As the old saying goes, "everybody's talking about it." The hot topic is telemedicine and the "everybody" includes federal and state policymakers, the U.S. military, university medical centers, health services and clinical researchers, telecommunications companies and equipment vendors, private health systems and managed care networks, health care educators, prison officials, hospitals, rural providers, and probably even some patients who have experienced first hand some of the benefits of telemedicine.

This recent interest is not the first time that telemedicine has attracted attention. It spurred earlier interest as a possible answer to improving access to health care and addressing the maldistribution of health care resources, particularly in rural areas. Exploration of telemedicine first began in the 1950's. During the 1970's, telemedicine's potential to ameliorate problems of underservice and inequality in resources was the focus of a number of federal demonstration projects; however, with the end of federal funding, these projects seemed to fade away. With the persistence of the seemingly intractable problems of underservice and maldistribution, telemedicine has once again surfaced as a possible solution or tool. As one researcher active in the telemedicine area noted, "it was only a matter of time before telemedicine [was] rediscovered, pressed into service, and ushered into its proper niche in the healthcare system."

Heightened interest in telemedicine is being spawned by a number of factors. These include "two converging megatrends: advances in enabling technologies . . . and telecommunications and increasing demand for access to high-quality medical care irrespective of location." The technological advances have often been accompanied by decreasing costs, making telemedicine much more affordable. In addition, other changes in the health care arena are also supportive of telemedicine, particularly the expansion of managed care and its focus on providing accessible, low-cost health care. The development of health care networks, the critical needs of academic health centers and rural hospitals to find new mechanisms to sustain their patient populations and fiscal solvency, and the development of health care data and management information systems, also complement and build on telemedicine. As noted by some observers, telemedicine and telecommunications technology are unquestionably being examined as a means of enhancing the competitive edge and supporting the strategic goals of health care institutions. There is one other partner responsible for the growth in telemedicine -- the many players involved in developing the electronic information highway: state officials who look to the information highway as a means of economic development and growth, private industry (health and non-health) and local communities who also see their future linked to the information highway, and perhaps the most direct stakeholders and allies, the telecommunications industry.

Evidence of telemedicine's attraction can be found in the health professional literature, reports on trends in health care, and even in the popular press. Both Newsweek and the Washington Post have recently devoted attention to the issue. These publications and others chronicle the use of telemedicine for very sophisticated, specialized clinical diagnosis (complete with technological wizardry like electronic opthalmosopes, and futuristic robotic or virtual surgery and electronic gloves under development); important continuing education; and novel information services such as Physicians' Online, which enables physicians to access medical information services, obtain clinical advice on drug prescriptions, and even engage in differential diagnoses on hypothetical patients (40,000 physicians have used the service in 16 months). Unlike its previous incarnation, the new generation of telemedicine appears to be more far-ranging in terms of organizational involvement and support, technology, application and impact, and it seems to offer potential for "everybody" who is closely following its development.

The growing interest in telemedicine has been translated into program development, largely through government efforts, but with private sector support as well. It is estimated that about 60 telemedicine networks are underway in at least 40 states. The number of programs using sophisticated interactive (2-way) television (IATV) for clinical applications has increased from 4 in 1990 to at least 50 either in operation or in the planning or implementation stages.

Both federal and state governments have been active in promoting testbeds for telemedicine use. Perednia and Allen indicate that at least 13 federal agencies have been involved in telemedicine program development, most notably: the Department of Health and Human Service's Health Care Financing Administration, Office of Rural Health Policy, and National Library of Medicine; the Department of Commerce, particularly the National Telecommunications and Information Administration; the Department of Defense; the Department of Agriculture, and the Rural Utilities Service (Rural Electrification Administration). A total of $85 million in telemedicine funding was authorized for fiscal year 1994; the Office of Rural Health Policy was responsible for almost $5.5 million of these grants. Continued federal support from at least some of these agencies is in doubt because of budget reductions proposed by Congress.

State governments have also made substantial resource commitments to developing telemedicine programs. As will be discussed later in this paper, a number of states have provided funding support for telemedicine far in excess of the grants provided by federal agencies. They have often been joined in these efforts by the private sector, sometimes by choice and at other times through regulatory judgments against telecommunications companies that have resulted in sizeable windfalls for telemedicine development. Overall, as will be noted in subsequent analysis, the recent development of telemedicine initiatives and networks has truly been a public/private partnership.

Defining Telemedicine

Like many emerging technologies and new programs, and even a number of long-standing health care programs, telemedicine has no "universally accepted, all-inclusive definition." According to one source, it is "still somewhat loosely defined, most often taking its meaning from local or regional applications." This issue of defining telemedicine is not unimportant. In one state official's opinion, it is merely indicative of the complexity of the technology, its applications, and the entire planning and development process. Moreover, a clear definition of telemedicine is more than a semantic exercise. It impacts on program development and building support and consensus about the goals and expected outcomes of telemedicine programs.

A number of recent publications present similar definitions of telemedicine. One merely describes telemedicine as "encompass[ing] the exchange of medical information, not only for patient care, but also for education." Perednia and Allen provide a definition that is somewhat clearer but still broad: telemedicine is "the use of telecommunications technologies to provide medical information and services." Still others call for the use of the term telehealth, rather than telemedicine, to describe the "broader range of health-related activities, including patient and provider education and administration, as well as patient care."

In the premier issue of the Telemedicine Journal, Rashid Bashshur puts forth a more comprehensive, operational definition of telemedicine ("literally, medicine at a distance"). He identifies telemedicine ". . . as an integrated and complete system of healthcare delivery and education . . . ." This system uses telecommunications and computer technology in place of face-to-face contact between provider and client (or two providers) to "enable, facilitate, and possible enhance . . . interaction . . . as well as the transfer of information." Bashshur further defines telemedicine systems as "technologically based innovative systems for the remote delivery of personal health services, continuing medical education, and patient health education . . . used for remote, multisite delivery of clinical services and education." This focus on an integrated system reflects the belief that "telemedicine has the potential to restructure the system of providing patient care, continuing medical education, and patient health education," but only if it is implemented "in full fidelity." The importance of this comprehensive concept is supported by the experience of various states described in this report as programs struggle to create viable, fully utilized, cost-effective telemedicine networks.

While Bashshur's definition of telemedicine assumes an "integrated and complete" system, not all telemedicine programs incorporate all clinical, education, administrative and information services. Some programs only focus on one of these components, or possibly two or three. Others encompass all four types of uses. Programs may distinguish between the health care delivery elements -- more commonly referred to as telemedicine or teleconsultations, and the educational programming -- sometimes called distance learning or tele-education. Administrative activities and information services are often but not always present.

In this paper, the term telemedicine is used to encompass all of health care, education, information and administrative services that can be transmitted over distances by telecommunications technology. However, specific initiatives and programs that are described in the report may incorporate more limited types of services. Health care services provided via telemedicine can include: teleradiology, telepathology, medical consultation and diagnosis, remote robotic surgery, development of "virtual" surgical and diagnostic environment, remote emergency-trauma support, and field triage support. Educational programming provided through telecommunications technology, which is also termed tele-education, may consist of only continuing education or may include health professional education for a wide range of health professions as well (including distance learning degree programs and supervision of residency programs), patient education and public health education. These education activities can be incorporated under programs for distance learning as well as specifically telemedicine. A variety of information services may be part of telemedicine, such as electronic libraries like Grateful Med. Administrative activities include patient record management and transfer of medical data, as well as conferences.

Just as the actual uses of a telemedicine network may vary, so may the telecommunications technology and transmission mechanisms used for the exchange of information and interaction of services among telemedicine sites. No specific technology or transmission media defines telemedicine. Video (moving picture), still image, voice and data information may be transmitted by different "media of telecommunication," partially depending on the type of information transmitted, the needs of the users, and the availability of telecommunications infrastructure. Telephones, video cameras and monitors, fax machines, computers and computer networks can all be used to transmit information over phone, satellite or microwave systems. Various transmission technologies allow for one-way transmission of information, two-way transmission (including interactive), or one-way transmission of some information (such as video) and two-way transmission of other information (such as audio). In addition, the quality and resolution of information transferred between sites varies based on the type of technology and transmission.

