Its History
Telemedicine Applications
Telemedicine's Potential


Economic Opportunities
Exporting California's Expertise







Section I


California is a microcosm for the ills affecting the American health care system, as well as an example of all its benefits and progress. The United States spends more per capita on health care than any other industrialized country in the world. In many respects, the quality of care for those who can access the system is superior to that of any nation in the world, based on the training and expertise of physicians in the system and the availability of the most sophisticated diagnostic and clinical technology.

One of the great failings of the health care system, evident both in the United States and California, is its inability to assure access to health care services for large segments of the population, more so than in any other industrialized country. Forty-nine (49) of California's 58 counties have been identified by the Office of Statewide Health Planning and Development (OSHPD) as entirely or partially "medically underserved." This means that those counties do not have sufficient numbers of primary care physicians at hospitals and other health facilities to meet the needs of the citizens of these areas. The number of medically underserved areas in California has increased in recent years as demonstrated in Figure 1 and Figure 2. These figures affirm the impression that there is a maldistribution of the human and capital health care resources in California, with most of the resources being concentrated in affluent urban areas.

Figure 1 - Underserved areas as on 4/30/96

Figure 2 - Underserved areas as on 10/21/94

At the same time California has experienced more intensely than any other state, the impact of managed care. By its very nature, managed care ideally puts a premium on the effectiveness of care while simultaneously requiring fiscal efficiency in the delivery of that care. Responding to the influence of managed care systems, fee-for-service payers also address cost issues through utilization management mechanisms. Therefore, any attempt to solve the problems of access must be cost effective. One result of managed care has been a reduction in the need for hospital beds and access to medical specialists causing many California hospitals to merge or close and physician specialists to either accept a role in primary care, relocate, leave the field, or avail themselves of other options. Simultaneously, heath care providers in rural areas face increasing demand from a growing patient base while experiencing isolation from their professional peers. The educational activities for these professionals is far more limited than their counterparts in urban areas.

Finally, limited access to health care and quality of care are inextricably intertwined. The act of improving access to care in medically underserved areas will greatly enhance the quality of that care. Similarly, by improving the educational opportunities and professional interactions for rural health care providers, the quality of care in those communities will be improved. Most professionals agree that quality health care is efficient care so it follows that a method of improving the quality and efficiency of care is to assure access to that care in a timely manner.

One way to address the accessibility issue is through the "redistribution" of specialists and the clinical resources available inurban health care centers to these rural areas. Telemedicine promises to allow this redistribution to take place without physical relocation of these providers, which will prove to be a cost effective way to address these endemic problems.

Telemedicine is simply another tool in the physicians' "black bag" enabling the physician to practice medicine and health professionals to provide health education in the same fundamental manner as they have always done. Without it, both physicians and patients are limited to a relatively immediate geographical vicinity. Telehealth and telemedicine radically transform the delivery of health education and the practice of medicine by eliminating the significance of time and distance.

California is uniquely poised to exploit telemedicine technologies to address its health care needs because of its preeminence in the fields of telecommunications and information technology and while other states, such as Iowa, Texas and Georgia, have embraced a state-sponsored approach for the promotion of telemedicine, California has chosen to put the responsibility on private parties and organizations to spearhead the implementation of telemedicine to address public policy issues.

The Project is an effort by the health care community to coordinate the energies and desires of various stakeholders to employ telemedicine to address five areas of concern within California: access to care, quality of care, healthcare costs, resource allocation and professional education.

Upon accepting this challenge, the Planning Committee spent eighteen months studying telemedicine technologies and programs, envisioning the rewards and benefits for California's citizens, eliciting input from a broad spectrum of community representatives and successfully supporting legislation (SB1665 and SB2098) to remove some of the significant regulatory barriers to telemedicine.

This report represents the concerted efforts of the Planning Committee and the sincere desire of the health care community to apply the fruits of technological endeavor to the physical well-being of the citizens of California and to do so in a cost effective and enlightened manner that preserves the dignity of patients and the integrity of health care providers. It is the Planning Committee's hope that this report creates a greater awareness of telehealth and telemedicine within the provider, payer and governmental health care communities and a sense of optimism and enthusiasm that, with the proper precautions, this technology can usher in a new era in health care delivery.

Section I of this report furnishes a definition of telehealth/telemedicine, a concise history of telemedicine, an explanation of telehealth and telemedicine infrastructure and applications, a report on the status of telemedicine in California, including findings of surveys of California hospitals, clinics and long-term care facilities.

Section II addresses the policy, regulatory and legislative issues related to telemedicine.

Section III of the report supplies reference materials concerning telehealth and telemedicine.

Section IV is a program development guide which outlines steps for planning and implementing telehealth and telemedicine systems. This guide is a unique gift from the Planning Committee to local, civic and health care planners and providers as they explore how best to serve their constituents.


What is Telemedicine?

Telemedicine, like many emerging technologies, has no universally accepted definition despite the fact that telemedicine has been demonstrated for more than four decades. This is due, in large part, to the complexity of the communication technology and equipment which continues to rapidly evolve providing more application opportunities. For purposes of this report:

Telemedicine is the use of electronic communication networks for the transmission of information and data related to the diagnosis and treatment of medical conditions

Its History

Newcomers to telemedicine believe that it is a very recent innovation, but telemedicine actually began in the United States in the late 1950's. In 1959, the University of Nebraska employed interactive television for telepsychiatry consultations by linking the Nebraska Psychiatric Institute in Omaha and Norfolk State Hospital, an isolated state mental facility 112 miles away. In another notable early telemedicine project titled "STARPAHC (Space Technology Applied to Rural Papago Advanced Health Care), health care was delivered to residents of the Papago Indian Reservation.

In the 1970s and 1980s, limited telemedicine projects were instituted in the United States and in Canada, although, "with the exception of the 20 year old telemedicine program at Memorial University of Newfoundland, St. John's, none of the programs begun before 1986 has survived."1 The single most important reason identified for the failure of these programs was "the inability to justify these programs on a cost-benefit basis."

However, in the 1990s, with both federal and state governments active in promoting development of the national information infrastructure, telemedicine has grown from relative obscurity to having a wider visibility in a very short time. As in the 1970s and 1980s, the "driver" of telemedicine remains primarily the federal government, with no less than 13 federal agencies providing grants for telemedicine program development. While recent budget cutting in Congress is threatening the existence of some federally-funded telemedicine programs, advances in technology and decreases in costs are making telemedicine much more affordable and allowing institutions to sustain their programs without government assistance.

With the federal government providing funds for telemedicine programs, "manufacturers of video conferencing, imaging, computer, medical, and multimedia equipment have been attracted to the telemedicine market." These manufacturers, along with regional phone companies, cable companies, cellular phone systems, Internet service providers and others have a financial interest in encouraging health care providers to shift to electronic communications. With telemedicine, health care providers can increase efficiency through better management of information and data, expand market share and provide access to more timely and convenient services.

