The Financial Impact of a Pediatric Telemedicine Program: A Children's Hospital's Perspective

Abstract

This study evaluates the financial impact of telemedicine outreach in a competitive healthcare market from a tertiary children's hospital's perspective. We compared the number of transfers, average hospital revenue, and average professional billing revenue before and after the deployment of telemedicine. This is a retrospective review of hospital and physician billing records for patients transferred from 16 hospitals where telemedicine services were implemented between July 2003 and December 2010. Hospital revenue was defined as total revenue minus operating costs. Professional billing revenue was defined as total payment received as the result of physician billing of patients' insurance. We compared the number of transfers, average net hospital revenue per year, and average professional billing revenue per year before and after the deployment of telemedicine at these hospitals. There were 2,029 children transferred to the children's hospital from the 16 hospitals with telemedicine during the study period. The average number of patients transferred per year to the children's hospital increased from 143 pre-telemedicine to 285 post-telemedicine. From these patients, the average hospital revenue increased from $2.4 million to $4.0 million per year, and the average professional billing revenue increased from $313,977 to $688,443 per year. On average, per hospital, following the deployment of telemedicine, hospital revenue increased by $101,744 per year, and professional billing revenue increased by $23,404 per year. In a competitive healthcare region with more than one children's hospital, deploying pediatric telemedicine services to referring hospitals resulted in an increased market share and an increased number of transfers, hospital revenue, and professional billing revenue.