As the use of telemedicine continues to make major inroads into the standard practice of modern health services, many hospitals and medical providers are still playing catch-up.
A lot of them are either beginning the process of implementing a system of their own or trying to piece together fragments that already exist. This can appear to be a very daunting task.
Therefore, in order to best help them achieve their goals, we need to understand every facet of the telehealth business model. To do this, we must first develop a telehealth business plan of our own that has concrete steps and follows a clear roadmap towards success that we can share with clients.
This telehealth implementation plan must also keep in mind requirements of the state and limitations of their internal networks as well as the potential for monetization to other clients or systems. In this article, we’ll provide concrete steps as well as references for further information.
Telemedicine Strategic Plan Template
In setting up a telehealth system, it’s often hard to know where to begin.
Fortunately, there is a very good planning document that is a great starting point for developing a telehealth implementation plan.
It was created and published by the Northeast Telehealth Resource Center (NETRC) and entitled Roadmap for Planning Development of Telehealth Services.
In the document they list a series of steps in what they believe to be the best overall structure for creating any telemedicine plan, which are:
- Evaluate needs. Take a look at your hospital or organization. What are you trying to accomplish? For example, are you trying to expand your existing telemedicine program or are you starting from scratch? Educate yourself on different approaches other hospitals have taken.
- Develop care services plan. Go over the needs of your telemedicine plan. Think about how and where patients and doctors will be located and what security measures will be implemented to allow only credentialed users. Also consider things like how scheduling, documentation, and billing will be integrated within the system.
- Develop a business plan and risk analysis. This is a step that is critical to the process but often overlooked. In fact, lack of planning is one of the top 10 reasons most businesses fail. It’s important to determine the level of service volume that will be the “break even” point between expenses and income. Assess the costs of the service as well as how it will offset expenses in other ways.
- Develop a technology plan. Using the information in steps 1-3, it’s time to contact IT experts to determine how this can be achieved. It is suggested that you shop around for vendors to get competitive bids; the technology used should be as cutting-edge as possible, but not so new as to be “bleeding-edge.”
- Train personnel. Now is the time to prepare staff for the upcoming changes to policies and procedures that come with the shift to telemedicine. Develop a program to teach the new software to doctors and medical personnel or find a specialist to help. This also includes training administrators and other staff to its uses and benefits.
- Pilot service. Once the build is ready, it is very important to have a limited rollout of the software to test for bugs as well as useability issues. Important questions to resolve are how long the trial will run, how many participants, and whether or not you will attempt reimbursement from the efforts.
- Evaluate outcomes. One of the most important things to consider is whether the telemedicine pilot program has met the same quality standards as face-to-face care. This can be done with a simple survey for both providers and patients at the end of the visit. A plan to measure long range outcomes of telehealth using data collected should also be created.
It is recommended to begin the telehealth upgrade process slowly by creating a planning group that can assess each of these steps in an abbreviated form before diving into all the details; they can then present their findings to the board.
This will give all the stakeholders a general idea of the feasibility of the implementation project as well as a general estimate of the costs. If necessary, adjustments to the scope and direction can be made at this time.
The complete NETRC Roadmap has 6 pages of steps and 24 pages of resources that include links to pdfs, web pages, and videos that go into much greater detail in every area. They include sections on planning guides, room design, program evaluation, and more.
Additional information can be found from:
Office for the Advancement of Telehealth
List of telehealth services payable under the Medicare Physician Fee
Other Telemedicine Business Plan Considerations
Another excellent overview is The Business Aspects of Telemedicine created by the Arizona Telemedicine Program. It has some Arizona-specific related content along with general ideas about revenue streams, expense considerations, and billing & reimbursement.
Other things that should be considered and included in your telehealth development plan are:
- Regional requirements
- Computer and network systems
- Monetization of software products.
Regional requirements
This is very important information to know about as each state has different demands regarding the management of private patient information as well as the creation of these types of software products.
Therefore, the first thing the developer should ask is “where are you located?” and make the necessary preparations from there. An excellent resource is the Center for Connected Health Policy’s State Telehealth Laws & Reimbursement Policies which has information for all 50 states as well as the District of Columbia.
Computer systems and networks
Another critical factor in the creation of a telehealth platform is the computer systems and networks it will be used on. The reality is many hospitals rely on very old computers that have slow processing speeds and very little memory.
Therefore, when creating this software, we need to make sure that graphics-heavy pages are rendered and assembled on the server; this will put less strain on older machines and allow them to access similar information as newer ones.
Monetization
Finally, let’s talk about making money from our hard work. We need to develop products for specific niches within the telemedicine system that are clearly defined as to who the end-user will be.
For example, if we are developing an entire MIS (medical information system), this reaches a more general audience, like a network of hospitals or an insurance agency.
However, if we are just developing a third-party add-on to an MIS such as video, then there is no need to spend time and money duplicating functions that already exist; the target market may also be smaller.
This must be taken into consideration and communicated to the marketing department, so they can help us reach out to the hospitals, doctors, and systems that will be receptive to and benefit most from our services.
Telehealth Business Plan: Cost Structure and Budgeting
The cost structure and budgeting of a telehealth system will depend on the number of functions you need, telemedicine equipment costs, and operation details.
We have created a sample table with industry pricing benchmarks that will give you a rough understanding of the expenses. Keep in mind that this cost structure is approximate, and your telemedicine business plan may be changed depending on your business needs.
Required resources Estimated budget
Telemedicine Platform License Usually, it’s a monthly fee, with the cost per file/patient.
Video conferencing and communication From $10,000
Networking equipment hubs, routers, switches, cables, and connectors From $1000
Telemedicine equipment From $10000
Telemedicine support $10000
Staff training From $200 per site
Security and privacy $20,000 – $40,000 for standard security
Post-launch maintenance $20,000 – $40,000 per year
Total Min: approx. $120,000-$150,000
Max: from $250,000
Here are other elements you need to include in your telemedicine business plan.
- Profit & loss statement
This should include projected revenue, operational costs, and service costs, as well as your expected net profit or loss.
- Cash flow statement
Cash flow statement includes billing invoices, payment receipts, loan payments, etc.
- Balance Sheet
Here, you should document your telemedicine business’s assets, liabilities, and equity.
- Break-even point
You reach the break-even point when business costs and revenue are equal.
This will help you create a revenue goal to make your business profitable or sustainable.
- Financing Needs
It includes the primary budget you need to start a telemedicine business. Include your short-term and long-term requirements and indicate how much investment capital you need to raise or indicate, if you might need a loan.
If you are interested in learning more about telemedicine and how S-PRO can help you develop a system for your practice or hospital, please contact us.
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