Telemedicine Applications

Telemedicine has the potential of having a greater positive effect on the future of healthcare and medicine than any other modality, especially in rural, underserved or remote areas where it can bring high-quality care where often little (or none) is available. Propelled by advances in multiple technologies such as digital communications, full-motion/compressed video, and telecommunications, providers see an unprecedented opportunity to provide access to high-quality care, independent of distance or location.

Much of the existing telemedicine literature focuses on radiology, pathology and dermatology although many other specialties are being investigated. Building on the foundation of information technology, telemedical applications have been and continue to be developed for use across the full gamut of health care practices.


Cardiology Obstetrics Psychiatry and Psychology
Dentistry Oncology Radiology
Dermatology OphthalmologyRheumatology
Neurology PathologySurgery and surgical subspecialties
Neurosurgery PediatricsToxicology
Nephrology/renal dialysisPharmacologyTrauma/disaster medicine

In addition to clinical applications, information technology that supports telemedicine can also support other functions.


Administrative dutiesConsumer Education Preoperative meetings with patients
Back-up coverage for physiciansDisability evaluationsQuality assurance
Child abuse assessmentHome health careRemote proctoring
Continuing medical educationNursing careUtilization review

Telemedicine's Potential

Although telemedicine is not a universal solution for all of our health care delivery problems, it can help minimize time and distance, extremely significant barriers to the delivery of health care, especially in non-metropolitan areas. The application of the "telecomputer" and other communications devices to health care will provide physicians and other health care professionals with the technological equivalent of a stethoscope, an essential and fundamental piece of equipment for every practitioner.

While skeptics suggest that telemedicine is dangerously close to being over-hyped and over-marketed, or in some areas of medicine under appreciated or not understood, it remains a viable, valuable and evolving professional tool. Doubts will be resolved as: (1) existing and emerging technologies become less expensive and more widely deployed; (2) more and more health care applications are available, tested, and used; (3) our human experience and education teach us that telemedicine can be very "user friendly,"; and (4) results become available about the real benefits (and costs) of implementing telemedicine. Mike Lapolla, Director of Academic Health Services and Director of the Telemedicine Center in Oklahoma suggests that telemedicine is "the metaphor....for an electronic umbilical cord that professionally links metropolitan and rural health care providers. Who knows the countless ways that we can all benefit from that?"

Telemedicine is still in its infancy in California, but beginning to make major strides. Improvements in communications technology and telemedicine equipment make it possible to provide telemedicine in a variety of settings. As health care providers and health plans become more knowledgeable about the potential of telemedicine, they will not wait for others to take the lead in using it. Telemedicine is quickly expanding beyond hospitals to broader points of service in the public and private sectors, including home health, long-term care, and correctional facilities discussed below. Other sites, such as hospices and schools, are opportunities waiting to be explored.

Home Health

The need for increasing home health services is being driven by several factors including: demographic trends, the shift in health care to more cost-effective approaches such as managed care and other risk-sharing systems, and the desire of patients, health care delivery organizations, practitioners, payers, and employers to control costs while still providing quality care. As a result, the home health care market is poised to expand dramatically.

Home health care can be delivered using a variety of technologies, such as: telephones, computers, monitoring devices, and interactive video (via cable television) that can help reduce or eliminate patient travel for hospital or clinic visits, resulting in lower costs for the patient. Home-based telemedicine could be particularly effective for post acute hospital care and for monitoring patients with such conditions as asthma or diabetes. Monitoring allows preventive measures to be taken before problems get so severe that hospitalization becomes necessary. This could be particularly helpful to people whose mobility is limited or who may not be well enough to travel. Telemetry devices for providing electrocardiograms and blood pressure readings could provide a more cost-effective method of care by reducing medical visits for conditions that are not severe.

Several testbeds are exploring the feasibility of using telemedicine to provide care to patients in their homes. The Medical College of Georgia, in conjunction with several collaborators, is developing the "electronic house call." The project links 25 homes of patients with chronic illnesses to practitioners via the local cable television infrastructure, using a personal telemedicine system with two-way interactive video, audio, and medical diagnostic instrumentation.

Other vendors have developed home telemedicine systems that rely on standard telephone lines to connect homes with a monitoring center. These systems allow around-the-clock nurse monitoring with equipment that is leased on a daily fee basis.

Long-Term Care

Access to a range of medical specialties can be cost effectively provided by telemedicine to residents of long-term care facilities. Travel time, cost, and inconvenience are avoided by eliminating travel except in cases where the consultative diagnosis shows that it is necessary for treatment, thereby improving the quality of care and reducing patient risk.

Beneficiaries of telemedical services would not be limited to patients. The family members of residents can benefit as consumers of health education delivered via communication networks, expanding their knowledge of topics related to their relatives. Primary care physicians and other caregivers at long-term care facilities could learn from increased direct consultative interaction with specialists and from formal educational events. Staff capabilities, morale, and retention, often a problem in the long-term care industry, could be affected positively. The easy transmittability of patient electronic records, including digital images, would be more conducive to a managed care environment. Specialists, hospitals, and other providers would gain access to more lives and would thus be able to spread their costs more effectively.

Comparing the benefits offered by telemedicine with the current and future needs of the long-term care segment of health care yields an undeniable, striking fit.

Correctional Facilities

Telemedicine offers significant "safety and security and cost advantages to correctional facilities" while being able to provide the services of specialists not readily available to incarcerated individuals. For correctional facility managers, telemedicine may offer a means of: (1) providing appropriate health care evaluation without compromising security, (2) reducing costs associated with transport and protection, and (3) gaining access to physician specialists and resources unavailable within the prison medical system. The University of California Davis Medical Center and the Department of Mental Health in Riverside are developing telemedicine programs within their respective county jail systems. Similar telemedicine programs could be established in detention facilities at all levels from youth detention centers to federal penitentiaries.


Telemedicine Assessments

In an effort to determine the extent of the use of telemedicine in California, The Project initiated four individual surveys of health care facilities: rural hospitals, urban and rural medically underserved primary care clinics, long term care facilities, and home health agencies. This report includes the findings of the first three surveys; the California Association of Health Services at Home survey results are expected late Fall 1996.

Rural Hospital Survey

The Rural Healthcare Center of the California Healthcare Association identified 74 acute facilities meeting the State of California designation of rural hospital. Surveys were sent to all 74 facilities and returned by 66 of them, achieving an 89 percent return rate. The 74 rural hospitals surveyed were relatively evenly distributed between northern and southern California with 42 facilities located north of Fresno and 32 located south of Fresno.

