Bill FeraTelehealth helps patients get the care they need where and when they need it. In this era of healthcare reform, the efficiencies created by telehealth are increasingly valued. A recent study from business information provider IHS predicts that the U.S. telehealth market will grow from $240 million in revenue today to nearly $2 billion in 2018—that’s an annual growth rate of 56 percent. But along with the clear advantages that come with extending capabilities and patient interactions beyond the traditional office setting, telehealth programs also involve risk. So before developing a telehealth program, provider organizations should consider four key steps to ensure their program is a scalable, financially viable enterprise solution.

Understand Your Market 

Before jumping into a telehealth program, be sure you fully understand growth opportunities, economic return, and execution risk. Consider macro trends including market size, competition, and reimbursement rates. Take into account available telehealth solutions and supporting technologies, integration capabilities, and security parameters. Consider patient and provider demographics and disease and geographic trends. Continuously ask if telehealth is an investment that makes sense for your organization.

Set Your Strategic Intent 

Define what telehealth success means to your organization by conducting a needs assessment to identify and prioritize potential telehealth activities that will match gaps in services in your community. Identify how your telehealth program will provide solutions to current challenges.  And don’t forget organizational alignment. Assess how your telehealth program aligns with the overall mission, vision, values, and culture of your organization.

Design Your Program 

Leverage the input of a multidisciplinary group of stakeholders to detail all dimensions of your telehealth program, including the following.

Governance. Establish a governance structure that outlines where clinical and operational oversight resides and who is accountable for telehealth financial performance.

Revenue model. Define the payment type, reimbursement level, and value proposition. Determine which services are reimbursable through Medicare, Medicaid, and private insurance. Consider other potential funding sources, such as government grants, foundations, and vendors or developers willing to fund telehealth expansion. Plan for long-term financial sustainability.

Human resources. Determine the number and type of staff (and support staff) needed to deliver telehealth services.

Processes and policies. Develop standardized processes and policies that facilitate high-quality, efficient care. As much as possible, incorporate telehealth into current standards to encourage easier adoption. 

Technology. Determine the features of telehealth technology that will meet your clinical needs and business plan. Develop technology specifications, and consider:

  • Specialized telehealth technologies for activities, such as telemonitoring, remote diagnostics, and remote robotics
  • Digital solutions that will enhance and facilitate your core connected capabilities, such as mobility solutions, patient portals, and call centers
  • IT infrastructure needed to integrate and support telehealth and digital solutions

Training. Develop a plan for training, licensing, and credentialing. Training should include direct users of telehealth technology as well as administrators and referring providers.

Measurement. Identify performance metrics and the performance reporting capabilities needed to effectively gauge program success. 

Partnerships. Identify potential collaborators and partners to alleviate costs, accelerate program implementation, drive innovation, and manage risk. Consider partnering with vendors, payers, other providers, and major employers in your region.

Implement and improve

Be sure your implementation timeline allows enough time to secure executive and clinician support. Order, install and troubleshoot equipment. Train staff and ensure required credentialing. Then roll the program out in phases. Use a small pilot program to fully test care and technology plans and quantify your return on investment by measuring clinical results and evaluating patient and provider satisfaction. And finally, strive to continuously improve. The most successful telehealth programs constantly integrate changes based on consumer and provider feedback. 


Bill Fera, MD, is Principal in Ernst & Young LLP’s Advisory Health Care practice and is based in Pittsburgh. Follow Bill on Twitter: @BillFeraEY

The views expressed herein are those of the authors and do not necessarily reflect the views of Ernst & Young LLP. 

This material has been prepared for general information only and is not intended to be relied upon as accounting, tax or other professional advice.  Please refer to your advisors for specific advice.

Publication Date: Friday, March 14, 2014