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 - continuedHealth 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

• Absence due to illness

• Perceived benefits

Parent satisfaction Childcare program support

Parents, Childcare Programs, Industry

Absence Due to Illness Before and After Health-e-Access

0

5

10

15

20

Da

ys

Ab

se

nt

Du

e t

o Il

lne

ss*

* Mean days absent per week per 100 registered child-days.

Jan

July

Dec

After

Before

Net impact :63% reduction

(Pediatrics May 2005)

Parent Satisfaction%

of

fam

ilie

sBased on interviews with parent after first use of telemedicine. N = 229.

0

10

20

30

40

50

60

70

80

90

100

ED

Allowed to stay at work*

Would choose child carewith telemed over one without

Saved parent trip to:

Pri

mar

yC

are

Ph

ysic

ian

After hours

YesYes

* 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