Telehealth is increasingly an option for patients looking for fast and affordable care -- from mobile apps that diagnose skin conditions to medical kiosks stationed at malls, the opportunities for remote treatment are growing. But when a hospital is located four hours away from the closest airport, telemedicine is less of an option and more of a requirement.

Rural hospitals face a unique set of challenges when delivering quality care, and access to specialists is just one of them. Only about 10 percent of US physicians practice in rural areas, with almost a quarter of the country's population living in these areas, according to a 2010 report issued by the Office of Rural Health Policy. The same report found the number of specialists per 100,000 people is 40 in rural areas, compared to 134 in urban areas.

Telemedicine, or the remote diagnosis and treatment of patients via telecommunications technology, has become an indispensable tool for rural hospitals to improve patient care and their bottom line. Telemedicine, just like every aspect of healthcare technology, is a business, and the financial benefits can't be ignored.

"The communications and device infrastructure has drastically improved compared to years ago," said Siemens Healthcare CEO John Glaser. "We're at a time where the technology has matured in some very significant ways that enable us to do things that five years ago were cost prohibitive or ungainly."

When rural patients know their hospital is using telemedicine, they have higher regard for that hospital and are less likely to bypass it for treatment at an urban facility, said James Marcin, director of the UC Davis Children's Hospital Pediatric Telemedicine Program. Marcin recently authored a study that found telemedicine consults significantly improved outcomes for patients treated in rural pediatric emergency departments. The study also found that a physician was more likely to adjust the patient's diagnosis and course of treatment after a face-to-face video conference with a specialist.

Improved patient outcomes are always ideal, but the financial pressures hospitals experience in today’s changing reimbursement landscape are also driving the push for telemedicine. Under the Affordable Care Act, the Centers for Medicare and Medicaid Services is reducing reimbursements to hospitals with excess readmissions. As the UC Davis study shows, telemedicine consultations from a rural hospital to a larger medical center can result in a more accurate diagnosis and better treatment on the initial hospital visit, reducing the chances of readmission.

Telemedicine not only saves money, but also drives revenue. Specialists order tests, labs, and prescriptions. With telemedicine, those dollars stay at the rural site, where the tests are performed. Because of this, telemedicine tends to be used more often in emergent cases that require tests and labs, and isn’t used as much in areas like psychiatric care because the payout isn’t as big.

"The sad thing is, just like everything when you're in a capitalistic environment, the alcoholic drug addict with Hepatitis C is not big business for telemedicine," Marcin said. "If they don't have good insurance, it's not going to work."

Even when telemedicine does work, it can be a challenge to get a program off the ground.

Southern Inyo Healthcare District Hospital, a 37-bed facility in Lone Pine, Calif., is located about four hours from the nearest airport. Southern Inyo pioneered its telemedicine program in the late '90s. It now has two mobile telemedicine carts equipped with video conferencing technology that can go anywhere in the hospital and clinic.

"It was a challenge for providers to accept that model of care change," said Lee Barron, Southern Inyo's CEO and CFO. "Primary care physicians were resistant because they were used to referring a patient to a specialist and moving on from that patient."

Successful implementation is possible, but leadership on the rural side needs to be strong, Marcin said.

"Nobody likes change," he said. "It's very important on the remote end to have a local, rural, clinical champion. You need somebody that's interested in investing the time and energy in changing the culture."

To introduce the doctors to the new technology, hospitals participating in UC Davis's study received periodic test calls outside of necessary consultations.

"You don't want the technology to fail when you really need it," Marcin said. "It's important to have it implemented and easy to use. There also has to be value connected to it. The doctor has to recognize what they'll gain from this technology.

With telemedicine, the PCP continues to be part of the patient's care even if a specialist is involved, because they are facilitating the virtual consultations and helping the patient make decisions. This ongoing participation has proved to be educational for the rural doctors, Barron said.

As the PCP becomes involved with the treatment of the more complex cases that telemedicine is intended for, they learn and are eventually able to handle those types of cases on their own. This has changed the types of cases Southern Inyo refers. 

"The referrals we have now are real referrals," Barron said. "Several years back, the referrals weren't totally necessary. Sometimes the specialists were spinning their wheels because they thought the primary doc could take care of it. Now the referrals are legitimate."

Those referrals mean more business for urban hospitals. Telemedicine creates partnerships between rural and urban facilities. While telemedicine decreases the number of patients transferred to urban facilities, those who are transferred are transferred almost exclusively to one hospital because of that partnership, Marcin said.

There are rules to these partnerships, however. Because of anti-kickback laws, urban hospitals are prohibited from purchasing telemedicine equipment for rural hospitals because it could create an incentive to use a specific hospital. An exception to this rule is if the equipment is purchased for research. Many hospitals, like Southern Inyo, fund telemedicine technology with grants. A standard telemedicine cart equipped with a quality monitor and camera can cost around $20,000.

"There's a huge range of the cost and quality of telemedicine technology," Marcin said. "With time, things get better and cheaper."

As telemedicine becomes more affordable and prevalent, will it replace the need for rural docs?

It's not likely, Marcin said.

"The rural hospital plays a critical role in routine care," he said. "That's not what telemedicine's focus is. The routine stuff is dealt with appropriately and well by rural and community hospitals. There's no fear of us or them becoming obsolete."