Health Care

America's health care system is in crisis. The cost of health care soars out of control. Nearly 50 million Americans, including 8 million children, live without health insurance.36 In 2006, U.S. health care expenditures grew 6.7 percent to $2.1 trillion, or $7,026 per person, and accounted for 16 percent of gross domestic product (GDP), greater than that of any other nation. Growth in health care expenditures is projected to rise 6.7 percent per year, far faster than wages, until the year 2017, when it will consume 19.5 percent of GDP.37

Yet Americans are not living as long as citizens of many other developed nations that spend far less on health care. Average life expectancy at birth in the United States is 78.1 years. In Great Britain, where medical costs are just 8.3 percent of GDP and the annual per capita expenditure on health care is slightly over half that in the United States, life expectancy at birth is actually higher - 79 years. In France, life expectancy at birth is now 80.3 years, yet the health care share of GDP is just 11.1 percent. In Japan, health care makes up only 8 percent of GDP and the average life expectancy at birth is 82.1 years.38

Many assert that Americans pay more for health care, yet are in fact less healthy. Consider that:

  • The U.S. infant mortality rate is 6.9 deaths per 1,000 live births, twice as high as Japan or Sweden.
  • About 70 percent of deaths and health costs in the United States are attributable to chronic diseases which are largely preventable. Yet, only half of recommended preventive services are provided to adults.
  • The United States has fewer practicing physicians and nurses per 1,000 people than comparable countries.
  • The obesity rate among adults is 30.6 percent, higher than any other developed nation, and 21 percent higher than second-place Mexico.39
  • Obesity among young people is near epidemic levels, causing large spikes in the incidence among children of high blood pressure, high cholesterol and painful joint conditions, and type 2 diabetes.40

Telecommunications technology such as broadband offers a tremendous opportunity to make America healthier and allow Americans to live longer, while at the same time saving our nation what some have estimated to be as much as $165 billion a year, enough to insure 37 million individuals, more than three-quarters of all uninsured Americans.41 Two of the most promising telecommunications applications that are already improving health care while at the same time reducing costs are "telehealth" and digital health information technology. Widespread adoption of these technologies will significantly stimulate both the build-out, and demand, for universal, affordable, and robust broadband.


Although doctors rarely make house calls anymore, traditional health care still relies to a large extent on the in-person visit of an ailing patient to a health care provider. But such in-person visits can be inconvenient, painful, costly, or sometimes simply impossible, especially for very sick, elderly, or disabled persons, or those living in rural or low-income areas where doctors and clinics are scarce. Patients with chronic conditions who require periodic routine monitoring also end up making repeated, expensive trips to their health care providers. Each of these personal interactions consumes the time and resources of not only the patient and provider, but of the overall health care system.

"Telehealth" - using telecommunications technology such as broadband in the provision of health care - is already revolutionizing medical treatment. Telehealth technologies now "remotely monitor patients, facilitate collaboration between medical professionals, exchange medical data and images, and instantaneously provide efficient emergency service to remote areas."42 Higher quality medical care is provided more conveniently to patients at a significantly lower cost, even while using America's comparatively slow broadband networks. Examples include:

  • Remote in-home monitoring of patients by health care professionals. In Pennsylvania, diabetic patients using a remote home monitoring system averaged hospitalization costs of $87,000, versus $232,000 for members of a control group who received only traditional in-person nurse visits.43 A Veterans Administration study reported a 40 percent cut in emergency room visits and a 63 percent reduction in hospital admissions resulting from its remote home monitoring system.44 Remote online monitoring on a daily basis of chronic illness, replacing periodic, weekly, or monthly trips to a clinic, is a particularly fruitful telehealth application, estimated to cut hospital, drug, and out-patients costs by 30 percent while delivering better quality care and quality of life.45 Over 90 million Americans suffer chronic illness, and 7 out of 10 deaths are related to chronic conditions. Studies show that remote monitoring decreased the length of hospital stays from 14.8 days to 10.9 days, office visits by 10 percent, home visits by 65 percent, emergency room visits by 40 percent, and hospital admissions by 63 percent.46
  • Better Medicaid care delivered with significant cost savings. A telehealth program in Alaska cut Medicaidreimbursed travel costs by 82 percent, while another in Arkansas saved millions in Medicaid costs and reduced infant mortality rates.47
  • Routine visits to overworked healthcare professionals are reduced while quality of care and quality of life are maintained or improved. In New York, health care providers using telehealth to manage congestive heart failure in home-bound patients experienced a reduction in overall health care costs of 41 percent. A reduction in these patients' physician office visits generated savings of more than $115 million annually.48
  • Improved access to medical specialists in under-served and remote areas. Georgia's REACH (Remote Evaluation of Acute Ischemic Stroke) program uses high-speed broadband to save the lives of rural patients, allowing doctors to conduct an examination of the stroke victim, determine the type of stroke, and prescribe the correct medicine all via video conference between the Medical College of Georgia's neurology department and 10 rural hospitals.49
  • Reduced travel to and among medical offices, clinics, and hospitals.
    • Each year, 2.2 million patients are transported between emergency departments, incurring transportation costs of $1.39 billion. Telehealth technologies could avoid 850,000 of those transports, resulting in cost savings of $537 million a year.
    • Correctional facilities make 94,180 transports each year to emergency departments at a cost of $158 million in transportation and visit costs. Telehealth technologies could eliminate almost 40,000 transports with a cost savings of $60.3 million a year. Of 691,000 physician office visits from correctional facilities at a cost of $302 million per year, 543,000 inmate transports could be avoided with a cost savings of $210 million.
    • From nursing facilities, 2.7 million transports are made annually to emergency departments at a cost of $3.62 billion. Telehealth technologies could avoid 387,000 transports with a cost savings of $327 million. Of the 10.1 million physician office visits made annuallyfrom nursing facilities at a cost of $1.29 billion for in-person physician office visits and transportation, 6.87 million transports could be avoided with a cost savings of $479 million.50
  • Widespread, low-cost dissemination of health information to patients and consumers. At least 75 percent of Americans with access to the Internet search for medical and health information online. On an average day, one in nine of those with a broadband connection uses it to research online medical information. Patients are able to network with each other and exchange information online about their conditions.51
  • Easier access to medical second opinions. Online second opinion services offer patients the opportunity to receive a second opinion from medical specialists at prestigious institutions based on the medical records that they fax, mail, or send via the Internet. "In about 5% of the cases, we actually change the diagnosis of the patient. In 85% to 90% of the cases, we alter the treatment," says Jonathan Shaffer, managing director of e-Cleveland Clinic. "What we are able to do is give the patient more treatment options and hopefully give the patient more peace of mind."52
  • Substantial savings with a better quality of life for seniors and persons with disabilities. For the 70 million American seniors and persons with disabilities, telehealth technologies are estimated to generate substantial savings from lower medical costs, lower costs of institutionalized living, and generate additional output by more seniors and individuals with disabilities in the labor force. The cost savings and output gains total at least $927 billion over the 25-year period from 2005 to 2030. This amount is equivalent to half of what the United States currently spends annually for medical care for all its citizens.53

Telehealth could also play a dramatic role in attacking America's epidemic of childhood obesity and improving the health of millions of American children. The rate of obesity for those among ages 6 to 19 has more than tripled. Over one-third of the children aged 2 to 5 in affluent Loudoun County, Virginia are overweight. In some lower income wards in nearby Washington, D.C., nearly half of all schoolchildren and pre-adolescents are overweight. It costs three times as much to treat a child with obesity as an average child. The nation's bill of care for overweight youth is $14 billion annually. Yet our health care system has been reactive, treating the high-cost symptoms of obesity, including high blood pressure, high cholesterol and painful joint conditions, and a huge spike in cases of type 2 diabetes, rather than proactively addressing the environmental root causes of the problem.54

Using telehealth applications, patients and their caregivers could:

