Economic Model of Organizational Architecture for Urban Telemedicine Network

1. Economic Model of Organizational Architecture* to Guide Design and Performance Evaluation in an Urban, Primary Care Telemedicine Network Kenneth M. McConnochie, MD, MPH * Brickley J, Smith C, Zimmerman J. The economics of organizational architecture. J Applied Corp Finance 1995;20:19-31

2. What makes this an economic model? • Essence of economics – • theory of values • how individuals make choices

3. What’s this got to do with HIT? Primary challenge = organizational innovation Adopting and integrating new technology requires change in individual and organizational roles and responsibilities

4. What’s this got to do with evaluation? Evaluation - an essential component of innovation strategy Primary objective - to demonstrate use of model to guide evaluation strategy

5. Health-e-Access: Health, Healthcare and Social Problems Addressed • Marked socioeconomic disparities in childhood morbidity burden. • More than half of US pre-school children spend time in child care.   • Rates of common acute illness are increased in child care.   • Illness in childcare accounts for 40% of work absence for parents using child care.   • 20% - 70% of pediatric visits to the emergency department are for non-urgent problems.

6. … about a long-running nose 1 week later Short Story

7. Organizational Problem • Usual Healthcare • Every child has a primary care “medical home” • Physician(s) controls the organization directly • versus • Health-e-Access • Many childcare sites • Many different primary care offices • No telemedicine utility service (yet)

8. Conceptual framework – the 3-legged stool (1) Incentives (2) Decision rights (3) Performance evaluation

9. Health-e-Access Stakeholders • Parent and Child • Private Insurance Organizations • State and County Government, Medicaid • Industry • Primary Care Physicians • Childcare Programs

10. Stakeholders and their Decision Rights • Parent • Use of telemedicine services vs. traditional alternatives • Choice of insurance company and plan • Industry • Payment for telehealth services, if self-insured • Qualify/cover telehealth services in dependent care or healthcare components of Flexible Spending Accounts • Negotiate health insurance premiums, covered services • Change health insurance company

11. Decision Rights - continued • Health Insurance organizations - Private • Coverage of telemed services (yes/no) • Type of coverage (e.g., fee-for-service, capitated) • Reimbursement rates for telemed services • Sponsorship of telemed • Health Insurance organizations, Public; County & State Government • Licensing new types of healthcare workers • Administrative approval of reimbursement for new services (i.e., Medicaid Managed Care) • Support adoption of telehealth services (vs. ignore potential) • Legislation that requires insurance reimbursement for telehealth • Primary Care Physician • Provide/refuse telehealth services • Promote/obstruct adoption of telehealth services, e.g., through participation on insurance organization committees that recommend coverage of new services

12. Dominant Stakeholders • Health Insurance Organizations • Physicians

13. Stakeholders and their Incentives • Parent and child • Improve child health and development • Increase sense of security • Increase access to healthcare • Minimize symptom severity and duration in child • Minimize disruption to usual activities/responsibilities family from child illness • Minimize out-of-pocket costs to family • Improve financial status through steady employment and advancement • Maintain a “medical home”

14. Incentives - continued • Industry • Minimize work absence • Maximize employee productivity - “presenteeism” • Reduce healthcare costs

15. Absence due to illness • Perceived benefits • Parent satisfaction • Childcare program support Stakeholders and Performance Evaluation Parents, Childcare Programs, Industry

16. Days Absent Due to Illness* Before After Jan July Dec * Mean days absent per week per 100 registered child-days. Absence Due to Illness Before and After Health-e-Access Net impact : 63% reduction (Pediatrics May 2005)

17. Parent Satisfaction Based on interviews with parent after first use of telemedicine. N = 229. ED After hours % of families Primary Care Physician Yes Yes Allowed to stay at work* Saved parent trip to: Would choose child care with telemed over one without * Estimated time saved = 4.5 hours (SD 2.2) per telemed visit

18. Utilization – Preliminary Data

19. Utilization Predicted by Telemed:Bivariate Analysis

20. Utilization of Any Site for Illness: Other Determinants • Sex • Insurance type • Child care site • Primary care practice • Child’s age

21. Logistic Regression: Telemed Effects on Utilization

22. Expanded Program • 22 child sites, 8500 total children eligible • 7 current city child care programs • 5 city elementary schools • 5 suburban elementary schools • 5 suburban child care programs (SE suburbs) • 5 urban practices • 6 suburban practices (SE suburbs) • Insurance reimbursement for demonstration project telehealth visits