Primary Care Clinic Survey

The clinic-specific survey instrument was distributed to 233 facilities selected from the OSHPD database that identified appropriate clinics based on their location within a: (1) Health Professional Shortage Area (HPSA), (2) Medically Underserved Area (MUA), and/or (3) Medically Underserved Populations (MUPs), and augmented by a list from the Primary and Rural Health Care Systems Branch of the California Department of Health Services. It was returned by 15 percent of the clinics surveyed.

Long-Term Care Facilities Survey

The long term care survey was conducted by the California Association of Health Facilities (CAHF), a statewide organization for long term care providers. The survey was sent to its 1125 member-facilities who provide health care services in settings which include: skilled nursing, intermediate care, subacute care, mental health facilities, homes for persons with developmental disabilities and residential care facilities for the elderly. The return rate for these facilities was 5.6 percent.

General Survey Findings

There is a wide contrast in the return rates for the types of facilities: rural hospitals, 89 percent; primary care clinics, 15 percent; and long term care facilities, 5.6 percent. Rural hospitals had the highest return rate primarily because each facility that did not reply received a follow-up telephone call to increase the response rate. This was feasible because there were fewer hospitals to contact; compared to the number of clinics and long-term care facilities.

The data from all three types of facilities indicate: (1) a need for education about telemedicine; (2) an overall lack of familiarity with or awareness of telemedicine; and (3) that implementation costs and lack of reimbursement for medical services are major issues when considering whether to develop a telemedicine program.

Facility Specific Findings

Counties within California are designated either metropolitan, non-metropolitan, or metropolitan with rural census tracts. The surveyed hospitals that use telemedicine are located in 20 counties with the following designations: metropolitan: 1; non-metropolitan: 7; and metropolitan with rural census tracts: 12.

Rural Hospitals

Respondents indicated that:

· the predominant areas of telemedicine usage are clustered in the Central Valley and the eastern slope of the Sierras.
· a majority are unfamiliar with telemedicine.
· the major benefits of telemedicine are perceived as: 1) improved patient care; 2) enhanced scope of health services to the community; and 3) reduced clinician isolation.
· the primary obstacles to implementing telemedicine are: 1) cost of equipment; 2) limited reimbursement; and 3) operational costs.
· they perceive telemedicine as having more benefits and fewer implementation obstacles than clinics and long term facilities.
· 18 out of 20 facilities with telemedicine systems use only teleradiology.
· they lack awareness of medical staff interest in telemedicine.
· they rely somewhat on affiliations with local community groups and organizations.

Primary Care Clinics

Respondents indicated:
· less familiarity with telemedicine than acute facilities.
· the principal benefits of telemedicine as: 1) improved patient care; 2) enhanced scope of health services to the community; and 3) reduced clinician isolation.
· the primary obstacles to implementing telemedicine are: 1) cost of equipment; 2) limited reimbursement; and 3) operational costs.
· one facility uses telemedicine.
· a lack of awareness of medical staff interest in telemedicine.

Long-Term Care Facilities

Respondents indicated:
· that they are not well informed about telehealth and telemedicine.
· teleradiology is the most commonly used telemedicine application.


While the response rate varied widely among the respondents, sufficient data was obtained to draw the following conclusions:

1. All providers need and will derive great benefit from educational opportunities to learn about telehealth and telemedicine including applications, availability and cost of equipment, and the necessary components of a sound program development plan that includes needs assessment, strategic planning, risk management, and evaluation phases.

2. The lack of knowledge about telemedicine in nonacute facilities is probably due to several factors:, (1) cost of equipment, (2) operational costs, (3)the lack of marketing to institutions other than acute hospitals, (4)and the lack of equipment portability.

3. Teleradiology is the most frequently used telemedicine application among all providers probably because it is one of the few applications for which there is reimbursement, start-up is relatively inexpensive, and some technical standards have been developed.

4. Access to care for underserved populations and rural communities will be improved by making grants and technical expertise available to the facilities that can link these consumers with needed services.

5. Equipment and operational costs, which have been unaffordable for all but the largest organizations, have been largely responsible for the limited number of providers who have implemented telemedicine programs.

The development of this report and the successful support for changes to remove barriers to existing laws described in Section II are cornerstones in the Planning Committee's efforts to meet these needs and support the deployment of telehealth and telemedicine.

Telemedicine and its Economic Impact

These are challenging times for California's health care delivery system which, like many industries, is struggling with change and increased competition. Managed care, primarily responsible for the upheaval, stresses efficiency and reduces the need for specialists. In response, specialists, seeking new ways to utilize skills acquired over years of medical training and practice, are embracing telemedicine. By doing so they could prove to be an enormous asset to California. This cadre of professionals can serve as a resource to address health care needs in underserved areas.

Economic Opportunities

Telemedicine may be more than a health care issue for many rural communities. It can be an issue of economic development. It is well understood that rural hospitals are an economic anchor in their communities. They are a means of attracting and maintaining businesses who want to ensure access to health care services for their employees. Rural hospitals are also employers of relatively large numbers of people and consumers of local services. If local health care providers can offer appropriate services for consumers, allowing them to remain in their community for care, it might help these facilities remain open.

Recently, states such as Iowa, North Carolina and Connecticut have been investing in telecommunication infrastructures to expand opportunities for economic development. The Iowa Communications Network was initially limited to education but has rapidly grown to address the health care needs of its citizens. Terry E. Branstad, Governor of the State of Iowa summed up the Iowa Communications Network this way:

"The Iowa Communications Network is our state's information highway of the future. It is an investment that will pay dividends in terms of excellence in education, government efficiency and economic growth opportunities."

California industry is now aggressively developing a telecommunications infrastructure that will provide the highest quality and lowest cost services. In a report titled Getting Results, prepared for California Governor Pete Wilson by the Governor's Council on Information Technology, it was noted that "technology is making competition in all telecommunications markets economically feasible: wireless, satellite, cable and telephone systems are truly becoming potential competitors as the costs go down and the sophistication of technology increases." For California health care providers to compete with external providers using sophisticated technology to deliver health care via telemedicine, it must have "competitive, high quality, low cost telecommunications markets."

Providing a competitive telecommunications network is not an issue to wait for another day, it is a matter of competitive advantage for California generally and its health care providers specifically.

From within the crucible of change comes tremendous opportunity to redefine California's health delivery system by reinventing or redistributing the knowledge base of its physicians throughout the state, the country and around the world. These "surplus" practitioners could organize themselves in a variety of ways (independent groups, professional associations, networks with hospitals or insurers, etc.) to expand their service areas. Major opportunities exist, first, within the state. California has a large rural population with 49 counties having medically underserved communities while, at the same time, most of its medical specialists and tertiary care centers are concentrated in only a few metropolitan areas.

