Expenses - Monetary Cost Factors

Analyzing the costs of telepathology, first of all the monetary one-time expenditures for equipment and systems (purchase price or development costs) have to be considered. Then the recurring expenditures for network services, maintenance, or personnel (cost of the pathologist’s time - both the referring pathologist, who selects the images, and the consult-ant pathologist’s time viewing the transmitted case) have to be added to the calculation [O’Brien, 1998, p. 157; Poremba, 1998, p. 323; Heckermann, 1997, p. 25]. These direct cost factors have to be enlarged by intangibles such as time spent learning how to use a new service, or inconvenience to health care providers when they must take time out of a busy schedule to leave their offices to use the new service [Williams, 1995; Moore, 1995;

Grigsby, 1995/(1), p. 26;]. Giving examples of costs, these are always converted into US-$.

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Yet, the given totals can only be taken as approximate values, since prices vary frequently due to currency variations and changed prices.

On the benefit side the most obvious savings associated with telepathology are lower travel expenses or less time taken for diagnoses. It has to be calculated, whether the use of tele-medicine systems costs less than flying doctors all over the state or to transport specimen samples. Vice versa one also can regard how much it costs the patient to drive to the spe-cialist, to take a day off from work, paying for lodging and meals? Or how much it costs that the patient is treated at a specialized hospital, instead of a cheaper local one. Unfortu-nately various benefits of telepathology systems are currently not included in monetary cost calculations. In addition, there sometimes occurs the paradoxical effect that first, the direct medical expenditures of an organization increase, while the monetary savings appear at other segments of the economy [Perednia, 1995/(3)]. Altogether many of the replying users or non-users of telepathology at this study recognized reduced travel effort and the reduced risk for the pathologist of ‘being killed on the road’ as an important argument for

telepathology introduction.

When estimating whether telepathology is cost-effective as a diagnostic tool, one has to ask for the relative utility of a telepathological consultation, compared with a conventional consultation [Bashshur, 1996, p. 80]. Doing so, the total cost of telepathology should be seen as a function of service (intensity of usage) and price of units or service.

Costs of Telepathology

System acquisition costs Acquisition costs compared to calculated time of utilization (ROI - return on investment) - e.g.

· cost for system/software, microscope, hardware, etc.

· cost for rebuilding of rooms, cost to lay cables and other infrastructures

ISDN connection cost per month Line rate per month

Connection rates x minutes of connection time

Operating costs. Costs for laboratory materials (e.g. for staining, cutting, ...), rent, power, etc.

+ cost for occupied equipment, e.g. if operation theatre is occupied till result is available)

Maintenance costs Repair work (material and time)

Maintenance service fee per month

Education and training time (salary x time) Consultant: training to execute diagnoses on the screen, time to handle the system, etc.

Client: time to learn to do macroscopy, preparation, and the system handling.

Time to get system ready and to finish the

telepathological process (salary x time) Preparation time: time to go to the room where the system is located, log-on time, focus time...

Follow up handling: time for documentation, for back-ups, archiving, etc.)

Labor costs (incl. waiting time, during which the staff is not able to fill it with other work) (salary x time)

Cost for:

· pathologist / surgeon / medical technician (client)

· telepathologist (consultant)

· operation theater team

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Costs of Conventional Pathology / Savings

Acquisition costs / investment costs for conventional equipment Equipment maintenance costs Repair costs, maintenance service Transportation costs Cost for transportation (time and money)

· cost to sample transfer

· cost of pathologist to go to a distant place

· cost of the patient to go to a distant location Processing costs (salary x time) Material cost (e.g. glass slides, color, etc.)

Labor costs (incl. waiting time, during which the staff is not able to do other work)

· driver’s time

· pathologist’s time

· surgeon’s and operation theatre team’s time Cost Reduction Potential

Faster diagnosis process salary x time

Less double examinations cost of examinations

Optimization of patient’s treatment time · faster operation time, faster therapy,

· shorter stay in a hospital - saved treatment costs per day / service

13.4.3.1 Cost of Network Usage

One major problem in telepathology is the price for data transmission. In many rural com-munities, prices for network usage is unusually high⁷², distances between consulting facili-ties are great, and sometimes there is even no local access to the Internet.

That is why many telemedicine projects reported problems with high inter tariff rates.

