1 Update on the FCC’s Rural Health Care Program Federal Communications Commission State and Local Government Webinar September 27, 2012 Chin Yoo Attorney Advisor, Wireline Competition Bureau, Telecommunications Access Policy Division

2 Health Care in the News How to improve quality of care? How to save on costs? IOM Report: “Best Care at Lower Cost”

3 Health Care & Broadband, Part I (Electronic Health Records) HITECH Act: Incentives for physicians and hospitals to achieve “meaningful use” of electronic health records IOM: 20% patients reported that test results or medical records not transferred in time for appointment “Phase 2” Meaningful Use: ability to exchange these records with others

4 Health Care & Broadband, Part II (Telemedicine) Iowa: The Iowa Health System transmits high resolution images via tele-radiology, which has improved diagnoses and has enabled more patients to stay at local hospitals. South Carolina: Palmetto State Providers Network uses tele- OB/GYN services to treat high-risk expectant mothers, saving both doctors and patients travel time and reducing the patient no-show rate. South Dakota: Heartland Unified Broadband Network (HUBNet) members use E-emergency, E-ICU, and E-Pharmacy programs to bring specialist care to remote areas.

5 Overview of FCC RHC Discounts Services SupportedDiscount Rate Telecommunications Services Urban-rural differential Internet Access Services25 percent* Deployment of statewide or regional health care broadband networks for rural and urban providers (infrastructure, services, equipment) 85 percent “Primary” Program: Telecom Services “Primary” Program: Internet Access Pilot Program * 50 percent for entirely rural states and territories (American Samoa, U.S. Virgin Islands, Northern Mariana Islands, and Guam qualify)

6 Eligible Health Care Providers “Public” or “Nonprofit” (includes government health care providers) Rural only Includes circuits to urban if one side is rural Eligibility lookup tool: Reform rulemaking – open issue on urban eligibility 7 Eligible Provider Types Local health departments or agencies Community or migrant health centers Community mental health centers Rural health clinics Not-for-profit hospitals Post-secondary educational institutions offering health care instruction, teaching hospitals, and medical schools Consortia of one or more of the above

7 Applying to the Primary Program The Universal Service Administrative Company (USAC) administers the program under direction from the FCC. Getting Started: started/default.aspx started/default.aspx Welcome Packet: douts/RHC-Welcome-Packet.pdfhttp:// douts/RHC-Welcome-Packet.pdf

8 Pilot Program Fostered Creation of Health Care Networks

9 Pilot Program: Summary of Key Benefits and Lessons Learned Pilot-funded networks improve the quality and reduce the cost of health care in rural areas. Consortium applications lower broadband costs through bulk buying and create administrative efficiencies. Most health care providers (HCPs) prefer to use third-party networks rather than construct their own. Urban HCPs in networks provide medical and technical expertise, leadership, and administrative support to rural sites

TrendsPilot Program Examples Reduced time to treatment Lives saved Bacon County Hospital (GA): Connection to specialists allowed rapid administration of drug to save stroke patient ’ s life Telemedicine Savings to taxpayers Palmetto State (SC): Tele-psychiatry saved Medicaid program $18 million Remote consults Reduced transport costs Barton Health (CA): Patients save almost $30,000/month in travel costs due to remote consults 4 Health Care & Broadband, Part II (Telemedicine)

11 Pilot Program Findings: Bulk Buying Enables Lower Rates, Higher Bandwidth, and Better Service Quality Pilot Program Primary Program Individual Competitive Bidding Bulk buying power Only 16 percent of funding requests receive bids at all 94 percent of projects had more than one vendor bid Over 120 vendors have been selected to provide services in Pilot Program Consortium-led Competitive Bidding

12 Bandwidth (Mbps) # of HCPs # of Circuits Primary Program Pilot Program Cost ($) Bandwidth (Mbps) Primary Pilot Bandwidth Usage in Primary and Pilot Programs Avg Total Monthly Recurring Costs – Primary and Pilot Program Participants

Pilot Program Findings: Participation by Urban Providers Yields Benefits Health CareAdministrativeTechnical Access to specialists Cost savings from telemedicine Training of health care personnel in rural areas Leadership of consortia Sources of technical expertise Financial resources Efficiency of network design Urban hubs, rural spokes DRAFT FOR REVIEW 13

14 Reform of Rural Health Care Program The FCC issued a Notice of Proposed Rulemaking in 2010 proposing to reform its Rural Health Care Program. In the Notice, the FCC proposed two separate programs: a Health Infrastructure Program and a Broadband Services Program. The FCC recognized the value of gaining experience from the Pilot Program in shaping a reformed permanent Rural Health Care Program. The FCC expects to adopt its reformed program by the end of 2012.

15 For Further Information: At the FCC (Policy Questions) Chin Yoo Attorney-Advisor Telecommunications Access Policy Division Wireline Competition Bureau (202) At USAC (Application Questions) Paloma Costa Program Manager of Outreach Rural Health Care (202)