Case Study: Teledermatology “Well, this analysis does not suggest to me that it

Question

Case Study: Teledermatology

“Well, this analysis does not suggest to me that it makes sense to push ahead with fancy telemedi-cine equipment for our practice. As I read the data, it costs us $280 to provide a consult to a patient via telemedicine and $320 to do it face-to-face. Telemedicine might boost our profits a little, but I can’t imag-ine too many patients will want to give up meeting their dermatologist in person. So,” Reese, the practice’s CFO, summed up, “I recommend against this project.”“If that were the whole story,” said Carroll, the director of market-ing, “I would agree with you. But this looks only at our costs. We need to think about the costs patients bear. Many of our patients are children, so they have to be driven across town by a parent. By the time you figure in the travel costs and time costs parents incur to bring their children here, a face-to-face visit could easily cost $100 more than a telemedicine visit. And that back-of-the-envelope calculation just looks at people in the local area. We know children in the western half of the state are not get-ting the care they should. There are very few dermatologists out there, and there are no dermatologists who specialize in treating pediatric skin cancer. The time and travel costs for those patients could easily be $200 per visit. We can’t just look at our own costs.”“I hadn’t thought of that,” said Reese. “I was focusing on these cost estimates, not taking into account the opportunity to do group visits—which our patients have been asking about—very inexpen-sively. This technology will let one of our doctors or nurses talk to eight patients at once in their homes. It’s mostly teaching and coaching, so the patients do not need ultra-high-resolution monitors on their home computers. We could even do some follow-up visits that way, so I think there are options this analysis of $280 per visit does not consider.”

Discussion questions:

• Does Shea’s point about patients’ costs make sense?

• Which perspective on costs looks more like a societal perspective to you?

• Would using telemedicine equipment mean giving up face-to-face dermatologist visits?

• What would be the advantage, if any, of being able to serve patients in the western half of the state?

• What would be the advantage, if any, of being able to offer telemedicine group visits?

• What is your assessment of the promise of telemedicine for this practice?

Explanation / Answer

1. The director of marketing makes a case about patient's costs and it makes sense. The organization was planning to take an investment decision based on its own costs. However, it was not taking into account the perspective of the customers. By just taking its own costs and business model into account, the team thinks that providing face to face consultation will make better business sense. Even though its costs (to the organization) is marginally higher than providing telemedicine, the organization thinks that the patients will prefer face to face consultation over telemedicine.

But, taking the patient's perspective changes the scenario. For a patient, telemedicine is more convenient as well as cheaper. This is because, in telemedicine, a patient saves on the travel cost as well as on time. This makes telemedicine the more preferred mode of getting help from a dermatologist.

Thus, the director of marketing's point makes sense and the organization will have to consider the case keeping in mind the requirement and preference of its patients.

2. The perspective on costs from the patient's point of view looks more like a societal perspective. For the community at large, it costs more to travel and visit the dermatologist than consult the dermatologist over the phone. The cost to visit is costlier by $100 when compared to telemedicine (considering the travel costs and the time costs incurred by the members of the society).

3. No, using telemedicine equipment would not mean completely giving up face-to-face dermatologist visits. Telemedicine equipment will be used to teach and coach a group of patients (around eight patients) at a time. However, for serious dermatological problems, the patients will have to go for face to face visits. The telemedicine equipment will only reduce the frequency of face-to-face dermatologist visits, it will not eliminate it.

4. By being able to serve  patients in the western half of the state, the organization will have the advantage of increasing its patient base as there are very few dermatologists in the western half of the state. The advantage, from a patient's point of view, will be access to better dermatological care and reduction in their travel time when they opt for telemedicine.

5. The advantage of being able to offer telemedicine group visits is that the cost to the organization will be reduced. This will happen without reducing the revenues from telemedicine. This will help the organization increase its bottomline (profits). In terms of patients, the advantage for them is that they get to be coached and taught at a group level, without the requirement of ultra-high-resolution monitors on their home computers.

6. My assessment is that the director of marketing has made a very valid point. The situation should be analysed from a patient's perspective. The patient will prefer the alternative that is convenient and cheaper. The organization should expand and develop that facility that is preferred by the patient.

As costs incurred by patients are higher when they make a visit, they prefer telemedicine. Thus the organization should invest in the fancy telemedicine equipment.

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.