Remote sites even sometimes face the situation that the price of long distance telephone services, which cross local service area boundaries, is less than that within the local service area they have to apply to [Puskin, 1995/(1), p. 62]. The lack of adequate telecommunica-tions infrastructure forces projects not only to pay for installation of the line, but also to purchase the whole line on a 24-hour basis for service at very high costs. Such pricing structures, which do not provide for the purchase of bandwidth-on-demand or which require the purchase of whole telecommunication lines to obtain any advanced service, often place telemedicine services out of the financial reach of many small communities [Puskin, 1995/(2), p. 126; Weinberg, 1996/(1), p. 833]. It would be from great advance if it is

possible to modify telenet capacity requirements in accordance with the desired service used, in order to achieve cost efficiency [Eide, 1994, p. 887]. In some countries a further problem is the disproportional high price for broad-band connections. As it has already be mentioned,

72Examples for Transmission Rates [Klutke, 1997]:

Multi point connection - fee per hour (each participant pays for his connection)

Point to point connection - fee per hour (client pays for connection)

* the amount of US-S is an approximated average value.

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telephone lines are available and cheap, but do mostly not offer a satisfying transmission speed, especially at dynamic systems. Another factor for high transmission costs is that small rural telemedicine networks and users lack sufficient market power to negotiate favorable rates and services from telecommunication providers [Flaherty, 1995/(2)].

How could the problem of transmission cost be diminished? One important possibility is that telemedicine providers could access and pay only for as much transmission capacity as they need [Puskin, 1995/(1), p. 62; Moore, 1995]. Another is cost-sharing among multiple users to increase market power. Further telemedicine system users could negotiated special contracts with network providers, to reduce network costs. Unfortunately sometimes state laws include prohibitions on discrimination through special rates or services and therefore do not permit incentive prices for telemedicine.

Transmission costs are depend on the capacity of the network used and on the image size / file volume transferred (resolution of images, amount of images). To lower the duration of communication, images should be compressed [Grigsby, 1995/(1), p. 23; Marsan, 1995, p. 341]. Further it is to recommended that telemedicine users employ the most efficient technology for their telemedical applications because equipment and communication costs are directly proportional to the amount of information to be transmitted [Allaert, 1999;

Perednia, 1995/(3); Eide, 1994, p. 882]. Still images could be acquired and transmitted during non-peak hours at a lower rate for review by a specialist - a viable and less costly way of providing telepathology services when real-time interaction is not necessary.

Fortunately many telepathology approaches are running on reduced network costs with special discount rates for telemedicine. In Iowa (USA), even a state-owned fibre optic net-work, the Iowa Communications Netnet-work, can be used for telemedical data exchange, which cut down the cost for a two-way videoconference from US-$400 per hour of com-mercially networks down to US-$10 per hour [Shoor, 1994]. In Austria, university hospi-tals use the academic metropolitan area network with a transfer rate of 2-10 Mbit/s. The usage is free of charge for university institutions. An opposite example is Australia. There the ISDN services with data capacity of only 64 kbit/s are not free of charge and very expensive [Giacomuzzi, 1998, p. 41]. Fortunately the competition on the network market increased during the last decade, so that network costs are slowly becoming cheaper.

13.4.3.2 System’s Utilization

The volume of patients receiving care through telemedicine systems is quite low. Many well-established programs are reporting between one and five contacts per week, and in some cases there are remote sites that have rarely or never used their system, even though it is readily available. Also users of telepathology systems at this study mentioned the low level of utilization as a problem. The low utilization rates seem to be a function of two major factors; lack of reimbursement (if physicians do not see advantages, they deny usage), and providers’ resistance to use telemedicine [Grigsby, 1995/(1), p. 24; Perednia, 1995/(3)].

Overall one can say that it is a waste of resources, if telemedicine systems - even if they are available, are unused. In disaster situations it is essential that resources are managed and shared at their optimum [Anonymous, 1999/(1), p. 9; Dietzel, 1998, p. 29]. However, tele-medicine applications should not just be a tool to overcome disaster situation, but a possi-bility to optimize overall health care resources and by this reduce health care expenses.

Well developed health information infrastructures and systems that allow a seamless

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nection and interoperability between health care resources, may have profound contribu-tions to medical cost savings, access, and quality of care [McDonald, 1995].

High capacity rates are desirable to distribute the enormous human and capital costs in-volved in start-up of telemedicine systems [Wyman, 1994]. To overcome the situation of low system’s usage, some argue that for telemedicine services to reach their full potential, smaller rural communities should develop a consortium of users within each facility (e.g.

radiology, pathology, dermatology). If some broadband video conference systems (e.g. tel-eradiology) are already installed, additional specialties like telepathology applications could be added. In this way a value added effect and an optimized service could be reached without moderate additional costs [Schwarzmann, 1995, p. 213; Puskin, 1995/(1), p. 64;

Steffen, 1997/(2), p. 28]. As an example of the telemedicine approach, at the Azores Islands employed video-conference stations used for several telemedicine services. The systems were kept quite simple. The video-conference station, working with ISDN, just had to be switched either to the video-camera of the microscope for pathology, to the video-camera on an illumination stand for telecardiology, to an endoscope camera for tele ORL, or to the video output of the echograph for tele maternal and foetal health care [Goncalves, 1995/(2), p. 287]. A similar multi-service design was set up between the expert in Innsbruck/Austria and Reutte [Mairinger, 2000].