THE STUDY

The Purpose of the Study

This study was funded under the Intergovernmental Health Policy Project's (IHPP) Primary Care Resource Center, which is supported by The Pew Charitable Trusts. Under this grant, IHPP is responsible for examining state initiatives in a number of areas related to primary care. Previously, IHPP has looked at state efforts to enhance community-based medical education and improve incentives for medical students and residents to practice in underserved areas.

Telemedicine was selected as one of the areas for study because of the keen interest in telemedicine as a means of addressing the persistent problems of maldistribution of health care resources in many areas of the country, particularly in rural America. Telemedicine represents a marked departure from other efforts to increase the availability of health care resources in underserved areas since it relies on technology to provide access to health care providers and resources located some distance away from the underserved areas, rather than programs to increase the actual health care workforce located in the underserved areas. In addition, telemedicine is also being espoused as a tool that can support the recruitment and retention of providers in underserved areas, potentially reducing their isolation and increasing their interaction with peers and their opportunities for continuing education. State health policymakers clearly have a role to play in the development of telemedicine and in its support of state health policy on primary care. This paper is designed to explore what that role has been to date, and to identify state initiatives on telemedicine. It is hoped that this information will be helpful to other states interested in telemedicine, and will also promote the sharing of ideas, strategies and program information among states that have already taken action regarding telemedicine.

Telemedicine is the subject of considerable exploration and evaluation at present. Various organizations, in the federal government and in the private sector, have prepared reports that describe current telemedicine efforts and identify issues that must be addressed in program development and also future research. Recently, the U.S. Health Care Financing Administration supported a comprehensive study of telemedicine. The Physician Payment Review Commission has also examined the issue of telemedicine. A conference and report on telemedicine policy prepared by a special work group for the Congress further attest to the attention this topic is receiving. Moreover, a federally-funded study is currently being initiated by the Institute of Medicine.

Although some recent papers address issues related to telemedicine development that are generally under the purview of state government, there is little information focused specifically on state telemedicine efforts. One exception is the recent policy action paper prepared by the Western Governor's Association. This IHPP paper is designed to identify the major state initiatives in telemedicine and to examine the role state government has played in promoting telemedicine. The principal goals of this paper are to:

· Identify the states that have taken substantive action to promote, develop and support telemedicine initiatives.

· Specify the types of actions and state policymakers and agencies involved in state telemedicine initiatives.

· Characterize the roles of states in developing and supporting telemedicine.

Study Approach

This paper was not designed to be a comprehensive compilation of all state efforts in telemedicine, nor a detailed description of telemedicine programs by state. Rather, it was intended to describe the major state efforts underway, using an informal case study approach, and provide an overview of the different approaches and policies of state governments with regard to telemedicine based on the most substantive initiatives to date. As a result, there was no state-by-state survey. Instead, existing reports about telemedicine programs were reviewed to identify programs with possible state government involvement. Federal and state officials and individuals active in telemedicine were also contacted to identify states that have played a key role in telemedicine development. In addition, IHPP's legislative tracking service was used as a data base to identify legislation related to telemedicine. Over 30 states were contacted to determine specific policymaking related to telemedicine, with contacts made in 27 states (information on a 28th state was obtained from a publication). In 8 of the 28 states, state government has not taken an active role in telemedicine development. Of the remaining 20 states, 2 additional states have not developed state policies or programs related to telemedicine despite mention of telemedicine in legislation, 2 other states have only determined administrative responsibility for future programs, and the remaining 16 are at varying stages of state involvement in telemedicine.

Once a state role was identified for telemedicine development, additional contacts were made in the state to determine the extent of state government involvement and the types of actions taken or planned. State reports on telemedicine planning and development were consulted, when available, although printed information on state activities and actual programs was quite limited except in states with a well-defined study process and reporting requirements. Both legislative and non-legislative activities were identified, and specific legislative enactments were obtained, where possible. This was sometimes quite challenging, since the legislative authority for program development was quite varied and occasionally could not be clearly identified as earmarked for telemedicine, particularly in budget appropriations. In addition, there was considerable use of state agency or discretionary funds, and the specifics of this funding also proved illusive at times. Information was also collected on telemedicine programs and networks that the state had a role in developing or supporting.

Key individuals active in state policymaking related to telemedicine were interviewed by phone, as were individuals involved in the telemedicine networks which state government has supported. While every attempt was made to draw an accurate and complete picture of the state's activities and the policymaking and program development process, the study's time and budget limitations did impose constraints on the number of individuals contacted. In addition, because of the diverse and sometimes fragmented responsibilities of different state agencies involved in telemedicine, the pieces of the policy process were not always easily put together. As an example, in two of the states with less cohesive state direction, identifying an individual with a "big picture" of the process proved quite difficult and came about after interviewing seven or eight people. Moreover, state actions related to telemedicine have been occurring rapidly, with a number of enactments and program changes occurring as this study nears completion.

Information in the following analysis and state descriptions is based on interviews with individuals in the following agencies and organizations: governor's offices; state departments of health and state planning, offices of rural health, bureaus or divisions of information services and telecommunications, public utilities commissions, and a prison authority; area health education center programs; university medical centers; telemedicine programs; hospital associations; and hospitals involved in telemedicine networks. Several providers and researchers in the telemedicine area were also interviewed. The individuals and agencies contacted varied by state.

Organization of the Report

This report is organized into two volumes. Volume I contains background information, and an analysis of the findings about state involvement in telemedicine development and the role of state policymaking in supporting telemedicine. This volume includes the following: Introduction (Section 1), The Study (Section 2), Summary of Findings (Section 3), and The Future of Telemedicine and the State Role (Section 4). A number of tables comparing state actions related to telemedicine as well as characteristics of telemedicine networks in these states are at the end of Section 3.

Volume II contains the individual descriptions of state policymaking and program development for telemedicine by state, and the real substance of this report. Volume II is organized into five sections and five groups. Section 1 contains the descriptions of the five states with the most well-developed telemedicine efforts: Georgia, Kansas, Louisiana, South Dakota and Texas (called Group 1). Another group of five states (Group 2) comprises Section 2 of this volume: Iowa, North Carolina, Oklahoma, Oregon and Pennsylvania. These states have taken substantive action but their efforts are less extensive and less comprehensive than the states in Group 1. Section 3 focuses on three states (Group 3) that are on the verge of program development, where state actions related to telemedicine have been fairly recent: Arkansas, New Mexico and Utah. The seven states in Group 4, described in Section 4, have played a much more limited role in telemedicine development, and there is considerable variation among the states in this group. Six have enacted legislation related to telemedicine and one has developed important policy outside the legislative arena; however, two of the states have actually taken no action. Of these seven states, the most substantive action has occurred in Colorado and West Virginia. In Virginia, a study has been initiated, while California and Wyoming have only set up the most basic administrative authority for future development. Kentucky and Wyoming include a reference to telecommunications in their state health reform legislation, but have taken no action. Included in Group 5 in Section 5 are the eight states that indicated that the state has not been a force in overall telemedicine development: Arizona, Florida, Idaho, Maine, Minnesota, Montana, Nebraska and Ohio.

All of the states in Groups 1, 2 and 3 are discussed in a narrative form, with a table providing supporting detailed information for all but 3 of the 13 states (there was not sufficient information to warrant a table for the 3 states). Two states in Group 4 have a longer narrative description, while the remaining Group 4 states have only a brief discussion of the state role or activity in the state. Legislation enacted in each state, when available, is included in Appendix A at the end of the report.

The narrative description of each state includes an analysis of the state policymaking process related to telemedicine and identification of the key individuals and offices involved in policy development, as well as the major actions taken by the state (e.g., legislation, funding, regulation). Summaries of state study assessments and recommendations are included where available. The remainder of the state narrative includes a brief description of telemedicine program development in the state (specifically for those programs in which the state has had a role; programs developed independent of state action are generally identified but only briefly discussed); use of the system and data collection and evaluation efforts; implementation issues; and future plans. The state tables have 13 cells of information, including identification of: the relevant programs (with state government involvement), state role, program goals, program organizational components, site selection criteria, transmission and technology used for telemedicine (including some cost figures, when available), telemedicine applications, specific utilization data and evaluations available or planned, funding sources, the array of public/private partnerships and other programs in the state, other related information, and a list of individuals contacted in the state.

In addition to Volumes I and II, this report contains three appendices. Appendix A contains all of the available state legislation supporting telemedicine development, organized by state. Appendix B includes a list of references. Appendix C includes a glossary of telemedicine terms, which is reprinted from an Office of Rural Health publication.

