Research & Commentary: The Rise of Telemedicine

Published November 15, 2018

Telemedicine—the use of information technology to remotely diagnose, treat, or monitor patients—can transform health care delivery by making it more affordable and widely available. The main barriers preventing telemedicine from expanding further in many states are government regulation and the inability of the current system to properly reimburse doctors providing telemedicine services. Over the past two months, the Centers for Medicare and Medicaid Services (CMS) has started to strongly shift its policies in favor of increasing the use of telemedicine and telehealth services in Medicaid.

In November, CMS introduced a significant new rule that would expand telehealth for Medicaid and the Children’s Health Insurance Program (CHIP). The proposed rule would make it easier for providers and plans providing telehealth services to get approved in Medicaid and CHIP managed care.

The proposed rule would also permit states to choose other benchmarks to reflect accessibility. For example, new metrics could replace provider distance measures with the time it takes in a state to obtain a virtual appointment.

In a statement about the proposed rule, CMS Administrator Seema Verma said the rule would improve outcomes and cut down staff time and costs. “Today’s action fulfills one of my earliest commitments to reset and restore the federal-state relationship, while at the same time modernizing the program to deliver better outcomes for the people we serve,” Verma said.

According to Modern Healthcare, CMS has estimated the changes would reduce states’ administrative costs by $27 million by requiring 120,000 fewer hours in clerical tasks.

States should work to lower their regulatory barriers to telehealth providers. Currently, 200 telemedicine networks with 3,500 service sites are in operation across the United States, according to the American Telemedicine Association, and the number of telehealth providers is only expected to grow in the coming decades.

According to, telemedicine services can have an especially positive effect on the 133 million patients with chronic conditions such as diabetes, irritable bowel disease, and multiple sclerosis.

Additionally, the U.S. Department of Veterans Affairs (VA) was able to reduce “the number of bed days of care by 25% and the number of in-hospital admissions by 19% using home-based video visits,” as noted in a recent VA study.

Some reforms lawmakers should consider include allowing practitioner-patient relationships to be established remotely and requiring health care payers, such as insurance companies, to provide reimbursements for telemedicine services at the same rates as comparable in-person services.

Several states have already passed or considered legislation unleashing the telemedicine market so that providers can use this new technology to expand their reach. In 2017, New Jersey and Vermont passed laws providing telemedicine payment parity. In Texas, where telemedicine has historically faced significant backlash, rules were passed in 2017 that enable Texas practitioners to use telehealth services.

Telemedicine can provide quality health care services to more people who need them, and they can do so at a lower cost. The only thing holding telemedicine back is interference from government, not technology or an unwillingness from health care experts to provide care remotely.

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

AHRQ Finds Telemedicine Clinically Effective
Politico’s Mohana Ravindranath examines a new study from the Agency for Healthcare Research and Quality that found telemedicine is clinically effective. The study was unable to find conclusive evidence to determine if telemedicine is more cost-effective, however.

The Promise of Telehealth For Hospitals, Health Systems, and Their Communities
This study from the American Hospital Association examines the potential benefits of telehealth. The study’s researchers focus on how telehealth is being used by hospitals and considers how this important innovation helps patients and providers alike.

Telemedicine Facts that May Surprise You
In this article published by, Lauren Cranford examines several research studies and polls that prove telemedicine is popular and effective.

Telemedicine … Across State Borders
Shirley Svorny, professor of economics at California State University at Northridge, discusses the value of using telemedicine services, how allowing telehealth care across state lines would improve the availability of care, the barriers to telehealth expansion, and some reforms state and federal legislators should consider that would expand telemedicine services.

The Traveling Doctor: Medical Licensure across State Lines
Brittany La Couture of American Action Forum examines the licensing process for doctors in several states and argues for reform. “Though it is important to recognize the right of states to protect the health, safety, and welfare of their citizens, mutual recognition and portability would still largely give states the ability to continue to monitor the care that is provided by physicians licensed in their state while creating incentives for states to build competitive regulatory systems that will attract physicians to those states,” wrote La Couture.

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.”

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.

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 the Heartland Institute’s website and PolicyBot, Heartland’s free online research database.

If you have any questions about this issue or The Heartland Institute’s website, contact Charlie Katebi, state government relations manager, at [email protected] or 312-377-4000.