Healthcare Technology Featured Article

January 10, 2013

Up to $400 Million Healthcare Connect Fund Debuted by FCC Chairman

Hopefully you are appreciating my sudden interest in things relating to D-Health. However, recovering from the flu this week, (BTW, no excuses as I got the shot which takes two weeks to work and which I unfortunately received too late) got me focused. And, it was thus with more than a bit of interest that the decision by FCC to put up $400M for its new “Healthcare Connect Fund,” really grabbed me.

This is good news. In case you missed it, below are some highlights.

Using expansion of broadband to improve healthcare delivery and cut costs

Speaking at the Oakland Children’s Hospital & Research Center, FCC Chairman Genachowski revealed that up to $400 million in annual funding will be made available to healthcare providers as part of the FCC’s new Healthcare Connect Fund. The objective is simply stated yet in many ways profound:

Beginning in 2013, the FCC’s new Healthcare Connect Fund will spur the development of broadband networks to support modern telemedicine, which will link urban medical centers to rural clinics or provide instant access to health records.

The Fund, which expands the Commission's health care broadband initiative from pilot to program, will allow thousands of new providers across the country to share in the benefits of connectivity and dramatically cut costs for both hospitals and the Universal Service Fund…The FCC will begin accepting applications for the Healthcare Connect Fund beginning in late summer of 2013.

 From a practical standpoint, two important challenges are being addressed. First, as with most initiatives that are “pilot programs”, those participating are faced with uncertainty about program longevity and even program validity. The announcement says the new fund means that the success of the FCC’s current Rural Healthcare pilot program justifies both making it permanent and expanding its reach. Second, the new regime for funding removedprevious FCC constraints that made it difficult for hospitals serving rural patients to get high bandwidth connections needed for modern telemedicine— limiting the services eligible for funding, and making it hard for consortia to effectively bargain for the lowest cost service.

The new Healthcare Connect Fund Program has set some lofty goals:

  • Increase access to broadband for healthcare providers (HCPs), especially those serving rural areas
  • Foster development and deployment of broadband health care networks
  • Maximize impact of the FCC’s universal service health care funding

Indeed, the expectations that go with the goals are certainly aggressive. The FCC expects the fund to bring thousands of new providers across the country into the program, and allow thousands more to upgrade their connections. It also believes that the lessons learned from the pilots have the potential of cutting the cost of broadband health care networks in half, through group purchases by consortia and other efficiencies. And, adding even more to the pot, there will be a new “Skilled Nursing Facilities Pilot Program,” that will launch in 2014 to test how to support broadband connections for skilled nursing facilities with funding will be up to $50 million total over a three year period.

How the Healthcare Connect Fund works 

Now to what you probably really want to know if you are part of the communications and healthcare communities’ that are eligible for participation. Here is how the FCC describes it: 

  • The fund will provide patients at hospitals and clinics around the country access to specialists at major health centers through telemedicine, and support the exchange of electronic health records (EHRs), leading to better coordination of patient care and lower costs.  Specifically, the fund will:
    • Support broadband connectivity and broadband networks for HCPs
    • Encourage formation of state and regional health care consortia to save costs and expand access to health care
    • Provide a 65 percent discount on broadband services, equipment, connections to research and education networks, and HCP-constructed and owned facilities (if shown to be the most cost-effective connectivity option), while requiring a 35 percent HCP contributio
  • The FCC will begin accepting applications for the Healthcare Connect Fund beginning in late summer of 2013
  • Eligibility: Public or not-for-profit hospitals, rural health clinics, community health centers, health centers serving migrants, community mental health centers, local health departments or agencies, post-secondary educational institutions/teaching hospitals/medical schools, or a consortia of the above
    • Non-rural HCPs may participate in Healthcare Connect Fund as part of consortia; consortia must remain majority rural
  • Funding Caps
    • Cap on total funding for FCC Rural Health Care Programs including Healthcare Connect Fund and Skilled Nursing Facilities Pilot is $400 million annually
    • Cap for upfront payments in Healthcare Connect Fund is $150 million annually

The rest of the announcement contains what has become standard operating procedure for such events. The commission has some explanatory language as to its interests in extending broadband as quickly as possible to places that do not have it, particularly in rural America, and by extension its history of encouraging this specifically for the healthcare industry (education is the other big one obviously) because of the significant benefits to the common good. 

It then cites are few examples from the pilot that show how broadband-enabled telemedicine:

  • Improves health outcomesthrough increased speed to diagnosis and responsiveness
  • Drives down costs: The case cited is in South Dakota, e-ICU services have saved eight hospitals over $1.2 million in patient transfer costs over just 30 months.
  • Expands access to specialists:  This is critical not just for rural areas but everywhere for everyone.

The example used in the announcement for the last point is one involving Barton Memorial Hospital, part of the California Telehealth Network and a recipient of FCC Universal Service funding. There doctors and nurses are using broadband to enable remote examination through a live IP video feed and a relatively inexpensive telemedicine cart. Barton remote services include cardiology, infectious disease, neurology and other specialties for which there are no specialists at Barton. 

Without going into too much of my personal history, I can tell you that I worked on a remote Indian reservation in the Southwest in my youth and received a nasty and potentially fatal bite from what the locals called “a varmint!” What I can relate is that telemedicine today would have put me out of the danger zone many critical hours before I eventually was ruled OK. 

At the end of the day, telemedicine is a specific term for what is generically a powerful and hopefully ubiquitous “Knowledge Net.”    Where there is knowledge this is power, and where there  is power and communications there can be knowledge. 

The bottom line here is that if you think you can/should be eligible to participate in receiving funding from the Healthcare Connect Fund, now is the time to get ready and get smart. The FCC has provided these links:

As the toastmaster usually says at most gatherings, “To your health!”

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