SUMMARY OF FINDINGS

Overview of State Actions

Telemedicine is of interest to states in all geographic areas of the country, although it is clearly a higher priority for western and southern states with more dramatic and difficult problems of access to health care and underservice. Interest in telemedicine has been growing since 1989, when Texas initiated the current round of telemedicine demonstration programs with the help of a newly established federal grant program and added state and private dollars. Since that time, and particularly in the last 2 years, a total of 16 states have actively joined the telemedicine bandwagon (Arkansas, Colorado, Georgia, Iowa, Kansas, Louisiana, New Mexico, North Carolina, Oklahoma, Oregon, Pennsylvania, South Dakota, Texas, Utah, Virginia, West Virginia), and 2 others have hinted at future intentions to pursue telemedicine development (California, Wyoming). (See Table I-1 at the end of this section for a history of state actions and program developments, and Volume II, State Profiles for a more detailed state-by-state discussion.) All of these states have taken somewhat different roads to developing and implementing state policy on telemedicine and toward supporting telemedicine program development, although there is common ground in their actions. However, there is certainly no single model that depicts state roles and actions in telemedicine. In fact, there are almost as many approaches to policy and program development as there are states involved in telemedicine.

The states with the longest track record in telemedicine, in addition to Texas, are Kansas and Georgia. These states continue to lead in telemedicine development, but they now have been joined by substantive efforts in Louisiana, and more recently, in South Dakota. All of these states either have programs that are statewide or moving in that direction (Georgia is the farthest along), multiple programs that cover most of the state, or expanding programs in areas of the state with greatest need. All have taken legislative action in support of telemedicine, all have provided some funding for telemedicine development, and all have established some form of supportive policy for telemedicine. Beyond this, the similarities greatly decrease in number.

Telemedicine has had a very evolutionary development in Texas, both in terms of government involvement and program development. From one demonstration program with mostly federal but also sizable state funding, Texas has funded several other telemedicine and distance learning projects while support for telemedicine has been building in the state's academic health centers and the state prison system, and a state agency has been creating a limited telecommunications network. These more focused activities, while important, pale in comparison to the state's recent actions. Texas has enacted public utilities legislation that promises to create a statewide telemedicine and distance learning system with the largest funding ever available in a state, and also assures reasonable telecommunications costs for this system. Moreover, these funds are from private telecommunications companies, rather than state dollars. As of 1995, the state is taking a very aggressive role in telemedicine and for the first time is establishing a formal coordination role in overall planning for telemedicine development.

In some ways, Louisiana has had a similar evolving approach to telemedicine, but of a different magnitude than Texas. The level of funding (and sources) and expansion of networks has been of shorter duration and considerably more limited. However, like Texas, Louisiana has taken action in 1995 to give the state a more central role in statewide system development through coordination and planning, rather than through a significant source of funding. Louisiana, however, is the first state to enact legislation that recognizes telemedicine as a reimbursable service and mandates specific private health insurance coverage for telemedicine.

By contrast to these two states, Georgia, which has the most extensive statewide system to date (it is only now becoming fully operational), has had the most straightforward approach to telemedicine development. Until recently, it has also had the highest funding commitment. Georgia was the first state to access telecommunications monies for telemedicine and distance learning, and has spent the last three years putting in place a statewide telecommunications network and telemedicine system that was created by one comprehensive, landmark piece of legislation. A central planning and coordinating body was established early on to direct the program, and other state support necessary for telemedicine development was also mandated in the initial authorizing legislation. Georgia is also unique because, as the "first" state network, it was able to capture limited Medicare reimbursement. It has been able to arrange both Medicaid and Blue Cross/Blue Shield reimbursement as well.

While Kansas, like Georgia, began its telemedicine journey with a university-directed pilot project, it has charted a much slower but steady expansion of telemedicine. The Kansas telemedicine program has had state support, but actual state dollars have been limited. The program has been largely self-sustaining, in addition to receiving support from the university medical center. However, the state has made its telecommunications network available to the telemedicine program. Although Kansas, like many other states, has considerable telemedicine activity directed by its university medical center, it is unique in that the initial impetus for development came from a rural provider. This partnership between a rural practitioner and urban medical center has been a real strength of the Kansas program. While the state continues to be supportive in Kansas, it definitely maintains a lower profile than in many of the other states. The program, however, continues to expand, and in 1995 has instituted a number of changes to support expansion.

South Dakota represents still another variation of how state government can facilitate and support telemedicine development. The state has not generated a large funding source for telemedicine (although special funds were used to support the demonstration projects), but has carved out a strong policymaking, leadership and facilitating role. Unlike the previous four states, South Dakota has taken a very deliberate approach to statewide telemedicine development, beginning with a broadly represented task force charged by the governor with conducting a detailed study and plan for telemedicine. Significant state administrative support for telemedicine development has accompanied this planning effort, which has included helping orchestrate a successful federal grant for program development. South Dakota has clearly established a public/private partnership for telemedicine development, while providing enabling support that can only come from the state. The most notable such support involves a number of significant actions related to telecommunications costs and regulations. As a result of these actions, telemedicine is becoming much more affordable, and at least one of the numerous barriers to rural hospitals making use of telemedicine is being removed.

Other states have taken equally diverse approaches to supporting telemedicine. Three states -- Iowa, North Carolina and Oregon -- began their efforts around the same time as Texas, but their initial focus was on creating a telecommunications network for education purposes, rather than for health applications. Since that time, all three states have expanded their educational networks for telemedicine use. Both Iowa and North Carolina have been extensively involved in state planning for telemedicine, but in different ways. In Iowa, which has the only state-developed and owned fiber optic network, a special state council has developed an analysis of issues related to telemedicine development and made recommendations for future actions in support of a statewide system. North Carolina's approach has been less direct, but has been incorporated into efforts to build an information highway in the state. Both states have a combination of public and private sector involvement, and in both states, program development is either completely or mostly funded from non-state sources.

In contrast to Iowa and North Carolina, Oregon assumed no overall planning role in terms of telemedicine or telecommunications until this year. Apart from first establishing a network for distance learning that has been used for health applications, the state's role has largely been limited to funding for one specific program. However, Oregon, like the other states, has now taken action to establish a central planning role for all telecommunications. This action was necessary because of limitations in the current telecommunications infrastructure in the state that threaten to prevent the state's citizens from availing themselves of the benefits of the information highway, and also severely restrict further expansion of telemedicine.

The involvement of other states in telemedicine has generally been both more recent (see Table I-1) and more focused on program development. State initiatives were established in both Oklahoma and Pennsylvania in 1993 with very different sources and amounts of funding. The Oklahoma network is covering a large part of the state, while Pennsylvania's project is much more limited and of uncertain duration. Apart from funding and general administrative support, neither of these states has taken other actions regarding telemedicine.

New Mexico and Utah have recently joined the ranks of states funding telemedicine program development. Efforts in both states are limited in scope. New Mexico preceded its program funding by a state study of telemedicine, while Utah launched into program development with no state planning. However, Utah has a range of technology and telecommunications activities that may lead to a more coordinated role for the state.

Arkansas has also now become one of the states supporting telemedicine development, but unlike New Mexico and Utah, it has followed Georgia's lead to establish a statewide system through comprehensive legislation. In three separate but related 1995 enactments, Arkansas has provided authorization for planning, coordinating and developing a statewide system, as well as substantial funding (state funds, not from telecommunications companies) Apart from Texas' recent landmark legislation providing for expansion of telemedicine, Arkansas' action clearly is the most significant with regard to 1995 program development.

Recent action by the state public utilities commission (PUC) promises to make Colorado just behind Arkansas in funding for new telemedicine development. Once again, telecommunications companies, through a regulatory judgment like in Georgia, will be funding program development. The PUC has mandated a grants program for telemedicine and distance learning, as well as a coordinating body with state and private representatives, to develop and manage this effort.

The only other actions by states -- in Virginia and West Virginia -- have been more limited. Virginia's authorization of a study on telemedicine may be a prelude to further state involvement; West Virginia has approved Medicaid reimbursement for telemedicine (there is a federally-funded program in the state) but there is reportedly little interest in the state in other action. California and Wyoming may be poised to take action, but this is still uncertain. There is considerable interest in California, and some planning underway by a public/private partnership.