Utilization could further be enhanced by creating systems that can be used for a variety of medical purposes, e.g. for diagnostic, education or medical discussions. Another possibility to enhance rate of telemedicine capacity utilization is to find new participants by more in-tensive cooperation attempts, and by exin-tensive information and marketing activities to make telemedicine known. Systems would also achieve additional benefits by incorporat-ing connectivity to existincorporat-ing clinical information systems [Wyman, 1995]. Even alliances with external business units may help to increase capacity rates. That is why the

St. Vincent Marten House Hotel and conference Center is not just used by the hospital, but by other business communities too [Kaiser, 1994; Anonymous, 1994]. This revenue-gener-ating system sharing will help telemedicine providers to cover its portion of the ongoing operational costs for the network after the trial period and to ensure that an investment pays for itself. Talking about revenues, since many telemedicine services are not reimbursed, this may be another elementary reason that the incentive for telemedicine services is low.

Fortunately the current consultants are mostly pioneers, who wish to use their systems.

Nevertheless the lack of reimbursement will not be a factor to support for an enhanced utilization of systems.

13.4.3.3 Cost of Systems Compared with User’s Need

There are many possibilities to minimizing costs through the use of less sophisticated tech-nologies, yet it appears that the decision makers of most telemedicine programs strive for moderately expensive interactive television as the basis of their networks [Grigsby,

1995/(1), p. 25]. However what is technical possible, is not always desirable and useful for medical purposes. The challenge in choosing telemedicine equipment and services is to match the lowest cost and most accessible technology that will achieve the desired objec-tive with the exact medical needs of the communities to be served [Klose, 1997].

Matching communications technologies to medical needs is important because resources available for medical care are limited. Consequently the use of more expensive telemedi-cine technologies will reduce the total number of sites that can be installed nationally.

Therefore when deciding whether to use telemedicine, in-person consultation, or any other

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form of diagnosis and treatment, physicians should choose the method that can provide the desired clinical outcome at the most reasonable cost. In addition, reimbursement policies should favor desired outcomes rather than specific processes [Perednia, 1995/(3)].

Some experts assume that interactive video systems may never be cost effective for smaller hospitals. They believe that low-cost store-and-forward systems may replace interactive video systems as the technology of choice [Wyman, 1995]. This statement cannot be fully agreed, since Wyman does not distinguish between the specific nature and kind of consul-tation, which may sometimes demand a real-time availability of the expert. Nevertheless, in many cases store-and-forward technology is sufficient to telepathological demands and a low-cost tool to transport specialist expertise to broad areas. That the necessity of interac-tive systems has to be proved carefully reflects the fact that at almost every telemedicine project, real-time teleconferencing accounts for less than 25 % of system use. The majority of teal-time videoconferencing time is used for medical education and administration [Moynihan, 1995; Perednia, 1995/(3)].

13.4.3.4 Cost Examples for Equipment

The choice of hardware and software depends upon individual needs and preferences. It is difficult to specify a typical standard system, since there is a rapid development of hard-ware and softhard-ware for video and image transmission and the kind of usage varies a lot.

Nevertheless, some guideline specifications and typical purchase prices will be given [Anonymous, 1997].

System Configuration for a Desktop Telepathology System

The cheapest low cost solution for executing telepathology is simply by employing the mostly available Internet mail for image exchange [examples see Kuakpaetoon, 2000;

Rosenthal, 2000]. Yet, such solutions often go along with serious disadvantages (e.g. risk of attaching images to wrong case). That is why as first solution the investment costs of

‘desktop telepathology systems’ will be described.

Binocular microscope approx. US-$ 8.350

Color video camera approx. US-$ 1.700

MPEG digital capture board approx. US-$ 830

Pentium PC 133 + (or Mac equivalent) approx. US-$ 2.500

High resolution 21” monitor approx. US-$ 3.500

28.8K + modem and net conference software approx. US-$ 670 Windows/MAC OS, Internet connectivity etc. approx. US-$ 750 total approx. US-$ 18.300

The system above will allow the pathologist to transfer telepathology services across the inter-/intranets at image resolution ranging from 640 x 480 pixels to 1080 x 760 pixels.

