Economic Model of Organizational Architecture to Guide Design and

							  Economic Model of Organizational Architecture*
    to Guide Design and Performance Evaluation
  in an Urban, Primary Care Telemedicine Network

             Kenneth M. McConnochie, MD, MPH




* Brickley J, Smith C, Zimmerman J. The economics of organizational
  architecture. J Applied Corp Finance 1995;20:19-31
What makes this an economic model?


      Essence of economics –

      • theory of values

      • how individuals make choices
What’s this got to do with HIT?

 Primary challenge = organizational innovation

 Adopting and integrating new technology requires
 change in individual and organizational roles and
 responsibilities
What’s this got to do with evaluation?

Evaluation - an essential component of innovation strategy


Primary objective - to demonstrate use of model to guide
evaluation strategy
                  Health-e-Access:
Health, Healthcare and Social Problems Addressed

• Marked socioeconomic disparities in childhood morbidity
  burden.

• More than half of US pre-school children spend time in
  child care.
• Rates of common acute illness are increased in child care.
• Illness in childcare accounts for 40% of work absence for
  parents using child care.
• 20% - 70% of pediatric visits to the emergency department
  are for non-urgent problems.
      Short Story
… about a long-running nose




       1 week later
      Organizational Problem
Usual Healthcare
• Every child has a primary care “medical home”
• Physician(s) controls the organization directly

versus

Health-e-Access
• Many childcare sites
• Many different primary care offices
• No telemedicine utility service (yet)
   Conceptual framework –
      the 3-legged stool

(1) Incentives

(2) Decision rights

(3) Performance evaluation
Health-e-Access Stakeholders
 • Parent and Child
 • Private Insurance Organizations
 • State and County Government, Medicaid
 • Industry
 • Primary Care Physicians
 • Childcare Programs
Stakeholders and their Decision Rights

Parent
• Use of telemedicine services vs. traditional alternatives
• Choice of insurance company and plan

Industry
• Payment for telehealth services, if self-insured
• Qualify/cover telehealth services in dependent care or
  healthcare components of Flexible Spending Accounts
• Negotiate health insurance premiums, covered services
• Change health insurance company
             Decision Rights - continued
Health Insurance organizations - Private
• Coverage of telemed services (yes/no)
• Type of coverage (e.g., fee-for-service, capitated)
• Reimbursement rates for telemed services
• Sponsorship of telemed

Health Insurance organizations, Public; County & State Government
• Licensing new types of healthcare workers
• Administrative approval of reimbursement for new services (i.e., Medicaid
  Managed Care)
• Support adoption of telehealth services (vs. ignore potential)
• Legislation that requires insurance reimbursement for telehealth

Primary Care Physician
• Provide/refuse telehealth services
• Promote/obstruct adoption of telehealth services, e.g., through participation on
  insurance organization committees that recommend coverage of new services
Dominant Stakeholders

• Health Insurance Organizations

• Physicians
Stakeholders and their Incentives
 Parent and child
 • Improve child health and development
 • Increase sense of security
 • Increase access to healthcare
 • Minimize symptom severity and duration in child
 • Minimize disruption to usual activities/responsibilities
   family from child illness
 • Minimize out-of-pocket costs to family
 • Improve financial status through steady employment and
   advancement
 • Maintain a “medical home”
      Incentives - continued


Industry
• Minimize work absence
• Maximize employee productivity - “presenteeism”
• Reduce healthcare costs
Stakeholders and Performance Evaluation


Parents, Childcare Programs, Industry
      • Absence due to illness

      • Perceived benefits
             Parent satisfaction
             Childcare program support
            Absence Due to Illness
       Before and After Health-e-Access
    Days Absent Due to Illness*

                                  20
                                            Net impact :
                                          63% reduction
                                  15
                                       (Pediatrics May 2005)
                                  10

                                  5

                                  0




* Mean days absent per week per 100 registered child-days.
                             Parent Satisfaction
                Based on interviews with parent after first use of telemedicine. N = 229.

            100
             90
             80
% of families




             70
             60
             50
             40
             30
             20
             10
              0



                   * Estimated time saved = 4.5 hours (SD 2.2) per telemed visit
Utilization – Preliminary Data
Utilization Predicted by Telemed:
         Bivariate Analysis
Utilization of Any Site for Illness:
       Other Determinants

        • Sex
        • Insurance type
        • Child care site
        • Primary care practice
        • Child’s age
    Logistic Regression:
Telemed Effects on Utilization
          Expanded Program
• 22 child sites, 8500 total children eligible
  –   7 current city child care programs
  –   5 city elementary schools
  –   5 suburban elementary schools
  –   5 suburban child care programs (SE suburbs)
• 5 urban practices
• 6 suburban practices (SE suburbs)
• Insurance reimbursement for demonstration
  project telehealth visits