Government Technology

Will Rural Health-Care Providers Pay More for Broadband?

January 3, 2013 By

A new order released by the FCC in December will expand broadband access for some health-care providers. But the program may also hamstring the use of telemedicine by doctors who will need to pay more out of pocket to get online.

Called the Healthcare Connect Fund, the program will subsidize 65 percent of broadband costs for participating providers. That’s down significantly from the 85 percent subsidy in the FCC’s existing Rural Health Care pilot program, which was established by the 1996 Telecommunications Act.

In an interview with Government Technology, Eric Brown, president and CEO of the California Telehealth Network (CTN) — an organization that works with stakeholders to establish broadband connectivity for communities to improve the quality of health care — called the change an “obvious concern,” as some providers will not be able to pay the 35 percent contribution as the Healthcare Connect Fund requires.

Brown explained those members of CTN that have a 1.5 Mpbs T1 connection pay roughly $62.50 per month under the Rural Health Care program. If additional subsidies can’t be found, those same health providers will be paying approximately $200 per month for the same connectivity under the Healthcare Connect Fund.

Approximately 50 broadband pilot projects comprising single practices and consortia are currently funded by the Rural Health Care program.

Citing a study conducted by the California Health Care Foundation in 2012, Brown said many rural health clinics and critical access hospitals are not cash flow positive and are in very precarious financial positions. He believed the uptick in broadband expense would make their situations even worse.

“Anything that would require them to come up with more cash for reoccurring broadband expenses and the like, in addition to a lot of the financial demands that they face … makes it a very difficult environment for them,” Brown said.

When contacted by Government Technology about the funding disparity, FCC spokesman Mark Wigfield referred to a statement by FCC Commissioner Mignon Clyburn, who called the order establishing the Healthcare Connect Fund “momentous” and builds on the successes of the Rural Health Care program.

Clyburn’s statement didn’t address the issue of increased costs to be incurred by health-care providers, however. She instead focused on how the Healthcare Connect Fund will avoid wasteful spending and require competitive bids for broadband services and infrastructure.

In addition, the commissioner said both consortia and single sites can apply, and believes the proper balance of rural and urban practices has been struck, as the order requires more than 50 percent of the consortia must be from rural locations.

The FCC order implementing the program reforms includes a $400 million annual cap on the amount of support available through the Healthcare Connect Fund. Funding for existing broadband sites will be available later this year. New entrants to the program can expect funding on Jan. 1, 2014.

Brown emphasized that the expense under the Healthcare Connect Fund is still favorable when compared to the $600-$2,000 per month range for broadband access that some doctors are looking at without the program. But while “still a great deal,” Brown hopes supplementary funding can be found to ease the financial burden.

“It’s going to be a significant increase in what those sites are going to pay,” Brown added. “It’s not coming at the best time when there are all these other competing uses for the few precious financial resources they have.”

Nursing Expansion

Among the expansion elements of the Healthcare Connect Fund is the inclusion of skilled nursing facilities, more commonly known as nursing homes or rest homes. As part of the fund, the pilot project will allow nurses in rural rest homes to have more convenient access to doctors in more urban areas. Up to $50 million over three years will be available out of the fund for the pilot.

In a statement announcing the fund, FCC Chairman Julius Genachowski said enabling broadband access for nurses could help patients and save money through potential earlier discharges from hospitals or to get more focused care closer to their homes.

Genachowski gave a number of potential examples of how broadband connectivity will aid skilled nursing facilities. He said from patients recovering from open heart surgery in rural Virginia who could get evaluated from afar, to a small town resident that can have chest x-rays sent to a doctor in another location, consultations through technology can save ambulance trips or emergency room visits.

Brown said the addition of skilled nursing facilities as a pilot project was a “big deal” for many of the CTN’s members that have those facilities in close proximity, but up until now, were not able to serve them. He said that will change as various nursing homes and similar facilities are enrolled in the pilot.

Clyburn added that if the skilled nursing facilities program is supported and becomes a permanent to the Healthcare Connect Fund, it will give patients that are too sick to stay home, but not ill enough to be admitted to a hospital, more diverse choices in care.

“Broadband is especially useful for these facilities, as it permits a doctor to be virtually present, and offers patients and their families’ increased peace of mind,” Clyburn said in a statement.

Photo from Shutterstock

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Numbers Wrong    |    Commented January 4, 2013

The prices cited as being the provider's portions can't both be correct. If $62.50 is 15% then the total price is $416.67, but if $200 is 35% then the total price is $571.43. That would make the increase look larger than it really is. If you use the original value for the total cost of $416.67, the new higher cost comes out to $145.83. $200 is approx. 37% higher than the correct number (assuming the original figure of $62.50 is correct).

DMReitz    |    Commented January 4, 2013

At either $62 or $200, a provider ought to be able to easily recoup that expense with use of that pipe. Expensive part is probably getting images/video onto the broadband - sharing data never costs as much as aquiring it to begin with. Oh, and you have to read and understand the 242 page FCC order and figure out how to apply.

ablewis    |    Commented January 4, 2013

The problem isn't the amount of the subsidy, the problem is how much these private providers are charging for a slow 1.5 Mbps connection. Just another example of telco welfare.

DMReitz    |    Commented January 4, 2013

ablewis - Broadband can be provided by satellite, wireless, CATV, or telco. I imagine each type of provider sets the price at a point which maximizes profit - not a ridiculously high amount which results in no sales, and everyone going without or using another solution, nor so low that they take a loss on each sale. Disclosure - I work for one of those telcos, which continue to pump increasing amounts of data across the same copper wires which used to only deliver 2400 baud, and do it with union employees with good wages and great benefits.

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