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NEW TELECOMMUNICATIONS APPLICATIONS OFFER POTENTIAL FOR DRAMATIC COST REDUCTIONS IN U.S. HEALTH CARE

 NEW TELECOMMUNICATIONS APPLICATIONS OFFER POTENTIAL FOR
 DRAMATIC COST REDUCTIONS IN U.S. HEALTH CARE
 CAMBRIDGE, Mass., July 16 /PRNewswire/ -- Widespread use of four telecommunications and information technology applications can reduce the annual cost of health care in the United States by more than $36 billion, according to a recent study entitled, "Can Telecommunications Help Solve America's Health Care Problems?", which was prepared by Arthur D. Little, the international consulting firm.
 The study showed that the greatest cost reductions can be achieved through the electronic management and transport of patient, clinical and diagnostic information. "By supporting home health care and other services offered by health care providers, this application alone has the potential to decrease America's health care costs by nearly $30 billion," the report states. Other applications offering significant cost reductions are electronic claims processing ($6 billion), electronic inventory control ($600 million) and videoconferencing ($200 million).
 The study was co-sponsored by eight telecommunications companies -- Ameritech, Bell Atlantic, BellSouth, Northern Telecom, NYNEX, Pacific Telesis Group, Southern New England Telephone, and Southwestern Bell Corporation.
 "These cost reductions will ultimately flow to patients, employers, and governments, those who pay for and fund health care in this country," noted Arthur D. Little management consultants Mark K. Schneider, Nancy Mann and Arthur Shiller.
 While the Arthur D. Little study quantified the specific cost benefits associated with the use of certain telecommunications and information technology applications, it also examined enhancements in health care quality and access made possible by more widespread use of telecommunications. The study pointed out that certain applications -- especially those related to home health care -- can have a profound impact on the delivery and quality of care. Among the applications examined were those that allow patients to communicate with their health care providers through home-based communications devices or computer terminals.
 "By providing patients with technologies that support and foster self-care, patient education, and early intervention, the system is better equipped to ensure that fewer medical problems become serious," explained Schneider, a senior consultant who headed the research team. "The expansion of technology-based home health care also means that working people and businesses benefit from reductions in the amount of time, travel, and work days consumed by medical care, as well as from dramatically increased patient involvement and satisfaction."
 Specific cost benefits identified by the Arthur D. Little study include the following: Management and Transport of Patient Information
 -- $15.3 billion in cost reductions through the expansion of
 technology-based home health care services.
 -- $12.7 billion in reduced hospital costs associated with adverse
 medical reactions, nursing clerical time, record storage,
 retrieval of clinical information, and peer review of medical
 records. Claims Processing
 -- $5.3 billion in insurers' administrative costs, especially those
 associated with claims processing and adjudication
 -- $322 million in reduced billing costs Inventory Control
 -- $640 million in expanded use of electronic data interchange to
 support just-in-time delivery strategies that reduce paperwork
 and inventory carrying costs, lower labor costs, and reduce the
 need for warehouse space. Videoconferencing
 -- $132 million savings in the costs of remote consulation contracts
 for hospitals that serve primarily rural areas.
 -- $103 million reduction in travel and conference costs for
 potential training (neither of these figures reflect the
 improvement in medical decision-making and, therefore, quality of
 treatment that could result from physician-to-physician video
 consultations).
 The Arthur D. Little consultants caution that these substantial, long-term cost reductions are dependent not only on more widespread use of telecommunications and information technologies, but also on a policy-making environment that encourages the fullest development of new telecommunications technology that would benefit health care.
 The consultants encourage greater cooperation and communication among the telecommunications industry and health care providers and policy-makers.
 "The telecommunications industry must become a vital partner and an active participant in health care reform efforts," said Shiller. "At all levels of government, policy-makers should seek the industry's assistance in the planning and implementation of telecommunications and information technologies as they seek to reduce costs, improve access, and ensure quality."
 At the same time, the Arthur D. Little study noted, efforts should be accelerated to conduct more trials, pilots, and beta tests of telecommunications and information technologies and applications.
 ---
 NOTE TO EDITOR: This is the second study Arthur D. Little has conducted on the impact of telecommunications on major industries. An earlier study dealt with its impact on the nation's transportation problems. A copy of either study can be obtained by contacting Celia Doremus at 617-864-5770, ext. 2483.
 -0- 7/16/92
 /CONTACT: Celia Doremus of Arthur D. Little, 617-864-5770, x2483/ CO: Arthur D. Little ST: Massachusetts IN: HEA SU:


CH -- NE002 -- 9876 07/16/92 08:59 EDT
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Date:Jul 16, 1992
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