Using net conference tools, like MS Net Meeting, Intel Pro Share, Netscape CoolTalk or Picture Tel⁷³, the pathologist could conduct an interactive voice/text chat with remote

73 NetMeeting, a inter/intranet desktop conference tool, Microsoft, 1996, http://www.microsoft.com Intel Proshare, a desktop tele-videoconference system, Intel, 1995, http://www.intel.com

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ticipants, too. Using public networks, the disadvantage of such systems often is transmis-sion speed.

Configuration for a Medium Range Telepathology System

Binocular photo microscope or approx. US-$ 42.500

Alternatively: binocular, motorized photo microscope* approx. US-$ 66.700

Color video camera approx. US-$ 8.350

High resolution image capture board approx. US-$ 5.900

Pentium PC 166+ (or Mac equivalent) approx. US-$ 3.350

High resolution 21” monitor approx. US-$ 3.500

ISDN interface approx. US-$ 700

ISDN line installation approx. US-$ 500

Mass storage media approx. US-$ 3.350

Desktop video conference system approx. US-$ 6.700

Windows/MAC OS, Internet connectivity etc. approx. US-$ 7.500 total approx. US-$ 75.600 or total* approx. US-$ 99.800 The schedule above describes the minimum hardware configuration for regular remotely consultations, where a pathologist will most likely want a system providing relatively high resolution images that can be rapidly transmitted. Not included is the use of a motorized microscope, such as the Zeiss Axiophot 2⁷⁴, which will allow to remotely control the microscope stage and objectives.

Configuration for a High Resolution Telepathology Server

Binocular, motorized photo microscope approx. US-$ 66.700

Color video camera approx. US-$ 8.350

Hi resolution image capture board approx. US-$ 5.900

SGI workstation approx. US-$ 50.000

High resolution 21” monitor approx. US-$ 3.500

ISDN interface approx. US-$ 700

ISDN line 6 approx. US-$ 2.000

Mass storage media approx. US-$ 3.400

Desktop video conference system approx. US-$ 6.700

Windows/MAC OS, Internet connectivity etc. approx. US-$ 750 Total approx. US-$ 148.000

If an organization requires either very high resolution images or a high throughput of cases, the equipment above will be more appropriate. The example is based on a high resolution

Cool Talk, A inter/intranet desktop conference tool, Netscape, 1996, http://home.netscape.com Picture Tel, A desktop tele-videoconference system, Picture Tel, 1996, http://www.picturetel.com

74 Axiophot 2, The digital revolution in microscopy, Zeiss, 1996, http://www.zeis.de/mi/limi_e/p3/Axioplan2_phot2_e.html

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multiprocessor system from Silicon Graphics running the UNIX operating system. Turcan and O’Brien mentioned similar costs. They estimated that acquisition cost to set up a full imaging live telemedicine system, including diagnostic and video components, will prob-able cost around US-$ 100.000 to 130.000 and US-$ 800-10.000 TI line costs per month, depending on the location [Turcan in Wyman, 1995; O’Brien, 1998, p. 157]. The invest-ment cost of the system in Basel (CH) was approximately US-$ 200.000 (330.000 SFr), and additional US-$ 12 per examination [Steffen, 1997/(2), p. 25]. The costs for the dynamic systems of the microscope producers Leica, Zeiss, Nikon and Olympus are also approximately US-$ 80.000 to 120.000, depending on the system configuration and the specific price set ups of the country (for information see chapter 9, please).

Regarding these system approaches, again not just the price of the equipment, but also transmission costs will have an influence on the selection of the kind of telepathology sys-tem, since nowadays speed of data transfer is no more a technical problem but is connected mainly to the financial situation of an organization. Fortunately the cost of broadband con-nection use will most likely decline dramatically in the near future. This situation is compa-rable to the high cost of electronic memory some years ago. Therefore it is expected that the discussion of still image systems versus live image transfer could become less contro-versial at a time when data transfer costs do not play an important role and when robotic equipment becomes cheaper [Kayser, 1996, pp. 476-477]. In the questionnaires of this study some users of dynamic telepathology systems mentioned the high prices as a prob-lem, whereas users of static telepathology systems named the cheap investment prices as a positive aspect of their system. Further two users argued that price of equipment will become a huge problem as soon as telepathology should become introduced at each patho-logical desk. One user recommended to develop modular systems, where the user can decide which functions are appropriate for him.

13.5 Revenues - Reimbursement

Im Dokument Investigation of the Critical Factors of Success in Telepathology an International Comparison Study (Seite 172-179)