Overall, in the last six years, a growing number of states have become involved in telemedicine development, as indicated on Table I-1. While only five states had specific plans or programs for telemedicine in 1992 or earlier, the number has grown each year since 1992. In 1995, there were not only 16 states with substantive state initiatives and programs but the breadth of state involvement has been expanding as well. More states are demonstrating their commitment to telemedicine, more attention is being directed to program development and improving existing networks (telemedicine development does take time and funding but it also requires good planning and coordination), and more emphasis is also being placed on building telecommunications infrastructure for telemedicine. In the last two years, a few states have also begun to tackle some of the thorny issues related to telemedicine development -- those involving provider licensure and supervision, reimbursement and telecommunications costs. New stakeholders are also entering the telemedicine arena in both the public sector (state prisons) and private sector (through expanding public/private partnerships and growing numbers of private hospitals).

State Policymaking For Telemedicine: Goals

In making telemedicine the focus of a study under the Primary Care Resource Center funded by the Pew Charitable Trust, the prime concern has been in identifying state policymaking promoting telemedicine and its potential impact on primary care and the problems of access to care in underserved areas. While many of the states have developed telemedicine initiatives specifically to address health care issues, others have had even broader concerns at stake. The development of telemedicine and telecommunications impacts on much more than health care and health education; it has particular significance for local economic development as well.

The multiple policy implications of telemedicine are evident in Table I-2, which identifies the state policy goals that have driven telemedicine development. The interrelated goals of economic development and improved health care access and quality of care have propelled state actions in Arkansas, Iowa, Louisiana, North Carolina and Utah. Improved educational access is also an integral part of the policy agenda in Arkansas and Iowa. Building the information highway has been key to the state's involvement in North Carolina, while a specific policy focus on developing management information systems, particularly for health, has complemented telemedicine development in Iowa, South Dakota and Utah. In Texas, previous state policy has been focused on improving rural access to health care, but with the recent public utilities legislation, there is an added emphasis on providing equity in telecommunications in the state as well as equity in terms of educational and health care access.

A number of states (California, Georgia, Kansas, New Mexico, Pennsylvania, Virginia) have targeted their policy goals for telemedicine specifically on improved access to health care, and in some cases even more narrowly on health care in rural areas.

Of the remaining states, one (Oklahoma) has pursued development of telemedicine primarily as part of a state strategy for economic development. Other states with a more limited state role to date (Colorado, Oregon, West Virginia, Wyoming) have not enunciated any state policy focus for telemedicine.

State Policymaking For Telemedicine: Classification of Policy Actions

State policymaking through legislation is a primary focus of IHPP's analyses of various issues in primary care for the Primary Care Resource Center. Much of state telemedicine policy has a legislative basis, particularly for the development of statewide telemedicine systems. However, telemedicine has a wide range of policy support, extending beyond legislation to include specific executive branch initiatives, administrative funding support outside the legislative appropriation process, multiple state agency support through planning and in-kind services, and various other kinds of facilitating actions and regulations.

Legislative and Non-Legislative Actions

The vast number of states involved in telemedicine planning and development have either been led by, or enlisted, the legislature in the policymaking process. Sixteen states have enacted legislation in support of telemedicine since 1989, as shown on Table I-3. Only Oklahoma and West Virginia have not. A slightly smaller number of states -- 11 -- have taken non-legislative action, with 9 states pursuing both legislative and non-legislative forums for promoting telemedicine. States with no significant non-legislative policy support for telemedicine can be characterized as newer or more limited state efforts.

There is no real distinction between state legislative and non-legislative policymaking in support of telemedicine. Rather, the venue for policy development is more reflective of individual state policymaking and the individuals or entities interested in, and responsible for, telemedicine development in each state. (The various players and policy development process for each state are described in the state profiles in Volume II.) Legislation and non-legislative actions have been used equally to: 1) initiate state action or authorize program development, 2) provide funding, and 3) support and facilitate telemedicine in a variety of ways. These are the three general categories of state policy support for telemedicine.

Initiating Actions and Program Authorization and Development

As described in Table I-4, the actual initiating actions associated with telemedicine legislation vary somewhat, including both statewide and more limited program development, planning for statewide systems, and validation of an already existing program. Legislative enactments have been responsible for development of statewide networks in Arkansas, Georgia and Texas. Laws in these three states have provided specific and comprehensive program authorization and funding. While legislation in Iowa and New Mexico also began the process of telemedicine development in these states, the focus was on planning rather than actual program authorization. More limited program efforts were begun as a result of legislation (specifically appropriations rather than general authorizing program legislation) in New Mexico (separate from the planning effort), Oregon and Utah. In Kansas, the state legislature did not actually initiate telemedicine development but provided its acknowledgement of an already existing telemedicine program being directed by the university.

On the non-legislative side, telemedicine was a priority issue for a number of governors, who championed initiatives specifically aimed at program development in Louisiana, Oklahoma and Pennsylvania. The governor's initiative in South Dakota was also in support of telemedicine development but its emphasis was on state planning and a study to guide future action, although the first program demonstrations were also made possible through this initiative. In North Carolina, the focus of the governor's initiative was not specifically on telemedicine but the creation of a state information highway, which in fact paved the way for telemedicine. The only initiating action that has occurred outside of the governor's purview is in Colorado, where the public utilities commission (PUC) has recently mandated a fund to create telemedicine and distance learning programs. This is only one of many roles the PUC can play in telemedicine development. Although a PUC judgment led to Georgia's establishment of a telemedicine network, the PUC in Georgia did not actually authorize the network but only facilitated future policymaking.

Funding

State legislatures have funded telemedicine program development occasionally through special authorizing enactments (Arkansas, Georgia, Texas), and more commonly through line item appropriations of more limited scope in omnibus budget bills (Kansas, New Mexico, North Carolina, Oregon, Texas and Utah). Texas, which has provided multiple sources of funding to different programs, is the only state that has funded telemedicine in both ways.

The sources for non-legislative funding have been varied. State government, with the governor's support, has used rural development funds (Louisiana), community development block grants (Oklahoma, South Dakota) and primary care initiative monies (Pennsylvania). Other state dollars for technology development and rural health have provided telemedicine support in North Carolina and Texas, respectively. Other significant sources of funding have been mandated by the public utilities commission (Colorado), or provided through special state agency funding (in Georgia, North Carolina and Texas). In particular, the state prison authority in Texas represents a significant source of funding for telemedicine.

While special authorizing enactments have included the largest funding for telemedicine development, interestingly, non-legislative funding has often surpassed the level of funding provided in line item budget appropriations. More detailed information on state funding sources and levels is included in a later discussion on telemedicine funding and in Table I-8.

Supportive/Facilitating Action

The greatest diversity of support for telemedicine comes in the many ways that states can facilitate and encourage development -- through planning, studies, coordination, administrative support, making state telecommunications networks available for use and developing and designing other networks for telemedicine use, reductions in network and telecommunications costs, provisions for reimbursement, and other regulatory actions. Supporting and facilitating actions have been identified in 14 states; only 2 states with new programs have not specified such actions. Some states, such as Louisiana, South Dakota and Texas, have instituted important legislative and non-legislative mechanisms for facilitating telemedicine development.

Both legislative and non-legislative actions have been instrumental in virtually all of the areas mentioned above. The exception lies in the extensive administrative support and level of in-kind services provided by a number of state agencies in various states.

Other Actions

Included in this category are the two states, California and Wyoming, that have only designated administrative responsibility for telemedicine in legislation, but have not established any other state involvement.

State Policy Actions for Telemedicine: Further Analysis

Tables I-5, I-6 and I-7 provide a further breakdown of the types of state policy actions related to telemedicine development. These tables specify the types of initiating actions (task forces and coordinating bodies, studies and planning efforts) by state, as well as program development initiatives, special funds, other legislative funding, non-legislative funding for overall program development and specific program components, state agency support, infrastructure development (statewide, education and health), telecommunications rulings and regulations, provider licensing regulation, and actions related to reimbursement. Table I-5 identifies the actions based on legislative enactments, while Table I-6 lists state policy support developed outside the legislative arena.