Telemedicine, as will be shown in this report, has already demonstrated that it can improve accessibility to health care services. An example of how providers and practitioners in an urban center can assist a rural community follows.

Colusa Community Hospital

Colusa is a small community located approximately 60 miles north of Sacramento. The medical staff at Colusa Community Hospital (CCH) is comprised of primary care physicians: family practice and internal medicine. In 1990 a telefetal monitoring link between the University of California Davis Medical Center (UCDMC), in Sacramento, and CCH was established. The link was requested because the local physicians were uncomfortable running an obstetrical service without the backup of an obstetrician. Prior to the link, obstetrical services were not offered at Colusa Community Hospital. The link to UCDMC provides that backup.

Before the telefetal monitoring program began in 1990, nearly 100 percent of the pregnant women traveled out of Colusa County to deliver their babies. The only deliveries in the County were under urgent or emergent circumstances. By 1993, with perinatology back-up from UCDMC approximately seventy-five percent of mothers delivered in their home county, as shown in Figure 3.

Figure 3

In addition to allowing pregnant women to remain in the community for their care, the telefetal monitoring program has provided a variety of other benefits including:
a fully-operational, high-quality, obstetrical service at Colusa Community Hospital;
a reduction in the number of emergency transports of mothers to tertiary care centers; and
early diagnosis of potential health problems resulting in more cost-effective care.

On May 10, 1995, Ed Bland, CEO of the Colusa Community Hospital delivered testimony before a Joint Hearing of the California Senate and Assembly Rural Caucus, describing how additional use of telemedicine has been cost-effective in his hospital. "At Colusa Community Hospital we have been sending electroencephalograms (EEGs) to Texas for interpretations since the early 1970's. In 1991, when we needed to expand our radiology coverage, we again turned to telemedicine. Faced with spending possibly $250,000 to recruit a radiologist, who has to eat, sleep, have vacations, etc., teleradiology seemed a logical possibility. We "recruited" a radiology group in Chico, 45 miles away, and installed a computer system between us that gives us access to their seven diagnostic radiologists, 24 hours a day, 365 days a year. Any time, night or day, we can get an X-ray interpretation using our teleradiology system which initially cost us $10,000 to install."

But telemedicine is a two edged sword. While it allows California providers the opportunity to export their services to underserved areas, it can also be used by in-state providers to import health services unavailable in the state due to cost, interest, availability or accessibility. California practitioners and providers should keep in mind that if they fail to meet the health care needs of California consumers, then practitioners from outside of the state will do it for them. This process has already begun in a limited fashion. Currently, Harvard Medical School is providing consultative services to a Head Start Program in Southern California and discussing opportunities to provide psychiatric services in several rural northern California communities. Another well-regarded institution, the Mayo Clinic, is currently using satellite technology to extend the reach of its physicians to other parts of the country and the world. Such programs pose an external competitive challenge to California's health care providers and should be viewed as a challenge to the state's economic base rather than simply intrastate health care competition.

Exporting California's Expertise

While efficiencies and new methods of treating patients may reduce the need for highly trained specialists to provide medical care services locally, there is a tremendous opportunity to export the valuable knowledge available from the many physicians and researchers through the new medium of videoconferencing. California is already establishing itself as a pacesetter in using telemedicine to export its world-class expertise nationally and internationally. Following are three examples of California Centers of Excellence using telemedicine to improve patient access to care, be competitive and export their medical expertise within California, as well as nationally and internationally.

Stanford International Telemedicine Program

Stanford Health Services has implemented telemedicine at two key links to the Pacific Rim with this technology. The first program, developed in 1991, is a tele-education program with the Makati Medical Center in Manila, the Philippines. Makati physicians select the topic for discussion and an appropriate Stanford specialist prepares and presents a lecture over the system.

A second program recently implemented between Stanford Health Services and Singapore General Hospital is a teleradiology/tele-education link. Digitized X-rays are sent from Singapore to specialists at Stanford for overread. Stanford radiology specialists review the radiological documentation and send back a written report to the Singapore practitioner. In addition, interactive conferences are organized throughout the year to discuss teleradiology cases that have been sent to Stanford. The conferences allow for case presentation and discussion in a particular area of interest.

Los Angeles County and University of Southern California

The Los Angeles County and University of Southern California (LAC and USC) Violence Intervention Program is a medically-based system that provides multidisciplinary interventions for all victims of domestic violence, sexual assault, and child abuse and neglect. The Program's Center for the Vulnerable Child (CVC) has established effective links between Los Angeles County's law enforcement agencies, prosecuting attorneys, medical professionals, social services and the courts in an effort to maximize intervention efficiency while minimizing trauma to the victims.

Utilizing telemedicine/video link, the CVC provides off-site clinics with immediate access to the CVC staff of experts through the transmission of images and data. This avoids travel for traumatized children, their families and law enforcement personnel and reduces the time between completion of diagnostic evaluations and the initiation of recommended treatment plans. The CVC also utilizes this linkage to communicate case findings to the appropriate law enforcement and social service agencies to assure that cases requiring intervention receive immediate attention and cases in which abuse or neglect are ruled out receive appropriate support and/or referral.

The CVC is not only a pioneer in the field of physical abuse and sexual assault but it serves as a national model for establishing similar centers across the United States. It has set the national and international standards for medical diagnosis of child sexual assault and is working to establish medical standards for adolescent and adult assault victims. By adding telemedicine to its evaluation program, the CVC can make its expertise available any where it is needed to provide assistance on individual cases or to consult on program development.

University of California at Los Angeles

To reduce the cost of radiology service for its 9, 000 employees, dependents, and other area residents, Harris Corporation of Melbourne, Florida, has designed its own teleradiology system linking it to the University of California at Los Angeles (UCLA). UCLA radiologists provide expertise in approximately 14 subspecialties and provide overreads for the Florida-based company's radiologists. This teleradiology linkage allows UCLA's specialists to provide world class expertise to people at competitive costs regardless of where they live.

Governmental Telemedicine Initiatives

While the initiative to expand the use of telemedicine has been induced primarily by federal grant money for telemedicine projects throughout the United States, various California governmental entities are piloting telemedicine projects of their own to determine its benefits to their operations. A summary of programs follows.

County of Riverside, Department of Mental Health

After conducting needs assessments, developing a program plan, and conducting preliminary outpatient clinical trials, the Department of Mental Health (DMH), County of Riverside, established a two-terminal system to link the psychiatric emergency rooms in Riverside and Indio, California. This linkage has been operational since January 1996.

DMH has, for many years, operated the only psychiatric emergency room in Riverside County with a psychiatrist on-site 24-hours a day. Although emergency room psychiatrists are on call throughout the system and have traditionally done a reasonable amount of telephone triage, patients from the Desert Region (Palm Springs, Indio, Blythe) have, of necessity, been physically transported to Riverside whenever an emergency psychiatric evaluation was needed. Transportation (ambulance or law enforcement vehicle) costs averaged about $300 per trip, with several such trips per week being typical.

