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Texas prison system reports $1 billion in technology-related health savings

The savings came through the use of electronic medical records and telemedicine, according to a study.

By Pamela Lewis Dolan — Posted Sept. 20, 2011

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A study of the Texas Dept. of Criminal Justice has found that the state saved nearly $1 billion over the past 10 years because of health-related technology.

Credited for the savings was an electronic medical record system in the state's prisons, combined with a telemedicine system at the University of Texas Medical Branch, which provides nearly 80% of all prisoner care in the state, and Texas Tech University, which provides about 20% of the care. The combined telemedicine and EMR system used by 145 Texas prisons, with about 160,000 adult and juvenile inmates, handles 19 million interactions per month.

Business Computer Applications, the Atlanta-based technology company that helped implement both systems, announced the findings of the study, performed by the Stamford, Conn.-based technology research group Gartner, in August.

Michael Bourdeau, director of Correctional Managed Care Information Systems at the University of Texas Medical Branch, said in a statement that the EMR and telemedicine systems "improved access to specialists, continuity of care and follow-up care while decreasing costs." He said the cost per day, per inmate, to provide medical care has been reduced from about $19 to $9.67. In California, the only state with a higher incarcerated population than Texas, the cost is $41.25, he said.

Erica Drazen, managing director of the Emerging Practices Group in the health care division of the Falls Church, Va.-based research group CSC, said prisoners are unique in that they are constitutionally entitled to medical treatment, which often requires the care of a specialist. Some prisons contract to have doctors come on-site to provide care, but many times the prisoners are transported to the physician, which adds significantly to the cost of care, she said.

By allowing the prisoners to be treated where they are without the cost of transportation, which includes the cost of guards to accompany them, "telemedicine makes sense," she said. The presence of an electronic medical record, which can provide the treating physician with the appropriate data at the point of care, only enhances the benefits of the telemedicine transactions, Drazen said.

Albert Woodard, CEO of BCA, said several prison systems have turned to telemedicine and EMR technology to reduce the cost of care. The Maricopa County Jail in Arizona announced last year that it was investing $10 million in an EMR system. The city of Philadelphia announced earlier this year that it was implementing an EMR system in its public health clinics as well as its prison system. Despite all the benefits the prison systems are touting, Woodard said, telemedicine has a higher potential for benefits and cost savings in the "free world" than it does in the prison system.

Cost savings

A May 2008 study published by Alexander H. Vo, PhD, executive director for the Center for Telehealth Research and Policy at UTMB, found that $4.3 billion could be saved nationally between six and 10 years by using telemedicine and EMRs. In the study, $270.3 million was the projected savings to the prison health care systems, while the rest was non-prison health care. Included in his calculations are:

  • 38% reduction in transfers from one emergency department to another.
  • 14% reduction in transfers from nursing homes to emergency departments.
  • 68% reduction in transfers from nursing homes to physician offices.
  • 45% reduction in redundant tests as a result of physician-to-physician consults.

Vo said UTMB subsequently did another study that for 18 months tracked 530 adolescent Medicaid patients who accessed psychiatry care via telemedicine. That study found a 50.5% reduction in emergency department utilization compared with the prior year. "If you applied that across the general population, if you could cut down ED utilization by 50%, that's a big, big chunk of savings that you just deployed," Vo said.

One of the biggest barriers to ambulatory practices adopting telehealth solutions has been financial, Vo said. Systems are expensive to adopt. Without payment for their use, patients and payers directly benefit from the cost savings, but not physicians.

"Providers must bear the cost of required infrastructure investments, but current insurance reimbursement policies tend to favor traditional medicine, including face-to-face consultations, and may not adequately compensate them for telehealth services," Vo wrote in the 2008 report.

Since that report, Vo said there has been some progress in terms of payment structure, but not enough. "The reimbursement model needs to be more expansive," he said.

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