The various state policy roles are summarized for all of the states in Table I-7. As this table indicates, Georgia, South Dakota and Texas have taken the lead in addressing the widest range of policy areas. There have been policy initiatives in eight areas in each of these states. Kansas and Louisiana have focused on five of the areas. As noted, the state of Kansas has not had a central planning role; Louisiana has not yet addressed any infrastructure (reported as adequate in the state, except in last line connections to health care facilities) or telecommunications regulation issues, although this area is at the top of the list of priorities for the new state coordinating council. While North Carolina also has taken action in five areas, its focus has been on planning, infrastructure development and only limited funding, with actual program development largely outside the state government arena. Oregon too appears to have taken multiple actions, but most of these have been very targeted or related to the education network that is used for telemedicine but that now has limited capacity. Iowa's support also can be differentiated from other states because it has largely been focused on building a foundation for telemedicine through infrastructure development and statewide planning.

While the levels of state funding for telemedicine vary greatly (see the discussion in the next section), funding represents the most frequent state role in telemedicine; 13 states have supported telemedicine through state-directed monies. Almost as many states (12) have been involved in planning, study and coordination efforts and in program development; 4 states have added the central role of planning and coordination this year. Substantive state agency support has accompanied other state efforts in eight states. Slightly more states -- nine -- have targeted support for the telecommunications and telemedicine infrastructure; four have or will be developing new networks, four have used education networks to support telemedicine, and six states have made state networks available for telemedicine (2 for demonstrations only, and 1 for specific entities).

The areas of least emphasis in the states are those that have been identified as barriers to future expansion of telemedicine. Only four states have addressed telecommunications regulatory policy. The formal actions taken by South Dakota and Texas are the most significant. Georgia also has achieved important results in telecommunications but through a state negotiated process. Action in Colorado, which is voluntary, is not deemed as significant. Three states have tackled the provider licensure issue, and while their actions may clarify state policy, it is unclear if they will actually facilitate telemedicine development beyond state borders. Few states have addressed the reimbursement issue; the only really significant policymaking is in Louisiana although three other states -- Oregon, South Dakota and West Virginia -- provide Medicaid reimbursement for telemedicine (limited to mental health coverage in Oregon). Iowa has not established a state policy on reimbursement but passed a joint resolution to the U.S. Congress in support of Medicare payment for telemedicine. Clearly, much remains to be done in all of these difficult regulatory areas. Proposed landmark federal telecommunications legislation does include special provisions for rural areas that would facilitate state efforts in telecommunications regulation.

Funding for Telemedicine

A number of telemedicine programs and states have been cautiously watching Congressional budget deliberations which include proposed cuts in continued federal funding for telemedicine efforts. Despite the significant federal presence in support of telemedicine (previously cited as $85 million in fiscal year 1994, with $5.5 million by the Office of Rural Health Policy) and the important role of this "seed money," there are clearly other sources of funding that may sustain telemedicine efforts. Little information has in fact been available on the level of state funding for telemedicine, which is actually quite substantial. Moreover, there is also considerable private investment that is occurring and that promises to expand, at least according to some observers.

Table I-8 identifies the sources and levels of state funding for telemedicine between 1989 and 1995. As this table indicates, the sources of funding are quite varied. The highest levels of funding have emanated from special funds in Georgia and Texas, mostly related to telecommunications judgments, overcharges and special allocations (the new fund in Colorado is significantly smaller although still sizeable). However, substantial although lower funding has been provided through state line item appropriations for specific programs such as in Texas and Oregon, overall program authorizations and funding in Arkansas, and earmarked funding by state agencies such as occurred in Oklahoma.

To date, Georgia has had the highest level of funding for telemedicine: over $12.5 million specifically for telemedicine (including department support) and another more than $42 million for distance learning, some of which will be used for health programming. These figures do not include the costs of support from other state agencies like the Department of Administrative Services and the Medical College of Georgia. With creation of the new fund for telemedicine and distance learning, Texas is certain to surpass the level of funding in Georgia (some portion of at least $75 million may be available yearly for 10 years). Texas has already provided almost $3 million in funds supporting various programs in telemedicine (this does not include FY 1996 funding) plus the costs of the state developing a transport network and prison system support for actual telemedicine consultations. Arkansas is also planning a significant commitment to telemedicine; 1995 legislation provides a maximum of $6,050,000 over the next two years for development of a statewide system. Oklahoma has also made a multi-million dollar commitment to telemedicine -- about $4.3 million of mostly Community Development Block Grant monies and a small amount of state-allocated oil overcharge monies. Oregon has provided about $2.5 million for a specific network. Iowa has also made an enormous investment in a state-owned network that was designed for education but has been made available for telemedicine and health applications as well; the state has spent $140 million on development of the state network, with another $90 million slated.

Despite these large sums, there are many more states with considerably lower identified financial investments in telemedicine. These range from $50,000 in North Carolina to more than $150,000 in Kansas (another similar appropriation may have been made but could not be substantiated). Recent limited program funding in New Mexico and Utah has been for less than $300,000, and Louisiana and South Dakota have had specific expenditures of $500,000 or more.

Other sources of funding also exist, as indicated on Table I-8. While not aimed at program development, reimbursement for telemedicine is available in a few states. Four states provide Medicaid reimbursement, and other insurance coverage is available in two states (Blue Cross/Blue Shield for two, a third is under discussion, and Medicare for Georgia only). State prison systems are providing some additional support, significant in Texas but much more limited in Georgia, Louisiana and North Carolina. Blue Shield has also provided a research grant for a pilot in Pennsylvania.

Telemedicine as a Public/Private Partnership

As the preceding funding discussion demonstrates, telemedicine development has occurred as a result of sometimes substantial and always important state funding, but federal support has also played a role, as have private funds and resources. While this paper focuses on state initiatives to promote telemedicine, these initiatives rely on much broader support, including by private hospitals, universities and private telecommunications companies. Although only a few states have established formal public/private partnerships to promote telemedicine and broader telecommunications efforts, it is very clear that telemedicine development in all states depends on partnerships between the public and private sectors. The interrelated activities of states, the federal government and the private sector are summarized in Table I-9. The descriptions of the multiple and complementary sources of funding and broad types of involvement not only attest to the value of combined federal, state and private support, but also reveal a growing foundation to sustain future activities in telemedicine.

The Impacts of Telemedicine on Access to Health Care and Primary Care

In Texas, you hear the story about the river guide and flute player who almost lost his finger because of a rattlesnake bite, but a telemedicine consultation for this patient who was unable to afford a trip to a referral hospital saved his finger and his musical career. There are other similar stories in Texas attesting to the benefits of telemedicine, including how a recent continuing education program enabled an accurate diagnosis and treatment of a patient that would have been unlikely without this program. Texas has also done a cost analysis of telemedicine consultations for a very limited number of patients that has shown telemedicine to be cost-effective. In Kansas, there have also been cost analyses on a few patients and telemedicine has come out like a winner. Telemedicine also has been credited with reducing the number of fly-in consultations in Kansas (the previous method of outreach). In Louisiana, patients reportedly "love telemedicine," which can save many a four-hour trip. Georgia has determined, in an analysis early in the program's development, that telemedicine enables around 80 percent of patients to be treated in rural areas instead of being transferred or referred to larger health care facilities in other areas. A South Dakota doctor also emphasizes the real potential of telemedicine with regard to education. Telemedicine can enable small remote communities to maintain their ambulance services by providing required continuing education for ongoing certification of emergency medical technicians who donate their services and don't have the time to travel to a continuing education program. Telemedicine is also reportedly a "tremendous education tool" for physician extenders.

Unfortunately, while such stories are impressive, they don't qualify as sound, quantifiable evidence of the benefits or effectiveness of telemedicine. And unfortunately, there is not a great deal more objective data to justify the considerable support for telemedicine and confidence in its potential to improve access to care and the quality of care, as well as possibly contain costs. One reason given for the lack of data is that telemedicine programs are still relatively new and in the early stages of implementation. One state official commented that it is still premature to look at impacts because there is not enough experience, partially due to lack of reimbursement, and telemedicine is still an "experimental or pilot" program. Clearly, telemedicine, because of its very nature, is highly subject to change and it is difficult to identify and measure the effects and effectiveness of a highly variable, not easily quantifiable service.