  • Access educational information and applications to attack the environmental root causes and promote early intervention through online nutritional planning, healthy menus, calorie counters, and other proactive healthy-living tools at any time of the day or night;
  • Video conference with online dieticians or other professionals, and have recurring physical checkups conducted remotely, thereby avoiding inconvenient and costly trips to clinics or doctors' offices for evaluation and treatment of their chronic condition;
  • Participate in online exercise regimens individually tailored to their particular cases at times when they are not in school or at work;
  • Shop at a "virtual" online grocery store that keeps track of calories and nutritional needs, then creates a healthy shopping list and prints it out for the patient to take to the real store; and
  • Meet with mental health professionals and/or other obese youths in online counseling, support, and therapy sessions.

As technology improves and bandwidth increases, telehealth applications will deliver even more revolutionary advances in treatment, while substantially reducing costs. Today, in Japan, much of the nation is wired with superior high-speed fiber technology providing symmetric 100 Mbps bandwidth that is 8 to 30 times faster than most broadband connections in the United States. Such robust broadband enables pathologists at a large, urban hospital to treat patients in rural areas using high-definition video and remote-controlled microscopes that give sufficient richness of detail to enable a doctor to "make a definitive remote diagnosis of cancer." It also enables pathologists to see patients much more efficiently in a nation with a severe shortage of pathologists.55

Jim Baller and Casey Lide illustrate how the potential of telehealth in America is constrained by our nation's comparatively slow broadband:

Under the FCC's former definition of "broadband" (200 Kbps), it would take nearly a full day to download a 10 minute diagnostic video clip. At current DSL speeds, it would take almost three hours. Moreover, because DSL and CMS are typically asymmetric - i.e., upload speeds are much slower than download speeds - it would take much longer than three hours for the patient or his local doctor or health care facility with only DSL or CMS to upload the images to forward them to the reviewing health care facility. With a symmetric 100 Mbps broadband connection, it would only take three minutes to transmit the video clip.56

Unfortunately, most of America does not have access to broadband connections that are fast enough to enable these or other bandwidth-intensive telehealth applications already in widespread use in other countries with superior broadband.57

Health Information Technology

Today's health care system is widely fragmented and hugely inefficient. Patients may be treated at multiple locations by multiple doctors who keep multiple paper records and fill out multiple paper forms seeking reimbursement from multiple insurance carriers. These inefficiencies not only lead to higher costs, they also result in poorer quality health care. Consider these statistics compiled by the Business Roundtable, an association of CEOs of leading U.S. businesses:

  • As many as 98,000 people each year die unnecessarily because of preventable medical errors, more than die of breast cancer, AIDS, or motor vehicle accidents. One-fifth of these errors are attributable to the lack of immediate access to patient health care information.
  • Nearly one in three Americans will experience a medication error in their lifetime. Approximately 1.5 million medication errors occur in hospitals each year. There are 2 million outpatient drug errors each year, and the error rate is forecast to increase to 3 million in 2020 and 3.7 million in 2030.
  • Between 2003 and 2004, 22 percent of sick adults in America were sent for duplicate tests by different health care professionals.58

Numerous quality-of-care and quality-of-life benefits will result from the widespread adoption of digital Health Information Technology (HIT) - uniform, interoperable technological standards that will network and digitize our health care system so that its fragmented parts can communicate with each other via broadband. According to the Business Roundtable, full implementation of HIT will:

  • Empower patients to better monitor their own care and lifestyle habits, and to interact with health providers.
  • Improve the management - and thus lower the cost—of chronic illnesses, since early and consistent treatment delays the onset of many symptoms.
  • Enable people who live in under-served communities to gain access to treatment that they otherwise might not receive, given the lack of adequate numbers of health professionals and facilities in rural areas and the inner city.
  • Engage children of aging parents (who may have to travel long distances to help care for their elders) to remotely participate in decision making and monitoring, using real-time video, voice, images, and data exchanged and conferenced among patients, care providers, and families.
  • Introduce security and privacy protocols not possible under the current paper-based system.
    • With paper-based systems, anyone who can open a filing cabinet can view sensitive patient information (and even copy and distribute it), then return the papers without detection.
    • HIT establishes a firewall around patient data, requiring passwords and permission to gain access, and leaving an audit trail of who accessed the data, when, and why.59