To meet the needs of seriously mentally ill Desert Region residents locally, the DMH built a second psychiatric emergency room and smaller inpatient unit in Indio. Desert region emergency room volume was such that 24-hour physician staffing would have been costly and inefficient, while the nature of the program required 24-hour physician availability. The problem was solved by scheduling on-site psychiatrists 10 hours per day, and covering the remaining 14 hours by video linkage to the Riverside emergency room. This arrangement has almost eliminated trips from the Desert Region to Riverside for emergency psychiatric evaluation. Using a conservative estimate of three trips per week avoided (at $300 each), two weeks of transportation savings offset the fixed cost of the video system for a month.

However, the greater savings accrued by avoiding 14 unnecessary hours of on-site psychiatrist time at $70 per hour ($980 per day) which means that two days of staffing cost savings pay the video fixed costs for a month. Thus, the system addresses the clinical, risk management and equity problems of providing psychiatric availability in the Desert Region while minimizing incremental psychiatric costs and reducing transportation costs.In 1997, Riverside DMH is considering placing additional video terminals in jails at Temecula, Indio, and Blythe, in cooperation with the Sheriff's Department. The Sheriff's Department has also expressed interest in having a terminal in their regional substations so potential patients could be evaluated there rather than being unnecessarily transported to mental health facilities.

California Department of Health Services

The Western Consortium for Public Health (WCPH), along with several public and private partners, has developed a program to demonstrate and evaluate the benefits of video conferencing and remote, pen-based, data entry and information gathering via wireless telecommunications technology in a rural public health environment. The project will serve 11 rural counties of California (Alpine, Amador, Calaveras, Del Norte, Glenn, Lassen, Mariposa, Modoc, Mono, San Benito, and Sierra). Due to their extreme geographic isolation and scarce economic resources, these counties rely heavily upon the California Department of Health Services (DHS) to provide their core public health services information. DHS manages these 11 county health departments from Sacramento.

The first part of the demonstration will create an information and communications network that will link the 11 county health departments to the main office for video conferencing and data communications. This will reduce the need for travel by enabling DHS staff to attend meetings remotely, provide the staff with greater access to training programs, and help reduce professional isolation by providing peer-to-peer communication through services such as electronic mail. The network will also allow for rapid reporting and consultation regarding possible threats to community public health and safety, such as toxic spills and outbreaks of communicable diseases.

The second part of the demonstration will provide public health workers in Yolo County with pen-based, hand-held computers that can communicate over wireless links to the county's information systems. All communications will be secured using public/private key or other standard encryption techniques. Use of the pen-based computers will enable the field workers to (1) capture data at the point of service delivery, reducing redundant data entry, (2) access databases when they need the information, and (3) receive program alerts from the central office.

WCPH will evaluate the project's success by focusing on the questions of whether the demonstration project increases staff productivity by conducting time and motion studies, examining cost data, and assessing staff effectiveness.

California Department of Corrections

The California Department of Corrections (CDC) is one of the largest correctional organizations in the world as demonstrated by the following key departmental statistics.
Budget: $3.4 billion for 199596
Employees: 42,400
Sites: 31 prisons and 38 camps
Inmates: approximately 141,000
Parolees: approximately 96,000
Externals: 117 parole offices in 64 locations

Like many other correctional organizations throughout the country, the CDC is trying to cope with a rising inmate population. In early 1995, the CDC approved a Video Communications Goal Statement, which states: "The CDC will explore the use of video communications technology as a means of enhancing the accuracy, timeliness, productivity, and effectiveness of communications and information sharing using the most cost-effective, appropriate and reliable mediums available."

After an extensive analysis of the Department's health, security and administrative needs, the CDC proceeded with the development of the Video Communications Strategic Plan which was released in April 1996 and outlines several key initiatives, including telemedicine, designated as a high priority pilot project.

The telemedicine pilot the CDC is implementing will involve telepsychiatry and connect Pelican Bay State Prison to the Correctional Medical Facility in Vacaville. Some of the major benefits they hope to achieve through the use of telemedicine include:

increased access to specialistsobviating the need to recruit specialists
reduced guarding costsreduced travel time
quicker problem solvingtighter correctional security

Office of Statewide Health Planning and Development

Cal-Mortgage Loan Insurance Division

The Cal-Mortgage Program administers the California Health Facility Loan Insurance Program, which allows health facilities to borrow money for capital needs from long-term lenders with Cal-Mortgage guaranteeing the loan using the "full faith and credit" of the State of California. One of the Division's main priorities is to focus on primary care facilities, with a special emphasis on underserved areas and populations. With regard to telemedicine, Cal-Mortgage has recently started to encourage facilities, seeking funds for new facility construction to explore the potential of telemedicine from the perspective of affiliating with larger facilities to acquire access to services not available in their community. It is hoped that using telemedicine judiciously, in collaboration with full service hospitals and other types of providers, will help minimize the need for capital construction costs while allowing hospitals to continue to meet the health care needs of the communities they serve.

Department of Veterans Affairs

The Department of Veterans Affairs (VA) has been active in telemedicine nationwide for many years. Their emphasis on telemedicine becomes more important with downsizing and budget constraints in the face of providing better health care to more and more veterans. Telemedicine projects utilized by the VA in California include: teleradiology, teledermatology, telepathology, and distance psychiatric observation/evaluation among other programs.

In addition, the VA has surgical telementoring, distance learning (real-time grand rounds) and real-time continuing medical education interactive instruction via videoconferencing in the current planning and implementation stages. With the number of outreach clinics increasing, there is an expanding need for second opinions and referral evaluation. Many of the extra services can be implemented economically with the aid of videoconferencing linking rural California clinics to VA specialists in its urban medical centers. The VA's growing national network among its medical centers, with links to its rural outreach primary care clinics and close affiliations to major medical center's medical schools makes the Department of Veterans Affairs one of the leaders of telemedicine nationally and in California.


Studies have shown that an estimated 80 percent of health care is self-administered. Self care is on the rise for a variety of reasons and relates to many factors usually not included in traditional health care services including: self diagnosis and treatment; family health and support; behavior and lifestyle adaptations; information seeking and retrieving; participation in voluntary support groups; environmental exposures at work and home; and information sharing among community members. In addition, community members and organizations throughout California understand that the health of a community is related to the well-being of all community sectors, including education, employment, housing, justice, environmental protection, recreation, as well as health and social services.