Nonetheless, despite the "paucity of research on effectiveness," and the "little data on the costs and cost-effectiveness of telemedicine systems," "sufficient evidence exists to suggest that the use of telecommunications technology for most routine clinical consultation purposes is acceptable." The Working Conference on Telemedicine Policy for the NII confirms this judgment as well as the opinions of many that this research must now be conducted:

"The potential for telemedicine to improve health care delivery and education for remote populations and providers alike is substantial. And, there is sufficient early scientific and anecdotal evidence to warrant optimism. However, the true merits, limitations, costs and benefits of telemedicine have yet to be empirically demonstrated. It is imperative that these be documented before telemedicine can be confidently and appropriately funded into the mainstream of clinical health practice and education."

Researchers and health policy analysts have identified the parameters necessary to evaluate telemedicine through empirical studies. Various federal evaluations have already been initiated that are designed to provide data documenting telemedicine's impacts and effectiveness. (Their continuation, however, may be affected by proposed budget cuts.)

Telemedicine programs are also beginning to collect data and develop evaluations that can provide needed information to determine the costs and impacts of these programs. Telemedicine programs supported by state initiatives are summarized on Table I-10. The more long-standing, well-developed programs are already collecting data on utilization and a number of these programs are instituting more comprehensive data management systems and evaluation protocols as they move beyond the development and early implementation phases. These efforts are briefly summarized on Table I-10, as are existing utilization figures. More detailed information is available in the state profiles in Volume II. Whether these ongoing and planned efforts will provide the information needed to evaluate telemedicine remains to be seen, since there is no common research strategy being employed. However, several of the programs include carefully orchestrated research protocols. Moreover, most telemedicine programs incorporate university medical centers in their networks and consequently have ready access to research expertise that should facilitate development of a sound data base and evaluation. Some programs, such as Kansas, have already conducted limited research on specific applications of telemedicine. In addition, a number of programs are expanding, as noted in Table I-10, and utilization is increasing, thereby providing a larger data base for analysis. One of the most notable is the prison telemedicine program being directed by the University of Texas Medical Branch at Galveston, which has already served 1,200 patients in 7 months and is amassing data for in-depth evaluations.

While utilization is increasing, particularly in Texas and Georgia, with Kansas also expanding slowly, rural providers have still not flocked to telemedicine for consultations (utilization of the networks for education has been more popular and extensive). The impact of telemedicine programs on rural health care and primary care is difficult to determine at this time (the implications of the more successful continuing education and growing number of other distance learning programs on retention of providers are also not known). Some physicians are reported to be totally enamored and committed to using telemedicine consultations, while others are more skeptical. As one state official put it, physicians "love it, hate it, won't use it, or use it only sporadically." A number of factors are cited as responsible for this: concerns about the quality of care because of the absence of face-to-face contact and "tactile diagnostic information," and fear of missing subtle findings; fear of loss of control of patient care to urban or referral physicians, and concerns about the loss of professional autonomy, credibility and referral relationships; a reluctance or difficulty in changing practice styles; convenience and the time commitment required in light of already overworked schedules; and payment for services. Experience and familiarity may counter a number of these reservations, except for reimbursement. Telemedicine programs are attempting to address many of these issues in order to increase utilization and not only make telemedicine a more viable cost-effective service, but also to increase its potential to enhance the quality of, and access to, care in rural areas. However, the real potential of telemedicine to support primary care providers, expand health care services, and improve the access to and quality of health care in underserved areas is still to be determined.

Lessons Learned

Through interviews with state officials and individuals in telemedicine programs, a wide array of lessons related to planning, program development, implementation and related areas were identified. A number of these were reiterated in virtually all of the states with active programs, such as the critical importance of conducting a comprehensive needs assessment to determine the type of telemedicine system and technology for development, and the applications. These various "lessons", as identified by individuals in state and program telemedicine development are categorized below.

Planning

· It is important to "define your terms well" (for telemedicine) since everyone has "different ideas of what telemedicine is." There is "constant battling over terminology," complicated further by the influx and outflux of different players in the process. Therefore, it is essential to reach agreement on terminology and document this.

· "Need, need, need." Telemedicine must have a needs driven approach. It must not be technology driven. Technology must be evaluated to determine how it can serve unmet needs. The needs for telemedicine must be clearly defined on a statewide basis prior to development of a system in order to match the technology to needs. This must be done for all of the applications -- clinical (a difficult process), education and administrative. The needs assessment must be solid and complete and requires educating physicians, who are not familiar with telemedicine, in order to help them determine how this technology can be useful to them. The needs assessment should also lay the groundwork for future evaluation of how well the technology meets the identified needs. This evaluation, including a demonstration process, should be completed before expansion of the telemedicine system.

· Involve all players in the planning and coordination process. Identify benefits to the stakeholders and involve them early on in the planning and development process. The system cannot be designed without physicians. The process must involve all health personnel, early on. Moreover, the mechanism for soliciting physician input must be more than procedural; rural providers must be part of the policy development process and their needs must be clearly defined. According to one provider, too often vendors, referral centers and politicians direct the path for telemedicine. "If telemedicine is going to work, then it must address the needs of front line users." Programs must be clinician driven.

· Development of telemedicine systems must take into account the referral patterns of rural primary care providers. A telemedicine network cannot be used to create referral patterns. Not only must the interests of providers in remote areas in telemedicine be determined, but systems must be selected that provide local providers with choices of referrals. This means that mutually compatible systems must be designed that provide maximum flexibility to providers for communication with the broadest array of health care facilities necessary. For example, a provider may have three different referral systems for different consultation areas. The system design must accommodate all of these needs.

· Establish firm goals and objectives.

· Be very clear to whom the telemedicine service is being directed, what service will be provided, and what physicians will be providing service.

Program Implementation

· Start small, and with a well established referral relationship.

· Expand gradually; test, train and implement; do lots of training for presenters and consultants.

· Resource requirements for planning and development are extensive. Personnel and administrative needs and costs must be accounted for in addition the costs to equipment and network. This is both at the state level and at the program or network sites.

· Strong community support is a key to successful program implementation.

· Another asset is having a rural provider as advocate and partner ("not a specialist identified with the medical center") who can "sell the concept to other physicians."

· It takes time to work out power struggles, to build a system, and identify the specifics of the network. It is important not to succumb to political pressures to put a program into place quickly. Time must be allocated for prototype development, an implementation test, and modification if needed before any system expansion is implemented. It is also an evolutionary process to build support and experience. Time is also essential to dispel the myths and preconceived notions of physicians about telemedicine.

· It is important to have extremely explicit contracts with external organizations that provide for reassessment and change of technology and system redesign if needed.

· Management and administrative issues must be carefully thought through prior to implementation.

· It is important to have someone running and coordinating the program. In addition, it is essential to have a coordinator at each site to manage the program and address utilization and other issues. A site coordinator can locate physicians with patients who can benefit from telemedicine.

· Considerable effort is needed to make telemedicine go from an idea to operation. It is essential to establish procedures and protocols, a process that took 11 months in one state. For example, who decides which site gets time on the system? Standardized procedures and protocols are key to managing diverse entities in a statewide network. Minimum standards are also needed for each site.

Technology

· It is easy to "get caught up in gadgetry." It's important to determine what is really needed and what's practical.

· There is a tendency to jump into the most complex technology rather than doing what's basic. Simple technology, using phones rather than video images, may work as well. Better information is needed about the information services that are accessible by phone (NCI Cancer Facts, CDC).

· It is important to look at the benefits of higher level technology (interactive video and teleradiology) versus more basic, affordable technology (E-mail, computers, Picasso phone system, phone referral, Grateful Med, bulletin board and other similar resources for peer interaction with rural providers). A "row of technology" should be examined side by side: PC, fax, on-line, data keeping, real time camera. Different technologies should also be evaluated at different sites.

· If only high end technology is used, it can be difficult to justify the value of system. If there is a wide variety of technology, a better system of utilization can be developed as well as a better system for entities to buy into.

· "Don't oversell the technology." Use a phone or fax if they meet the needs. One advocate of the less-expensive-technology-is-better-thinking says, "if it doesn't move, it can be done by store and forward."

· Some skeptics think that technology may not really address the biggest barriers to access in rural areas, nor the barriers to rural providers obtaining consultations (time, logistical and scheduling problems, turf issues, insecurities, disruption of existing referral patterns, reimbursement, not using the linkages that exist). Moreover, technology may not help busy rural practices which don't have time to deal with the complex and time consuming patients who are more likely to be transferred.

· Don't accept the "hype" about technology that is vendor driven. Programs must do solid research on their own.

· Many think the technology is very useful and effective for all types of education and distance learning and for data base access.

