Telemedicine: An Inquiry in the Economic and Social Dynamics of Communications Technologies in the Medical Field

The health care industry in the United States has been experiencing substantial and ever increasing cost pressures. At the same time, many forces are revolutionizing the way health care is financed and delivered. Telemedicine, in this respect, offers significant potential for addressing some of the challenges faced by the health care industry. However, despite the fact that Telemedicine technology has existed since the 1920s, the use of Telemedicine has not been widespread. The use of the diffusion of innovation theory as an organizing framework, coupled with results of a survey of telemedicine professionals at the Global Telemedicine 2000 Conference in Chicago in 1996, identifies telemedicine’s potential as well as the barriers that are impeding its wide-spread application. In general, Telemedicine’s ability to provide greater and more extensive health-care at lower costs is being hampered by social constraints in society, including i) low compatibility with existing medical practices; ii), complexity of telemedicine equipment and interfaces; iii) absence of reimbursement by third party agencies; and incompatibility of state laws regarding Telemedicine and licensure issues. A case study of the USC-ABC Telemedicine project further to elucidates how attention to some of these factors can promote the success of any Telemedicine project. Two key lessons in this case are (i) The importance of the efforts and vision of a single individual and (ii) need for suppliers to be acquainted with the needs and demands of Telemedicine users. In many test-bed projects, Telemedicine has proven to be a reliable approach to some of the problems in the health care industry and shows promise for achieving greater medical coverage for the American population. However, a more extensive use of Telemedicine would only attain if five conditions prevail, namely; i) a change in medical culture and attitude; ii) changes in model of health care delivery as the current methods of funding requirements from state and federal sources restrict commercial opportunities for equipment leasing and data storage; iii) cooperation and coordination between corporations, government bodies and health care providers; iv) definitive analyses of the costs and benefits, both economic and social, of Telemedicine; and v) identification of the commercial and business opportunities that will be generated with the widespread use of Telemedicine. In the final analysis, the increasing and accelerating costs of health care, coupled with the aging of the U.S. population are factors favoring increased the adoption of Telemedicine. This report identifies some of the barriers that can be addressed by policy-makers, broadband equipment manufacturers and service providers, and key players in the health care industry, to exploit the opportunities presented by these changes.