Director's Message -
Telemedicine Economics

The Arizona Telemedicine Program was created in 1996 as a ground-breaking partnership between the Arizona State Legislature and the Arizona Health Sciences Center in Tucson. Since then, the 8-site pilot project has evolved into one of the largest and most successful comprehensive telemedicine programs in the world.

Today, the Arizona Telemedicine Program, in collaboration with the Arizona Regional Behavioral Health Authority Telemedicine Network (RBHAnet), operates a remarkably cost-effective broadband telecommunications network that links over 150 sites and saves the State of Arizona hundreds of thousands of dollars. In a remarkable example of pooling of scarce health care resources, over 50 health care organizations in Arizona, from the public and private sectors, use the network, benefit from a state-wide telemedicine training program, and participate in University-based distance education programs. Arizona benefits from carefully planned telecommunications and telemedicine equipment and facility interoperability standards that are unprecedented in any other state.

The benefits of telemedicine to patients in Arizona are now well established. Over 275,000 Arizonans have received health care services by telemedicine. Quality of services is high and routinely accepted by both service providers and patients. Services are available in 60 subspecialties of medicine, surgery, pediatrics, psychiatry, radiology, pathology, and many others. Over 100 telephysicians and telenurses have provided services over the network.

The economics of telemedicine are especially noteworthy. For example, over a million dollars were saved by the Arizona Department of Corrections by avoiding costly transports of prisoners to regional medical centers. Over a hundred thousand dollars have been saved reducing the need for psychiatrists to travel to dozens of rural communities. Reduced air transports of patients injured in automobile accidents have saved additional hundreds of thousands of dollars. The delivery of specialty services into underserved areas has saved lives; it’s impossible to put a dollar value on saved lives.

That’s just part of the story. When the Arizona Telemedicine Program was established in 1996, the Arizona State government was struggling to find a way to extend broadband telecommunications to rural communities for health care and education. A group of University employees of the Arizona Telemedicine Program addressed this seemingly impossible challenge and came up with the idea of establishing a University-operated telemedicine telecommunications collaborative. They designed the telecommunications system in a configuration that minimized telecommunications charges, installed all of the telecommunications equipment, and operate the entire network with enormous cost-savings for the state. Today, the Arizona Telemedicine Program Network is the envy of many other states and the level of cooperation of the network members is simply unprecedented.

The telecommunications cost savings are realized in a number of ways. First, there is the cost-sharing of the infrastructure as well as time-sharing of valuable broadband telecommunications capacity. By having physicians at the Arizona Telemedicine Program establish priorities on a daily basis, health care quality of service guidelines are met while freeing up time for distance education and administrative meetings.

Telecommunications costs are also addressed by maximizing federal rebates for telecommunications expenses. The U.S. government offers a rebate program, called the Universal Service Fund Program, but unfortunately discourages participation by creating a bureaucratic nightmare of an applications process for the rebates. The Arizona Telemedicine Program addressed this bottleneck by centralizing the application process. To date, over $4,300,000 have been returned to Arizona’s health care organizations. In 2004, Arizona was number one in the lower 48 states in terms of rebates (Alaska has a very large telemedicine program), a major success story of the Arizona Telemedicine Program. Many states simply leave the money on the table.

Finally, by placing the Administrative Center of the Arizona Telemedicine Program at the State’s only College of Medicine, the Arizona State Legislature encouraged the development of one of the largest telemedicine academic programs in the country. The Arizona Telemedicine Program has emerged as an invaluable academic asset. Today, investments in telecommunications infrastructure can be as productive as investments in bricks-and-mortar in the past. The Arizona Telemedicine Program, and members of affiliated programs, have successfully competed for grants and contracts totaling over 14 million dollars. Spin-off companies have been incorporated and many patents are in the pipeline. Telemedicine grant and contract programs have created new jobs in Arizona. The Arizona Telemedicine Program staff leads the nation in numbers of publications in professional journals. Many other countries are turning to the Arizona Telemedicine Program staff for guidance in developing international telemedicine programs and international telemedicine is becoming yet another source of revenue for the state.

In 1996, Representative Robert “Bob” Burns (R-Glendale), now Senator Burns, had the idea that the newly emerging field of telemedicine could play a role in addressing health care issues in Arizona. He enlisted the assistance of budget analyst John Lee of the Joint Legislative Budget Committee and together they developed a plan to create the Arizona Telemedicine Program. At the recommendation of the Program Director, they established the Arizona Telemedicine Council to provide oversight for the program. The Council has met quarterly on the Arizona State Capital Campus since 1996 and Senator Burns has attended every meeting. His vision, leadership, and skillful mentoring of the University-based Arizona Telemedicine Program staff are major factors for the success of telemedicine in Arizona. As past President of the American Telemedicine Association, I have visited many telemedicine programs in other states and countries. I know that we are fortunate to have a special relationship between our legislative leaders and the telemedicine programs in Arizona. This provides the foundation for the remarkable success of telemedicine in Arizona.

Ronald S. Weinstein, M.D. Director,
Arizona Telemedicine Program

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