Integration of Technical and Clinical Expertise

· On an operational basis, it is important to integrate clinical and technical expertise in administration of a telemedicine system and ensure that technology meets the clinical needs of providers (easy to use, etc).

· It is important in the stage of assessing technology to have not only lay people involved (who know the technology) but also people familiar with the medical applications. Also, vendors must clearly understand how the technology is to be used. There can be difficulties bringing together the two cultures of health care professionals and technology professionals.

· It is important to have a biomedical engineer in the lead agency or health care institution, who is responsible for putting all the technical pieces in the bid, and for system design if not commercially available. An independent expert (not the vendor or network integrator) with both technical and clinical knowledge and expertise) is invaluable. This individual can also develop clinical standards. A consultant can also be used, but the choice of the right persons is critical.

Marketing/Creating Incentives for Use

· Mechanisms must be established to sustain physician involvement in the community. Physicians may be attracted by the "early glitz," but real benefits are needed to sustain use.

· Physicians need to be oriented to the system. Efforts must be directed to helping them understand how the system can help their practice, not hinder it.

· The key issues are make it easy to use and inexpensive to operate and provide incentives for use (including reimbursement). Then it can grow and flourish.

· Education is essential: open houses for both medical staff and communities. These efforts build enthusiasm and enable medical staff to see to see the system. Continuing information, such as through newsletters, is also needed.

· Services need to be marketed to providers and patients. A telemedicine marketing task force is one option. Direct marketing is needed. Referral hospital clinic patients should be identified from the remote or rural areas, contacted by letter, and informed about the telemedicine option instead of travel.

Utilization

· It takes time to build utilization.

· Programs must develop mechanisms for building regular, dependable utilization. One solution is to establish regularly scheduled clinics. Education programs also serve as a good utilization base, as do contracts that specify regular use (such as prisons).

· Physicians must buy into telemedicine. Those who are most resistant are the people who haven't used the system. One approach to achieving this buy-in is to find an application that is perceived as useful and appropriate, and then to build on this experience to expand utilization to other applications.

· Identify patients who travel to referral hospitals. Then clinics can be organized to see several patients at a time instead of requiring them to travel individually.

Network

· Economies of scale are needed to achieve viability. Programs need to partner and establish a community-based network.

· There is concern that telecommunications systems can never be cost justified in rural areas unless the system is extended to other applications and used for distance learning (health related or not).

· It is important for rural states to form partnerships for telemedicine (like trauma care for multiple states, e.g., Kansas, Oklahoma, Texas, Colorado, New Mexico). Important issues regarding telemedicine across state lines must be addressed, such as reimbursement. Some of the issues involved in regional trauma care parallel telemedicine.

· Eventually the system can be "rented out to other groups," with expanded programming for the community. Then it can be self-sustaining.

· Telemedicine has greater potential as part of a statewide plan for an information highway. When there is greater overall use of bandwidth, the economies of scale that result allow greater cost sharing, thereby reducing the costs of telemedicine and making access more affordable for local communities. Economic viability is dependent on a broader base, although availability and scheduling may then become issues depending on the capacity of the system.

· Telemedicine and distance learning networks, when separate, must be interconnected. If one network serves both, there may be potential competition for use. Scheduling then becomes very important (schedule education during the evening and at lunch); priorities must be established. Courses can be put on tape and used when there is availability on the system.

Problems

· There are problems with a top-down planning approach, and some states have gone this route despite appearances to the contrary.

· Projection dates for implementation are often not realistic, and as a result, implementation is slower than expected. There are problems with equipment, changes in equipment, T1 lines not ready, and the state not ready.

· Problems occur when state agencies don't have to capabilities or understanding to take on certain program responsibilities. The state agency responsible for the acquisition process for all state-related agencies did not have an acquisition process in place that could address the complexities of telemedicine (multiple vendors, many different components). The state has been unable to process an acquisition contract and has yet to make an award.

· One of the barriers is use of the system can be inconvenient. For example, specialists at a children's hospital in one state must travel to university hospital to do consultations. The technology needs to be brought to the physicians to make it more convenient. The most difficult barrier is getting physicians to change how they schedule their time and go through the day.

· Programs have addressed the scheduling problem. Rural doctors may do telemedicine consultations when they make rounds (if they need CME credits), or they may hire a physician extender or nurse to present the patient, or use the patient coordinator at the site. Flexible technology may also address scheduling problems. For example, in one program an urgent consultation was needed from a rural area but the consultant was unavailable because he was in clinic. The referral was put on videotape and then taken to the consultant in the clinic, who took 5 minutes to look at the tape on his equipment located in the clinic. Then he called the physician in the rural area. In this case, there was no need to disrupt his schedule and go to the telemedicine room.

· In at least one state, it is a somewhat difficult, time-consuming process to get continuing education credits approved for education programs (it takes 6 weeks).

· Different program objectives may not be compatible, particularly research and program operations. This may impose different goals for the university medical center and rural hospitals. As one official put it, "be careful of a research driven project." The objectives of federal demonstrations may also be incompatible with the objectives of rural hospitals and providers.

· It is difficult to create truly collaborative relationship among rural, regional and university hospitals.

· Where educational networks are used for telemedicine, programs may be more cost-effective (because of shared costs, reduced charges, special pricing structures); however, there are problems with the availability of the network and scheduling of programs since first priority for these networks goes to regular education.

· While consultants may be helpful in program development, some programs and states have experienced conflicts between the goals and recommendations of the consultants and the interests and goals of individual sites. One state said, "choose a consultant very wisely."

Table I-1

TIME LINE FOR STATE INITIATIVES IN TELEMEDICINE

1989-1995

	1989-1992	1993	1994	1995
AR				Establishment of legislative committee and governor's advisory body to oversee statewide network, call for strategic plan, fund and other appropriations to develop statewide network.
CA			Designated state agency responsible for telemedicine, possible use in rural areas.
CO		Legislature established telecommunications advisory commission (sunset 7/95).		Regulatory action -- PUC mandated fund for grants program for telemedicine and distance learning. Not implemented yet but board will oversee. Legislation allowing more flexible tariffing.
GA	1991 - Pilot at Medical College of Georgia. 1992 - Legislation for statewide program & funding.	Limited implementation by end of year - 7 sites.	Ongoing planning & implementation.	Full implementation planned with 59 sites. Additional fund monies available for telemedicine & distance learning.
IA	1989 - Legislation creating state-owned fiber optic network for education.		Legislation established access of network for health care entities. Study report on issues, consensus building & enhanced awareness in 11/94. No comprehensive plan for statewide network.	Program development in 1994-95 all federally funded. Legislative resolution to U.S. Congress requesting Medicare reimbursement for telemedicine.
KS	1990 - State network upgrade. 1990-1992 - Pilot at University of Kansas Medical Center (KUMC).	Legislation validating KUMC telemedicine program. KUMC continues expansion.	Some state funding. Network largely self-sustaining. New provider regulation applicable to telemedicine.	Limited state funding. Continued expansion. Reorganization of program at KUMC.
LA	1992 - Governor's office begins efforts.	Planning and design of state telemedicine initiatives.	State funding. TELEMED implemented, and federal grant obtained by rural site to help support project.	Expansion of TELEMED sites but change in focus and some reorganization. Other program expansion, with some state funds (prison) and other sources of funding also. Expanded involvement of legislature, creating state coordinating council and requiring physician reimbursement for telemedicine.
NM			Legislation establishing distance learning project, separate authorization for study on telemedicine.	Study completed. Legislative funding of telemedicine demonstration (to be implemented soon), application for federal grant.
NC	1989 - NCREN education network.		Creation by governor of public/private health alliance. State government assumes planning, oversight role. Limited prison telemedicine program.	New federal (NTIA) project has small state funding. Number of ongoing federal and university programs continue, as well as prison program.
OK		Community Development Block Grant (CDBG) used to fund OK Telemedicine Network, oil overcharge monies for other projects. Other private and federal program development.	Ongoing development of networks.	Ongoing development of networks. Program to begin operation in 9/95.
OR	1989 - Creation of ED-NET. 1991- Appropriation to Biomedical Information Communications Center (BICC) for network.	Appropriation for 93-95 biennium to BICC for network.		Establishment of state telecommunications council and executive department position. Additional funding for BICC for network.
PA		Governor announces PA HealthNet - pilot project.	2 of 3 components operational.	Teleradiology pilot becomes operational.
SD		Governor's initiative and task force, study and planning begin.	Demonstrations begin.	Study report. Federal grant for expanded program. Legislation to reduce telecommunications costs. Legislation related to provider licensure for telemedicine consultations and supervision of mid-level practitioners by telecommunications.
TX	1989 - Texas Tech University Health Sciences Center (TTUHSC) begins program with federal and state dollars.	South Texas AHEC gets 2-year funding for distance learning programs from state.	Texas Tech UHSC's HealthNet & Rural Health Satellite Network begin major expansion with Center for Rural Health funds. Consortium of universities to develop programming for distance learning. Major prison telemedicine program begins, to be statewide.	South Texas AHEC operational 2/95. Special state transport network for HSCs & rural sites becoming operational. Public Utilities Regulatory Act will make major funding available for statewide telemedicine and education networks. Physician licensure law related to telemedicine.
UT				Funding for program development. Not implemented yet. Other supportive legislation (education network and technology initiative project office).
VA				Resolution calling for study by 1996.
WV				Medicaid reimbursement established for telemedicine (federal project).
WY			Legislation provides the Office of Rural Health with responsibility for telemedicine development (no funding).