Framework for a Healthy Community

Historically, members of communities have joined forces to share their limited resources for the benefit of the community. A healthy community is one supported, in part, by an information infrastructure. It can therefore be a "virtual" community which can exist without physical boundaries and one that need not be limited to health care providers or consumers. By sharing access to an integrated telecommunication system that provides sound, data, graphical display and images. Schools, libraries, community colleges, businesses, local governmental agencies, law enforcement, and the overall population will benefit and applications will be more cost-beneficial. The use of information technology to meet community needs is, for the purposes of this report, defined as follows.

Telehealth is the use of electronic communications networks for the transmission
of information and data focused on health promotion, disease prevention, and
the public's overall health including patient/community education and
information, population-based data collection and management, and
linkages for health care resources and referrals.

An information infrastructure can provide professional and educational opportunities for all members of a community by enabling more cost-effective, integrated health and human services access to the members. Community-wide collaboration to build a linkage to the National Information Infrastructure (NII) and to support development of telehealth applications can be an important part of a community's economic development and well-being by improving employment opportunities, providing skilled and satisfied employees and residents, and allowing the community to compete more effectively in the marketplace. It is recognized that, while health maintenance and well-being are idealistic goals, particularly in a health care marketplace that is experiencing pressure to reduce costs while maintaining quality of care, there are limited resources to support free-standing telehealth programs. It is, therefore, a great opportunity to partner telehealth programs with local programs on a community-wide information infrastructure.

Overall, in order to build an effective and sustainable information infrastructure, local civic leaders need to embark on a planning process which includes the following elements: leadership, assessment, strategic plan development, risk management, program design and management, and implementation and feedback. To assist individuals and communities committed to pursuing a solution to community needs utilizing an information infrastructure, a Program Development Guide (PDG) has been created as a result of The Project and is provided in Section IV. This Guide outlines the telehealth and telemedicine planning process in detail.

Telehealth Applications

An overview of telehealth applications is provided to assist program developers in assessing the range of options available using information technology to address the health needs of a community and to stimulate ideas and discussion of other options. Current and emerging telehealth practices encompass a wide range of applications that can be categorized under the general headings of: education, collaboration, administration, or consultation. Some existing or potential applications, by user, in each category are identified below but the possibilities are limitless as the technology continues to develop.


Consumer: 1. Internet access from home or local libraries. The Sacramento Library System offers "Doc In A Box" where consumers, using computers, can ask a physician, located at a hospital, questions related to breast care and breast cancer.

2. Another information source is through telephone dial-in services, noted in local telephone directories and newspapers, which identify ways to access audio tapes on a variety of health and environmental issues.

Professional: Continuing education courses for physicians and other health care providers.

Provider: 1. In-service educational programs.

2. Internal communications regarding programs, administrative matters, and employee relations.

3. Use of the Internet or videos, by facilities and practitioners, to provide patients and their care givers with information regarding disease processes, recovery or rehabilitation programs, and home care information.

Community: Access to the California Smoke-Free Cities program cosponsored by the California Healthy Cities Program, in partnership with the League of California Cities.


Professional: Breast cancer professionals meet via teleconferencing in libraries, community colleges, hospital, and other sites throughout the state. Public health offices broadcast health alerts to all providers and practitioners in the community.

Client: Physicians and facilities use professionally prepared videos to educate patients preoperatively, giving the patient time to develop and discuss questions prior to a procedure.

Expert/Student: Electronic Grand Rounds, Morbidity and Mortality Conferences, and continuing education programs can be accomplished by two-way video conferencing or viewing videos.

Communities: The California Telehealth/Telemedicine Coordination Project Planning Committee and the Healthy Cities Project are prime examples of members of communities, widely varied both geographical and by discipline, coming together to address health issues.


Programs: Many acute facilities offer outreach, education, and wellness programs to the citizens of the communities that they serve.

Providers: The Riverside Mental Health Department administers a program (fully described in telemedicine applications) to assure that the local Sheriff's Department has services for their detainees.

Payors/Insurers: Many payors/insurers offer on-line billing and inquiry service to speed up the process of claims processing and adjudication.


Professional: Professionals have often used the telephone for consultation purposes to access help for patients. This can now be accomplished and enhanced by the use of email and other media to transmit vital data, thereby reducing misinterpretation of information previously exchanged only verbally.

Peer: Professionals and consumers alike can access existing or begin new peer groups for the exchange of information and support utilizing human networks on the Internet.

Expert: Consultation on Anti-Dumping cases which require immediate action, between by the Health Care Financing Administration and the state Peer Review Organization (PRO), and between the PRO and their expert consultants.

Technical: Consultation on pathological tissue when an immediate response is required in order to determine which course of surgery is needed.

Telehealth in Action

Programs that support the concept of improving health are emerging in cities throughout California and communities can benefit, in part, by utilizing the information infrastructure to support programs related to a healthy community. The California Healthy Cities Project and San Diego All Kids Count Program are examples of such programs and are summarized below.

The California Healthy Cities Project

A statewide resource in developing a community commitment to wellness is the California Healthy Cities Project. The Sacramento-based Project, established in 1988, is funded by the State Department of Health Services, "the first and only state health agency in the United States to fund a Healthy Cities project." A major premise of the California Health Cities Project is that there be broad-based community involvement in identifying and working to meet the health and health-related needs of the residents within the city. To help improve the overall health status of its citizens, the Healthy Cities model provides an integrated approach to enhancing the health of a city by focusing on a process for community improvement.

Of the 32 California cities that have participated in the California Healthy Cities Project since its inception, 26 are currently active in the program. The cities taking part are diverse municipalities varying widely in size, economic status, and geographical location. They address concerns ranging from environmental protection to public safety to adult literacy programs giving residents the skills to improve their health.

To assist cities with their efforts to put the Healthy Cities model into practice, The Project offers educational programs, technical consultation and resource materials to, at present, only incorporated cities throughout the state.

San Diego All Kids Count

The All Kids Count (AKC) project was launched to help increase immunization rates among preschool-aged children in the County of San Diego from its current coverage level of 76 percent to the national goal of having 90 percent of all children two and under fully immunized by their second birthday. The objective is to reduce rates of illness, disability, and death from vaccine-preventable diseases. The specific purpose of the project is to develop a county-wide computerized immunization information and follow-up system serving both public and private sectors.

Current Program Activities

The activities related to this program include:
· Successful implementation of a provider-based system in the community health centers.
· Development of a Central Registry Database Pilot with four different provider sites: a public health clinic, a community clinic, a health maintenance organization, and a private provider.
· Design and development of the communication network for the Central Registry.
· Software support, training, and follow-up for the provider-based system and the Central Registry pilot sites.
· Weekly downloading of San Diego County birth records to the Central Registry System.
· Collaboration of AKC technical staff and technical experts in the business and civic communities.
· Development of a promotional campaign geared towards informing physicians, parents, and the community on the All Kids Count immunization registry/recall system.

