Oklahoma’s public services commission seeks limits on free bandwidth to rural non-profit hospitals

Rapid expansion in the use of telemedicine, telepathology, and similar digital data applications is creating an unexpected problem. The cost of the bandwidth required to support these services is growing at an equally fast pace!

In Oklahoma, the increased cost of supporting telemedicine services is busting the budget of the state’s decade-old Universal Service Fund (OKUSF). That is causing regulatory bodies and the Oklahoma state legislature to look for solutions to this growing problem. For example, The Oklahoma Corporation Commission (OCC), which regulates public service corporations in that state, is seeking to limit the amount of free bandwidth available to rural non-profit hospitals under existing state law.

Medical laboratory testing is contributing to the higher spending on telemedicine services by Oklahoma’s USF. Chris Herbison, who is a Public Utility Regulatory Analyst at the OCC, told Oklahoma lawmakers during a hearing on this issue that the change in the size of telemedicine files has been dramatic. There has been a significant increase in the size of both medical reports and clinical laboratory reports. Similarly, whereas it once was basic X-rays, now it is MRIs and other types imaging files. All of these larger data files require more broadband capacity.

In Oklahoma, the rapid growth in the use of telemedicine, telepathology, and the digital transmission of other forms of patient data, including ever-larger clinical laboratory reports, has greatly increased the cost of the broadband services needed to transmit this data. Lawmakers in that state are challenged to fund a solution to provide adequate funds for the state-subsidized Internet lines for rural hospitals, public schools, and libraries. (photo by www.ok.gov.)

In Oklahoma, the rapid growth in the use of telemedicine, telepathology, and the digital transmission of other forms of patient data, including ever-larger clinical laboratory reports, has greatly increased the cost of the broadband services needed to transmit this data. Lawmakers in that state are challenged to fund a solution to provide adequate funds for the state-subsidized Internet lines for rural hospitals, public schools, and libraries. (photo by www.ok.gov.)

The practical problem for lawmakers is that the cost of broadband for this subsidized service is outrunning the money earmarked to pay for it. “A fee is charged to Oklahoma phone customers to pay for the cost incurred by mostly rural nonprofit medical facilities to send large medical files over the Internet,” reported NewsOK.

Growing Telemedicine Services Increases Demand for Broadband

In 1997 Oklahoma authorized a state Universal Service Fund (OKUSF), partly to fund free Internet access lines for rural nonprofit medical facilities. At that time, telemedicine files consisted primarily of basic X-rays and only about $20 million was needed, stated Herbison at a hearing of the Oklahoma House of Representatives Energy Committee. The problem is the growing size of digital files used in medicine.

The cost of transmitting medical information in Oklahoma that was funded by the OKUSF was $28 million in 2009. In 2010, that cost skyrocketed to a whopping $52 million, according to Herbison. Over one-third of that figure is attributable to telemedicine costs, she stated.

Current Oklahoma law requires the OCC to approve the amount of Internet and telephone service used by eligible entities, explained Dana Murphy, Chair of the OCC. “Eligible entities” include rural non-profit medical centers, public schools and libraries.

According to OCC officials, the telemedicine component is the main reason the Oklahoma USF is so much larger now than when it started, reported Oklahoma Watchdog.

Telemedicine Increases Revenues For Rural Laboratories

Telemedicine is very important for rural [hospitals], Patti Davis, Executive Vice President of the Oklahoma Hospital Association stated in the Watchdog.

In addition to improving quality of healthcare, studies show that telemedicine has a positive impact on rural economies. For example, a 2007 study found that an increase in clinical laboratory testing is a financial impact that directly benefits the local economy. For rural hospitals, even a small number of telemedicine encounters can dramatically increase local medical laboratory revenues.

Oklahoma’s challenge to fund the ever-growing cost of telemedicine services utilized by rural hospitals is a microcosm of the larger telemedicine market in the United States. Experts predict explosive growth in the digital transmission of patient data. This is an expected outcome as health systems integrate both clinical services and the informatics which connects all the providers within their organization—including clinical laboratories. Add to this mix the growing number of health information exchanges which are becoming operational, and it is easy to understand why telemedicine—and the associated costs of the broadband services needed to support it—will be a fast-growth sector of healthcare in coming years.

—Pamela Scherer McLeod

 

Related Information:

Oklahoma Legislative panel hears of skyrocketing telephone, cellphone fees

Tighter reins on telemedicine phone fee sought

$37-million fund paid for through phone fees has never been audited

The Economic Impact of Telemedicine Capability in a Rural Hospital (PDF REPORT)

The Dark Report: Recent Telepathology Coverage

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