SOURCE: Intergovernmental Health Policy Project, The George Washington University, June 1995.

Table I-2

TELEMEDICINE INITIATIVES LINKED TO OVERALL STATE POLICY

STATE	STATE POLICY
Arkansas	For economic development. Also to strengthen the information infrastructure, and enhance educational opportunities and the delivery of health care and medical information in rural and urban areas.
California	Identified as a potential component of a strategic plan for health care reform in rural areas.
Colorado	No state policy yet. Fund created by Public Utilities Commission because of US West failure to meet certain basic service requirements in rural areas.
Georgia	Stimulated by Public Service Commission action. Not part of larger state policy directive. Focus to improve access to quality health care.
Iowa	Initial network developed to expand educational opportunities and economic development throughout state. Focus on telemedicine and health applications part of major state health care reform initiative. Complements development of statewide management information system.
Kansas	Outgrowth of state experience with EACH/RPCH hospitals and university outreach programs. To address problems of rural access. Recently in support of legislatively-directed expansion of primary care and outreach.
Louisiana	Vision to use telemedicine and telecommunications to promote economic development in rural areas, also to improve the health care system.
New Mexico	To address the health care needs of rural areas. Use of telemedicine part of vision of rural health model.
North Carolina	Part of development of information highway linked to state's future economic growth. Also a component of comprehensive application of information technology to health care delivery, which is major focus of state health care reform.
Oklahoma	For economic development.
Oregon	None specified. Part of university's outreach efforts. Statewide telecommunications policy goals to be examined.
Pennsylvania	Part of health care reform, primary care initiative.
South Dakota	Part of health care reform, particularly related to developing a comprehensive state health care data system and information network to support integrated health services.
Texas	To improve rural access to health care. Also to foster equity in telecommunications in the state, and build a statewide telecommunications network for telemedicine and education.
Utah	Telecommunications one of five areas identified as key to the future of government and state development. Part of larger focus on development of a health information network.
Virginia	To evaluate its potential to improve access to health care.
West Virginia	None.
Wyoming	Development under the Office or Rural Health but no state policy.

SOURCE: Intergovernmental Health Policy Project, The George Washington University, June 1995.

Table I-3

STATE ACTION RELATED TO TELEMEDICINE

1989-1995

Initiating Action or Program

Authorization

L, NL

Funding

L, NL

Supportive/

Facilitating

L, NL

Other

NOTES:

L based on legislation

NL non-legislative action.

* State program development initiated as a result of a legislative appropriation only, not general authorizing legislation calling for a study or program development.

SOURCE: Intergovernmental Health Policy Project, The George Washington University, June 1995.

Table I-4

DESCRIPTION OF SUBSTANTIVE STATE ACTIONS SUPPORTING TELEMEDICINE

1989-1995

	LEGISLATION	NON-LEGISLATIVE
INITIATING ACTION OR PROGRAM AUTHORIZATION	Arkansas -- Creation of coordinating legislative and governor's advisory bodies to plan and oversee development of a statewide telemedicine and distance learning network (new). Georgia -- Development of statewide telemedicine network and funding, board to oversee, and participation/direction by Department of Administrative Services. Iowa -- Telemedicine advisory committee and telecommunications commission charged with developing recommendations for a statewide network. Kansas -- Authorization and validation of operational program at University of Kansas Medical Center (KUMC). New Mexico -- Study and project authorization and funding (2 separate programs). Oregon -- Initiation of medical information services, education and telemedicine network through the Biomedical Information Communications Center.¹ Texas -- Development of statewide telecommunications network and funding through public utilities legislation, board to direct (new). Utah -- Program development, demonstration (governor's request).	Colorado -- PUC² creates advisory board to oversee fund for telemedicine and distance learning (new). Iowa -- Governor's appointment of telemedicine advisory council and study. Louisiana -- Governor's initiative through Office of Rural Development, project development. North Carolina -- Governor's initiative related to information highway and health care applications, executive order creating public/private health care information alliance. Oklahoma -- Governor's initiative and conference on telecommunications, development of telemedicine network. Pennsylvania -- Governor's initiative, pilot projects. South Dakota -- Governor's initiative, executive order creating task force and mandating study, funding of demonstrations.
FUNDING³	Arkansas -- Special fund for statewide telemedicine and distance learning network development, and other related funding. Georgia -- Special fund for statewide network and program development (from telecommunications overcharges). Kansas -- For KUMC telemedicine program and statewide expansion. New Mexico -- For distance education program (pilot) and telemedicine project. North Carolina -- For special funding for technology infrastructure, particularly defense, not targeted to telemedicine and distance learning. Oregon -- To Biomedical Information Communications Center at Oregon Health Sciences University for network. Texas -- For new special fund (from telecommunications companies). Other funding to Texas Tech University Health Sciences Center and the South Texas AHEC at University of Texas Health Sciences Center at San Antonio. Utah -- To University of Utah Health Sciences Center for telemedicine project.	Colorado -- Public Utilities Commission ruling establishing fund for telemedicine and distance learning (new). Georgia -- Funding by Department of Corrections for inclusion of prisons in telemedicine network; funding by Department of Human Resources for specified uses. Louisiana -- Rural Development Funds used for telemedicine, Louisiana Health Care Authority research fund for consultation reimbursement, and state corrections department funding for telemedicine program at one prison (new). North Carolina -- Designation of state dollars for one telemedicine project, Division of Corrections contract for telemedicine for one prison. Oklahoma -- Community Development Block Grant (CDBG) funds for telemedicine network development, and oil overcharge monies for other programs. Pennsylvania -- Primary care initiative funds for pilot projects. South Dakota -- CDBG funds for demonstration projects. Texas -- Criminal justice department funding of telemedicine program (to be statewide), Center for Rural Initiatives funding.
SUPPORTIVE/ FACILITATING	Colorado -- Telecommunications advisory commission establis

SUMMARY AND ANALYSIS OF STATE INITIATIVES TO PROMOTE TELEMEDICINE

Volume I

Tim Henderson

National Conference of State Legislatures

TABLE OF CONTENTS

INTRODUCTION

Background

Defining Telemedicine

THE STUDY

The Purpose of the Study

Study Approach

Organization of the Report

SUMMARY OF FINDINGS

Overview of State Actions

State Policymaking For Telemedicine: Goals

State Policymaking For Telemedicine: Classification of Policy Actions

State Policy Actions for Telemedicine: Further Analysis

Funding for Telemedicine

Telemedicine as a Public/Private Partnership

The Impacts of Telemedicine on Access to Health Care and Primary Care

Lessons Learned

THE FUTURE OF TELEMEDICINE AND THE STATE ROLE

INTRODUCTION

Background

Defining Telemedicine

THE STUDY

The Purpose of the Study

Study Approach

Organization of the Report

SUMMARY OF FINDINGS

Overview of State Actions

State Policymaking For Telemedicine: Goals

State Policymaking For Telemedicine: Classification of Policy Actions

State Policy Actions for Telemedicine: Further Analysis

Funding for Telemedicine

Telemedicine as a Public/Private Partnership

The Impacts of Telemedicine on Access to Health Care and Primary Care

Lessons Learned