HIT delivers these significant qualitative benefits while substantially reducing the cost of health care. In 2005, a Rand Corporation study found that savings and efficiencies from the elimination of duplicate or unneeded lab tests and radiology screenings, better time management by health care professionals, the elimination of unneeded drugs, and other inefficiencies totaled $81 billion a year in overall cost savings in the American health care system.60 The Business Roundtable noted:

  • This translates to $670 per household per year. For the median family in America, this would represent 25 percent of their total annual out-of-pocket outlays for health care.
  • With the benefits of improved health outcomes included, the total savings could be as much as $165 billion a year, enough to insure 37 million individuals, more than three-quarters of all uninsured Americans.61


The new Administration should employ broadband to provide better quality health care and quality of life, at a significantly reduced cost.

  1. Direct the Secretary of Health and Human Services to:
    1. Define and catalog the types of entities that govern, oversee, operate, and/or create policy for the electronic exchange of health information and produce recommendations regarding the appropriate level of consumer participation and requirements for transparency that should apply to them;
    2. Require institutions and providers to begin sharing health information electronically;
    3. Set standards for electronic exchange of health information; these standards should focus on:
      1. Quality improvement
      2. Care management
      3. Billing
      4. Decision support
      5. Performance data reporting
      6. Research and population health initiatives, including disparities reduction efforts
    4. Set standards for federal health information security and confidentiality; standards that should be guided by the following consumer-control principles:
      1. Consumers should have easy access to review, add notations, and suggest corrections to existing information in their own records.
      2. Consumers should be able to limit which parts of their health information can be shared with which providers.
      3. Consumers should be able to limit how their personally identifiable medical information is used outside of care delivery (e.g., for research..
      4. Consumers should be able to easily designate others as proxies to act on their behalf (e.g., family member, caregiver, or guardian).
      5. Consumers deserve an effective process and infrastructure for monitoring and certifying compliance with these common principles among organizations, initiatives, and technologies.
    5. Encourage and facilitate the adoption of state reciprocity agreements for practitioner licensure to expedite the provision across state lines of telehealth services;
    6. Expand the list of Medicare telehealth-originating sites to include mental health facilities;
    7. Include as a home health visit for Medicare purposes telehealth services furnished to an individual by a home health agency;
    8. Establish a demonstration project to evaluate the impact and benefits of covering remote patient management services for certain chronic health conditions;
    9. Acting through the Director of the Office for the Advancement of Telehealth of the Health Resources and Services Administration, make grants to expand access via telehealth to health care services for individuals in medically underserved rural, frontier, and urban areas;
    10. Work with health plans, employers, HIT vendors and others to create and maintain a centralized resource center of grants, loans, insurance savings opportunities, incentive programs, and other financing options for HIT for providers;
    11. Establish a consistent methodology for measuring telehealth and health information technology adoption and effective use, and analyzing and reporting data; and
    12. Allow for electronic prescribing of controlled substances, with appropriate safeguards.
  2. Modernize Medicare to facilitate telehealth service:
    1. Remove Medicare's current geographic restrictions on the provision of telehealth services.
    2. Expand the types of facilities authorized to participate in the Medicare telehealth program.
    3. Allow for the provision of coverage of remote patient management services, including home health remote patient management services, for certain chronic health conditions.
  3. Reauthorize telehealth network and telehealth resource centers grant programs.
  4. Establish within the Department of Health and Human Services an Office of the National Coordinator for Health Information Technology and the Health Information Technology Resource Center to provide assistance for the adoption and use of interoperable health information technology.
  5. Allow the Centers for Medicare & Medicaid Services to make federally qualified health centers eligible to participate in demonstration projects related to health records and heath information technology.
  6. Allow the Internal Revenue Code to treat qualified health care information technology as a depreciable asset.