technology
Telehealth will face great difficulties if the sector fails to think outside of its current structures.
This is what Paul Frijters, professor of health economics at the University of Queensland, had to say in the lead up to his presentation at the upcoming Australian Telehealth Conference 2016.
At the event, Frijters will unpack some of the bottlenecks affecting systems such as telehealth and dive into the idea that health, and telehealth in particular, is a credence good – something on which placing a value can be elusive.
Aged Care Insite sits down with Frijters ahead of the conference to discuss some of the constraints telehealth faces and possible future directions for the service.
ACI: In your speech, you’ ll be discussing the idea of credence goods. What does this term describe and how does it relate to telehealth? The term credence good was coined decades ago, economists have taken it up. There’ s a wonderful literature review by Rudolf Kerschbamer and Uwe Dulleck in the Journal of Economic Literature of 2006. They define a credence good as, essentially, a good that consumers don’ t realise they need, and in some cases, even if they’ ve had it, don’ t know they’ ve had it. It’ s a good they just have to believe they need. They [ are expected ] to believe they need it, that they’ ve had it and that it worked.
Healthcare is a perfect example of this. Think of someone who feels badly who goes to a doctor. They don’ t know what’ s wrong with them. They don’ t know what treatment might work on them. After they have been given a certain treatment – this could involve an operation or all sorts of things – they don’ t know whether what they got was the treatment they needed, and they don’ t even know whether they’ re still ill or cured. They might experience some degree of relief or may feel better, but they don’ t know whether the underlying problem has been solved.
Healthcare is a beautiful example of a good where consumers are completely in the woods as to whether they need it, whether they’ ve had it, or whether it’ s worked. That comes with all kinds of problems, and you’ ll see the various ones economists have talked about in the market values. For example, a normal good is a bottle of milk. You know you’ re thirsty, you get the bottle of milk and you know you’ ve had it. They can’ t overcharge you for the milk, because otherwise you go elsewhere. They can’ t sell you something else that is not milk, because otherwise you complain. If they try to sell you something other than milk, you know that is not what you want or need. In contrast, with healthcare it’ s easy for individuals to overpay, to get treatments they didn’ t want or need, or to pay for things they didn’ t get. This is a quintessential problem that is at the core of many of the cost increases we’ ve seen in the last couple of decades throughout the Western world.
You will also discuss some of the bottlenecks that might affect systems such as telehealth. What will you delve into at the event? I’ ll delve into a couple of bottlenecks. The tyranny of distance is certainly there; the people who are doing the diagnosing are not the people who are delivering the actual [ healthcare ]. Telehealth is constrained by the fact that the people who most want to use it have to travel an awful long way [ to get the physical items they may need ]. There are also technical difficulties in telehealth. [ This includes ] difficulties with how to get paid for a consult, and with people being late or cancelling. The consequences of [ such things ] are far greater when you’ re setting up a Skype call with someone from a remote island then they are with someone who’ s sitting in a consultation room in Sydney.
Those are sort of the side issues that will be [ lightly ] mentioned. The main problem we will be talking about is the incentives for the individuals doing the diagnosis from afar. Their incentives are weak; it’ s difficult for them to be paid the full value of their consultation. I’ ll go at length into that, and it ties in directly to the credence good problem.
What are some of the possible future directions telehealth can take? Telehealth can take various directions depending on the level of ambition. [ The sector ] can offer a lot more money to the individuals doing remote diagnoses. The subsidy for telehealth was reduced at the end of 2014 and that can be brought back. It can be increased, it can be specified for certain situations in which there have been underpayments, Skype fees or a risk of patients not showing up. You could think of various ways of offering more money to the remote specialist GPs, doctors and others to be involved in the consultations.
A second option is for telehealth to become more integrated into local health services, so you have it in various jurisdictions associated with various types of health, and groups of health providers, rather than being a sort of a national standalone system.
A third possibility is that you get a more radical, bigger national system, whereby telehealth morphs into its own health provision institution. They’ re going to have doctors and specialists who work just for them, and the same with nurses; and they’ re going to have their own ability to expand or reduce services in various areas.
I think that last possibility is basically a lost cause, though. One of the first two options – either paying more for consultations or integrating telehealth – would seem more logical in the short run. In the long run, the notion of a standalone diagnosis unit has some merit.
What do you hope attendees take away from your presentation? I would hope they get a greater understanding of the credence good problem as it affects health in general, but also an understanding that telehealth in particular is handicapped by the credence good problem. Because by placing a distance between the person who is being helped and the person who is doing the diagnosis, in effect, one is trying to overcome the credence good problem – that is part of telehealth’ s charm and part of its appeal.
I would like individuals to come away with a good understanding of the credence good problems, and how it’ s partly insoluble within the current structures and if we don’ t think outside the current structures, telehealth will face great difficulties. n agedcareinsite. com. au 41