blocking its expansion.

Ten Principles of Health Care Policy
This pamphlet in The Heartland Institute’s Legislative Principles series describes the proper role of government in financing and delivering health care and provides reform suggestions to remedy current health care policy problems. 

Research & Commentary: Medical Licensing and the Doctor Shortage
Heartland Institute Senior Policy Analyst Matthew Glans argues that although a complete repeal of medical licensing may not be practical, allowing physicians to treat patients across state lines and expanding the scope of practice for nurse practitioners are two steps states can take to address the shortage of doctors. 

Telemedicine: Changing the Landscape of Rural Physician Practice
Writing in the New England Journal of Medicine, Bonnie Darves argues new applications of telemedicine have enabled rural physicians to manage a wide range of acutely ill patients, improve accessibility to specialists, and reduce barriers to care in underserved regions: “With advances in technology, plummeting costs, and governmental health care system partnerships, telemedicine is now used by more than half of U.S. hospitals and has reduced rural practice isolation. Be sure that health plan and hospital credentialing, privileging, licensure, and malpractice issues are addressed before practicing telemedicine.” 

5 Ways Telemedicine is Driving Down Healthcare Costs
Steff Deschenes of Healthcare IT News examines telemedicine and mHealth, arguing they can help the healthcare system meet the Institute of Healthcare Improvement’s triple aim to increase the quality of care, improve the health of populations, and reduce the per capita cost of care. 

Physician Care and Telemedicine
Devon Herrick of National Center for Policy Analysis examines the benefits of telemedicine in providing health care at a lower cost and outlines the current barriers to expansion: “Entrepreneurs are using the telephone, the Internet and personal computers for innovative solutions to traditional problems of health care delivery. These advances are not only making care more accessible and convenient, they are also raising quality and containing medical costs.” 

Convenient Care and Telemedicine
This study examines the contribution of telemedicine and other information technology to innovative solutions to some of the problems patients and health care providers encounter under the traditional model of health care delivery. It also identifies obstacles to progress and the public policy changes needed to remove them. 

Telemedicine: Helping Consumers and the Environment
Over the next 10 years, broadband applications such as telecommuting, distance learning, teleconferencing, and e-materialization will decrease greenhouse gas emissions by one billion tons, the American Consumer Institute finds. This ConsumerGram takes a second look at one of the more promising and fast growing applications, telemedicine, and identifies several new ways these applications can help both consumers and the environment. 

Telemedicine: An Inquiry in the Economic and Social Dynamics of Communications Technologies in the Medical Field
Francis Pereira, Elizabeth Fife, and Antonio A. Schuh identify barriers to telemedicine that can be addressed by policymakers, broadband equipment manufacturers and service providers, and key players in the health care industry, to exploit the opportunities these new technologies offer. 

Telemedicine Can Build Bridge to Expanded Health Care, Say Panelists
Increasing demand for health care, particularly in underserved rural areas, is creating more demand on physicians, including family physicians. At a recent Robert Graham Center health policy forum, speakers provided examples of how telemedicine was working in three separate situations. Speakers argued the technology holds great promise for the future of health care. 

3 Solutions for Major Telemedicine Barriers
This article from Becker’s Hospital Review discusses a recently published study in Telemedicine and e-Health which found three major barriers to telemedicine implementation and use that must be addressed. 

Crossing the Telemedicine Chasm: Have the U.S. Barriers to Widespread Adoption of Telemedicine Been Significantly Reduced?
Widespread telemedicine adoption has been stymied by unnecessary technological, financial, and legal barriers for 40 years. In addition, business strategy and human resources have contributed to the delay of implementation. Cynthia LeRouge and Monica J. Garfield canvass recent events and activities in these areas and overall U.S. health care reform that might help to break down these barriers.


Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Health Care News at, The Heartland Institute’s website at, and PolicyBot, Heartland’s free online research database, at 

The Heartland Institute is available to send an expert to your state to testify or brief your caucus, host an event in your state, or send you further information on this or any other topic. If you have any questions or comments, feel free to contact Heartland Institute Senior Policy Analyst Matthew Glans at [email protected] or 312/377-4000.