Telecommunications in Healthcare:
Combating Cost Pitfalls

By Rudain Arafeh

June/July 2010

Since the old days of expensive private line, frame relay, or ATM technology, telecom technology – especially as it applies to the healthcare industry – has progressed to cut costs dramatically while giving organizations the benefit of a much richer communication experience.  Unfortunately, the sheer volume of telecom contracts that healthcare organizations now are tasked with managing has made planning an infrastructure intrinsically more complicated.

With remote care, telecare, and telemetry, mobile networks have played a greater role in transmitting and receiving key patient data, bringing about a drastic increase in spending on mobile network subscriptions.  The amount of contracts telecom and infrastructure managers have to manage makes it difficult to monitor the details of each contract and find unnecessary expenditures.

While telecom expense management (TEM) software and applications can save any large institution money by detailing each bill and making a determination on accuracy, it holds varying degrees of effectiveness in different industries.  In the healthcare industry, the role of TEM is growing rapidly due to these new industry trends.

The Quick Progression of Corporate Telecom: In the old days of network infrastructure, healthcare organizations would employ private networks built and operated by phone companies to establish a direct connection.  Although these lines were naturally more secure than many of today’s conferencing options, they were also substantially more expensive and offered less flexibility.

Then, healthcare companies began migrating private networks to the Internet to take advantage of higher bandwidth, more widespread availability, better connectivity, and lower costs.  The ability to conference came into play in a big way with video, audio, and combination options, as well as more collaboration tools like WebEx, GoToMeeting, and NetMeeting.

While the dawn of online conferencing produced missing words, echoes, jerky video, and sometimes poor call quality, today’s networks can prioritize traffic for better quality calling and video.  Nevertheless, problems that must be addressed still exist.

Today’s healthcare providers are moving further into remote care, and more devices are released daily that provide telecare or telemetry.  These devices usually transmit a small amount of data back and forth and have a fixed monthly mobile rate based on how much data is transmitted and received.  Providers of such devices are now faced with standard data rates plus overages if the device exceeds the allotted usage.

So how do you manage, monitor, and control every single mobile network subscription to make sure you’re utilizing each contract to its fullest?  How do you decide who gets charged for what in the event of an outside conference call?  Perhaps most importantly, how do you avoid overage charges and needlessly high-priced contracts when your infrastructure team has too many daily responsibilities to consistently monitor usage?

Telecom Expense Management’s Role in Healthcare: By using TEM software capable of drilling down into large bills, healthcare providers can determine who and what application is exceeding its allotted usage amounts.  This data can then be used to pass the charges on, reconfigure the offending application, or use other rate plans for certain applications that require larger usage limits.

Usually, TEM employs some form of software platform that gives healthcare users the flexibility to input and track contracts, collect crucial analytics, compare contracts, and use a dashboard for a better overview of telecom costs. 

Assuming a provider with 10,000 devices of which only 30 percent are above allotted usage, the monthly savings can be extremely significant.  Finding out what devices and which users are above the plan can quickly translate to savings of more than $1,000,000 in extra fees over the contract period.

Implementing a TEM strategy takes a lot of the pain out of managing numerous contracts with multiple vendors, but it also gives greater accountability in terms of who is charged for what, especially in the case of a conference call with a third party.  With strict management of these contracts, healthcare organizations can more easily answer infrastructure questions like “How do I implement the right access, equipment, and quality for cost-sensitive remote locations?”

If you have to spend too much time corralling your telecom maintenance contracts from any number of different vendors, each one can suffer.  Controlling and comparing inventory and billing from a central location helps eliminate money wasted on duplicate contracts, obsolete equipment, and non-competitive pricing.

At the same time, TEM understands the complexity of multiple payers.  If you’re conferencing with an external physician and he benefits from the call, do you charge him a portion of the costs?  Healthcare organizations often have different locations and remote outliers that need access to their networks.  With TEM software, you can manage and allocate the costs and charges that make sense. 

Quick Conferencing Q&A for Network Professionals: Below are several questions to ask about your existing conferencing system or if you plan to implement conferencing in your network infrastructure.

• Does your organization have the right conferencing hardware?  You should have hardware that supports, at minimum, current H.323 conferencing standards and compression standards like H.264.

• Do you have the right network bandwidth?  Can your network handle the extra traffic?  Video conferencing and IP-based voice calls including audio conferencing can affect your bandwidth in a negative and substantial way. 

• Does your network support QoS?  Your network hardware and your telecom provider should both be able to support quality of service (QoS) routing.  This allows you to prioritize packets based on their significance and urgency: video and voice packets first, email last. 

• Have you implemented QoS properly?  The devil is in the details.

• Who’s paying for your added expenses?  Depending on how you use your video conferencing, you might be able to offset some of your added expenses by implementing an expense sharing agreement.  To do this correctly, you will need to understand how you are being billed by your telecom providers.  TEM software can help you put your arms around telecom billing and may help you reduce spending significantly. 

Rudain Arafeh is founder, president, and CEO of Configure, Inc.  He established Configure in 1996 after leaving AT&T to assist clients with complex telecommunication contracting and billing matters.  Configure has grown rapidly and services many large clients.  Mr. Arafeh served on the AT&T advisory council for many years and has numerous publications.  Prior to AT&T, he worked for SPL World Group, a large consulting firm serving customers on highly complex projects.  Mr. Arafeh also co-founded Cygnet Labs, a medical documentation software company.