Expanding Telehealth

The lines of distinction between consumer, provider, professional, and student are becoming less distinct with the assistance of information technology. As a result of the rapid expansion of the Internet alone, consumer demand for and availability of a wide range of self-health promotion, education, care, and in-home telehealth applications are emerging. Other programs, comparable to those described, can be developed to meet the increasing demand from consumers and professionals in the managed care environment. To that end, communities have an obligation to support their citizens in these endeavors.


The body of knowledge and experience related to information technology can be overwhelming and is, at some levels, so complex that it requires a document of its own. For purposes of this report, a summary of the topic is provided to give telehealth and telemedicine project planners an elementary understanding of the processes and equipment related to information technology. By definition:

Information technology is the storage, manipulation, and communication
of information in text, image, audio, and video formats.

There is significant support for the premise that the application of information technology to health and medicine holds great promise and health care professionals are becoming enthusiastic about the possibilities. However, future users should understand that a great deal of enthusiasm is also being generated by the suppliers of the information technology products and services. These industries include communication carriers, cable systems, Internet service providers, video conferencing manufacturers, software developers, computer manufacturers. The reason for their enthusiasm is simple. Industries recognize the inherent economic benefit for their businesses. Therefore, telehealth and telemedicine program developers are cautioned to place health and medicine first, not technology.

Cost Issues

As affirmed by the surveys of California facilities conducted for this project, respondents consider the capital equipment and transmission costs associated with information technology a major consideration and/or impediment to launching a program. While it is critical to factor in these costs when planning a system/network, costs are declining. Approximately eighteen months ago, the range of equipment costs for a two-way, live, interactive video site was between $50,000 and $100,000 but, with decreasing equipment and software costs, a similar system today costs between $30,000 and $50,000.

Perednia and Allen suggest that having "two-way full motion video may be an unrealistic "gold standard" for rural and underserved areas." Likewise, potential users who could provide essential services to their communities while actualizing benefits for themselves express concerns that this level of technology is simply "too rich for their blood." However, with deregulation of the telecommunications industry, the tremendous advances being made in equipment technology, decreasing equipment costs, and mandatory special consideration for pricing of services for rural and/or isolated areas, it is anticipated that medically underserved communities will have greater accessibility to the technology. The real challenge today is not whether or not to participate in telehealth/telemedicine, but in choosing the most appropriate technology to meet the desired program objectives.

Technologies to Deliver Telehealth and Telemedicine

The fundamental characteristic of information technology is the capture, transfer, and receipt of useful information from one site to another. The basic components include a source (device/terminal), connection to a communication network, and a destination (device/terminal). The two technologies used to transmit information and most commonly referred to in telemedicine are (1) store and forward and (2) two-way live, interactive television (IATV).

Store and forward systems provide the ability to capture and store text, audio, static and video images and forward them for review and or consultation by a physician. The advantage of a store and forward system is that it eliminates the need to have both consulting parties available at the same time. Further, the supporting information technology requirements for this type of system are less demanding and therefore tend to be less expensive.

Store and forward networks can support a variety of functions from the simple to the complex. Some aspects of radiology, pathology, and dermatology are especially well-suited to the use of store and forward networks. There are, however, limitless possible uses ranging from prescription ordering and refill requests to continuing medical education to patient recall systems. Telehealth and telemedicine applications were fully discussed previously in this Section of the report.

Live interactive systems allow individuals or groups of people in different locations to hold meetings. Participants can hear and see each other "live" and images of documents and objects can also be exchanged. The supporting communications network must have adequate carrying capacity (bandwidth) to enable the transfer of audio and video signals as well as text and/or image files. Live interactive communications can be used for distance learning enabling a rural physician to observe a new surgical procedure, attend or give a lecture without making the trip, or consult with a specialist located at a distant facility, with or without the patient present. Recent improvements in digitization and data compression technologies allow transmission of enormous amounts of information needed for video conferencing while using much less bandwidth than previously required thereby reducing operating costs.

The primary component of communications technology related to the delivery of telemedicine services is the carrying capacity, or "bandwidth," needed to transmit a given amount of information within a fixed period of time. The last 15 years have seen the introduction of digital network facilities, having a dramatic improvement in the cost and availability of bandwidth. Bandwidth serves as a practical limit to the size, cost, and capability of today's telemedicine systems and can indeed limit the functionality and appeal of many clinical applications.

Long distance carriers, regional telephone companies, cellular networks, satellite providers, and cable companies are experiencing the melding of their previously diverse markets into one where they all sell one thing, bandwidth. Health care is a very attractive market for these bandwidth providers where they can help modernize and simplify many of health care's old fashioned paper and labor intensive methods of handling information and data.

There are a number of communication technologies being developed and tested which will expand opportunities for telehealth and telemedicine. High bandwidth technologies include asynchronous transfer mode (ATM), satellites, asymmetrical digital subscriber line (ADSL), and cable modems. Lower bandwidth technologies begin with standard analog phone lines, and digital networks beginning with integrated services digital network (ISDN). The selection of a communication service is determined by the type(s) of information, the amount of information, and the urgency of the information exchange which is illustrated in Figure 4.

TYPE OF IMAGE       STANDARD            ISDN            ADSL       CABLE**   
 (Image Size)      PHONE LINE        PHONE LINE         T-1*           
               (Analog@28.8kbps)  (Digital@128kbps)   @1.5Mbps     @4Mbps           
Tomography            73 sec           16 sec          1 sec       <1 sec  

2000x2000x12bits    27.8 min          6.3 min         31 sec       12 sec  

  video:             2.3 hr          31.3 min        2.6 min       60 sec  
 30 sec                                                  

These figures are for comparison only.
* ADSL and T1 are different systems that have roughly comparable transmission capability. T1 technology can be used with fiber optic or regular phone lines. ADSL is an experimental technology designed to use regular phone lines but not expected to be available until about 1998.
** Cable modems are expected to be offered relatively widely by cable companies within the next 18 months.
Source: DxNET,LLC

Figure 4


Standards represent universally accepted agreements on how to implement technologies, allowing interconnection and communication between devices manufactured by different companies. Standards ensure the ability to exchange information across town, across the country, around the globe. They define how peripherals connect into a personal computer and they describe how information is represented such as the description of clinical procedures and diagnoses.Health Level Seven (HL7), created through the combined efforts of representatives from the medical profession and technologists, is the standard for electronic exchange of health data. HL7 now includes structures for communicating clinical orders, billing information, and patient admission, discharge, transfer, and registration information. The Digital Imaging and Communication in Medicine (DICOM) standard was created in a clinical and technology partnership, defines common formats for data generated by imaging equipment and routine actions that can be performed on images. It also specifies how messages about the data and the processing actions can be exchanged.

