Ka-ching! Telehealth/telemedicine financing debated (US)

Categories: Latest News.

Revised 5 May

It’s tough out there, and despite the push to reduce readmissions and for healthier patients, likely to get tougher. What is not sorted out is the old 4BQ* and the new 4BCQ**. Two panels at ATA dissected financing for telehealth and telemedicine. ‘Paying for Telemedicine’ came to the unsurprising conclusion that the US can’t wait for the government to reimburse (ahem); it has to add value that customers (patients) will pay for. ACOs will spur this because underlying the model is sharing of risk. The second discussion concerned what VCs look for in health technologies (see 4BCQ) along with markets which exceed $500 million (seeking a big payoff, niche market products need not apply) and already successful entrepreneurs. Telemedicine financing takes center stage at ATA (Healthcare Finance News)

* 4BQ–Ed. Donna’s Four Big Questions: who pays, how much, who looks at the data, who takes action on the data

**4BCQ–Citing Jack Young of Qualcomm Ventures at ‘Financing Telemedicine’ ATA 2012. From here on in, we will credit Mr. Young and call them the Four Big Cost (and Care) Questions or 4BCQ From the article, “When seeking investment dollars, healthcare entrepreneurs should be able to explain how their product or service will benefit payers, patients, doctors and device makers.”  He goes on to specify the key benefits for each: “how will it reduce costs (payers), improve care (doctors), create convenience (patients) and drive revenue (device makers).”

The difference:  4BQ is operational and revenue stream–fairly basic stuff, but if this box isn’t ticked with assurance, you don’t have a product that can go to market.  4BCQ is broader and more complex; it needs to be answered by any eHealth enterprise in their business model to go for financing beyond the FFF level.  The benefits do cross–payers do care about care improvement (because of NCQA published quality standards), and costs are controlled in care models such as PCMH and ACO–but here is a start.