eHealth reimbursement models Why?

Updated April 30, 2015               Svenska versionen

This is part 1 of 2 in a series of articles about the need for new ways to pay for eHealth.

What is a reimbursement model?

A reimbursement model for eHealth services describes the value created by the service and how the suppliers and the healthcare clinics that are using it for their patients are to be compensated: who shall pay, how the reimbursement shall be calculated and what parties shall get the money.
The reimbursement can be flexible (pay per user or per use of the service) or fixed (a fixed sum per month).

In most countries there are discussions about healthcare reimbursement models and eHealth services, discussions that have delayed the introduction of useful eHealth services for years.

But there are at least three levels of ehealth services that are possible to offer now:

  1. Simple and time-saving digital tools for communication between healthcare professionals and patients, such as email, chat and online video meetings.
  2. Mobile apps and internet services for patients and citizens as well as healthcare professionals that can be used within the current healthcare system. Such as online video consultations, apps for cognitive behavioural therapy, decision support systems for patients and doctors.
  3. Tools for patients with chronic diseases that enable them to stay in their homes and manage a large part of their own care, assisted by remote monitoring of critical parameters by the health services. The patient registers different vitals daily with medical devices that automatically transfer the data and send an alert if something needs intervention.
    Using an iPad or similar tablet, the patient can at any time get a personal video meeting with a nurse or doctor. This is very appreciated by the patients in the Netherlands and other countries where it is already widely used, there it also leads to immense cost savings due to the reduced need for hospitalizations.

There is also a global trend to change the existing fee-for-service model to a more value based model, which means paying for achieved health instead of per visit, procedure or medication. This has to take long time to develop, as it is a controversial model that changes the entire healthcare system.  But eHealth services will play an important role also here, since they are cost efficient and make it easier to follow up healthcare results.

Here is an article about president Obama’s proposal for a new reimbursment model for US doctors.

What are the obstacles?

The two major obstacles for the development and broad use of eHealth services are the lack of reimbursement models and the complexity of the health service systems. Current models are often not possible to apply on eHealth services. There is also a lack of reimbursement models for new types of health services that can only be performed by eHealth tools and for

For example, in most cases there is no way of compensating for when a doctor reduces the need for physical visits by using online video meetings instead of physical meetings, or when a patient is using a mobile app and sensors in her home to manage her own health status and report it to the health services when needed.

Who should be reimbursed?

  1. The supplier must be able to finance the development, operation and support. The supplier can be an organisation within the national health service, a private eHealth company, or a non-profit organisation such as a patient community.
  2. A healthcare clinic that is using the eHealth service as a complement to their traditional services must also get reimbursement from this. Today, many clinics are relying on reimbursement for routine visits, so the loss of income when the patients show up more seldom should be compensated.
  3. Specialists providing telemedicine (working with patients via video link) must be reimbursed, for example dermatologists that examine pictures of possible skin moles and other specialists that are following up medical data from the patients.

Who will create the new eHealth services?

There is a huge need for many types of new eHealth services and the global development pace is accelerating, both for services that are used in the national health service and for digital tools that the patients are using for self care.

It is important the national health services are actively engaged in both the development and the quality assurance in this development. Many eHealth solutions are already developed within the healthcare systems, but it is not likely that they will be able to develop and operate all of the new eHealth services that are needed. Applications for internal use, patient information services and for example services for patients with rare diseases could well be developed by the health services.

But a large part of broad eHealth applications are developed faster and more cost-efficiently by external producers that can spread their development costs and operation on larger user groups, nationally or internationally.
Such producers could be private companies in eHealth, medical technology or pharmaceuticals, but also patient communities, industrial organisations and non-profits.

How will the new reimbursement models be developed?

There are lots of eHealth pilot projects in operation in many countries, most of them are financed by public grants and developed by academic institutions. Many of these pilots have created useful applications, but they seldom leave their pilot stages to become nationally spread services.

The developers and suppliers experience that it is difficult to find ways to be paid for the development, operation and support of the eHealth applications, decreasing their interest in innovation.

The lack of reimbursement models make the healthcare clinics reluctant to use them, as they see that they are not paid for helping their patients use them, and they often lose revenue if their patients pay fewer visits.

So there is little or no incentive for a doctor that want to offer remote care via internet. It is also hard for suppliers to sell eHealth applications to healthcare clinics, even when it is proven that they are saving money and improving the health and patient satisfaction.

So the healthcare clinics are staggering under the increasing work loads and the patients must still allocate time to come visiting for most types of healthcare, even such visits that many today would prefer to do online. This is not sustainable today, even less so in the coming years with the growing healthcare needs from our aging populations!

The National Health Service in the UK is realizing this, see an interview in the Guardian with  the National Health Service Medical Director: “Wearable technology plays a crucial part in NHS future: Over the next few years the NHS will push forward with “a huge rollout” of such devices as part of “a revolution in self-care”.

How to speed up eHealth use? Read part 2!

Part 2 in this series of articles contains new reimbursement models that enable rapid implementation and wide use of useful eHealth services.

See also my article What is eHealth?, with a list of examples.

Feedback and comments are welcome!

– Henrik Ahlen, 
eHealth Advisor & Production Manager

Published by

Henrik Ahlén

I am an eHealth Strategist in Stockholm, Sweden I drive eHealth development projects from needs analysis and idea generation to service design and implementation. See my LinkedIn profile:

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