The Future: "Informed Speculation"

The cable industry is keenly interested in pursuing the opportunities made available by the federal legislation deregulating the communication industry. There are several pilots underway across the nation, related to two-way communications on their networks. The use of cable modems will allow consumers to use the cable network to send information at very high speeds over what has typically been a "receive only" cable television network. One of the attractive uses of cable modems is that they can be used to deliver health information into the home via the Internet. One such new service which provides Internet services through the television is known as Web TV, which is being tested extensively in Fremont, California.

The promise of the cable modems, combined with improving technology, is causing telephone companies to consider the introduction of digital subscriber line (DSL) services. The different types of DSL services may be able to provide low cost, very high speed communications over existing copper facilities.

A third high bandwidth technology that is also gaining significant attention is satellite communications. Direct Broadcast Satellite (DBS) is a system involving communications satellites which transmit television programming signals directly to earth stations located at home or place of business. The business opportunity is very similar to that of the cable companies, a high bandwidth network being matched to bandwidth intensive customer requirements.Technology trends suggest that within the next few years, utilizing technologies made possible by computers and satellites, doctors will routinely perform what are now seen as "miraculous feats." Health care providers will be able to see patients at remote sites, using a desktop workstation or laptop computer in a mobile, wireless configuration. Included in current and future technology, on land and in space, are developments such as telepresence surgery, which is surgery performed by a distant physician with the help of a robotic arm. In this world of next generation tools, emergency medical technicians and nurses will resuscitate and operate under the guidance of a surgeon.Even the most gifted medical professionals have natural limits, but the use of technology to capture, expand, and project what they know, what they do, and how they do it, is not just titillating - it will shape our future. Simple technology will allow physicians to search libraries and download information in a heartbeat enabling them to apply that knowledge to patient care immediately. Telemedicine and telehealth put medical and health resources where they need to be -- near the patient.

Regardless of the technological possibilities, the advice of Perednia and Allen bears repeating. Providers embarking on a telehealth or telemedicine project should:
a) use the lowest cost and most conventional technology that will meet clearly identified needs;
b) make decisions about large scale implementation based on the services to be provided rather than he technology used; and
c) remember that telemedicine systems are simply one more method of providing needed medical services to patients and health care consumers.

In closing, "a miracle is supposed to be something beyond our comprehension, beyond our ability to duplicate at will. The concept arouses images of crutches of the cured hanging by the grotto at Lourdes, and Moses parting the Red Sea with a staff. These acts seem haphazard and bizarre, with symbolism, but no personal meaning for most people. In contrast, the appropriate and creative application of technology in the medical environment redefines miracle as an awesome inspiring feat that can be precisely duplicated over and over again for the benefit of each one of us."



Recommendation 1

The California Medical Association (CMA) should stress to the American Medical Association (AMA) the importance of modifying existing procedure codes and/or developing new procedure codes in the Official Medical Fee Schedule (OMFS) to facilitate reimbursement for telemedical services.

Recommendation 2

Healthcare associations should sponsor educational seminars for their members to provide information relevant to the planning, development, implementation and operation of telemedicine systems.

Recommendation 3

An appropriate health-related foundation should establish a home page for this final report on the Internet to serve as a resource to California's legislators, government agencies, civic leaders, health care providers, associations, foundations, educators, equipment manufacturers and vendors.

Recommendation 4

Specialty medical societies should develop standards for the appropriate use of telemedicine within each clinical discipline, following the lead of the American College of Radiology.

Recommendation 5

Medical schools and professional societies involved in providing continuing medical education should develop and implement curricula/programs/courses to ensure that health care professionals are informed enough to make determinations about the appropriate use of telemedicine.

Hospitals and Clinics

Recommendation 6

Hospitals should modify their medical staff bylaws to ensure that their peer review procedures include rules regarding the practice of telemedicine.

Recommendation 7

Health care entities should ensure, when assistance is sought in the telemedicine planning stages, that it is vendor-neutral, but when program implementation begins, a vendor should be chosen who is a full partner in the process.

Insurance Companies

Recommendation 8

Insurance companies should ensure that policies issued to provide professional malpractice and liability insurance for physicians and other health professionals include coverage for the practice of telemedicine.


Recommendation 9

Telemedicine practitioners should be certain that the physicians for whom they are providing telemedical services are licensed and in good standing with their respective medical boards and that they have professional liability insurance.

Recommendation 10

Consulting physicians should request a face-to-face consultation if they do not feel that they are being presented with adequate visual and sound quality, or if the patient's condition does not lend itself to a telemedicine consultation.

Recommendation 11

The practitioner should obtain appropriate informed consent. As with any procedure, the patient must be made aware of the potential risks and consequences as well as the likely benefits of the telemedicine consultation, and must be given the option of not participating in the telemedicine consultation.

California Government State Departments

Health and Welfare Agency

Recommendation 12

The Secretary of the Health and Welfare Agency should support development of and participate in regional forums on rural telecommunities to bring together potential telehealth and telemedicine partners.

Department of Health Services

Recommendation 13

The Department of Health Services is encouraged to participate in a federal project, partly funded by the Office of Rural Health Policy, to develop an evaluation instrument to measure the impact of telemedicine in rural areas. State or private funding should be used to support participation in this national evaluation because it will save the State of California the significant cost of developing a comparable evaluation tool.

Recommendation 14

The Department of Health Services should expand the scope of the California Healthy Cities Project to include resource information about community telehealth projects and technical assistance to unincorporated communities throughout the state.

Recommendation 15

The Department of Health Services should provide financial incentives to establish telehealth/telemedicine in rural and urban medically underserved areas, particularly through rural health grants to develop partnering among communities and the sharing of telemedicine information and resources.

Recommendation 16

The Department of Health Services should provide grants, waivers, and demonstration projects, for research to assess the clinical effectiveness of telemedicine and the programmatic administrative effectiveness of telehealth applications.

Department of General Services

Recommendation 17

Under the State of California Master Purchasing Contracts, the California Department of General Services should:
a) develop a plan to inform and educate eligible health care providers about their purchasing options for videoconferencing equipment;
b) encourage health care providers, who have the option of using the State of California Master Purchasing contract(s), to take full advantage of the State negotiated volume discounts to acquire videoconferencing equipment, and
c) include peripherals for telemedicine in contracts or modify contracts to allow them to be purchased.

Recommendation 18

The Department of General Services should inventory satellite downlinks throughout the State of California to avoid the unnecessary expenditure of public funds for communications equipment, and to ensure that current resources for distance learning are being used effectively and efficiently.

Department of Information Technology

Recommendation 19

The Department of Information Technology should seek opportunities to collaborate with and share resources among state agencies to optimize the investment in videoconferencing systems and state conferencing facilities.

Medical Board of California

Recommendation 20

The Medical Board of California should coordinate telemedicine licensure, credentialing and reimbursement policies with neighboring states.