FCC Creates Healthcare Connect Fund

Acting to expand access by healthcare providers to robust broadband networks, the Federal Communications Commission recently established the Healthcare Connect Fund to reform and modernize its universal service program for healthcare.

Broadband is essential to 21st Century healthcare, saving lives, improving the quality of care, and reducing costs by providing instant remote access over high-speed networks to medical specialists, healthcare records, and training.

Telemedicine applications provided over robust broadband networks can facilitate immediate diagnoses and care needed to prevent lasting damage to stroke victims, prevent premature births, and deliver psychiatric treatment for patients in rural areas, to name a few examples.

The FCC’s existing Rural Health Care program, established by the 1996 Telecommunications Act, was not effectively structured to expand the reach of broadband healthcare networks.  In 2006, the FCC launched its Rural Health Care Pilot Program to learn how to more effectively support these networks, and it now funds some 50 active pilots across the nation.  In a report released this past summer, the FCC highlighted lessons learned from these pilots, including a South Carolina consortium that saved $18 million in Medicaid costs by using telepyschiatry, and a group of healthcare providers in the Midwest that saved $1.2 million in patient electronic intensive care unit services.  The report is available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-12-1332A1.pdf.
Informed by these and other success stories, the new Healthcare Connect Fund will help expand access by healthcare providers to the high-bandwidth connections they need for modern telemedicine by doing the following:

• removing artificial limitations on technology and provider type that hampered legacy universal service healthcare support;

• encouraging consortia between smaller rural healthcare providers and urban medical centers to enable remote hospitals and clinics to draw on the medical, technical, and administrative resources of larger providers;

• increasing fiscal responsibility by requiring participants to contribute 35% of the costs, while affording healthcare providers access to lower rates through group buying;

• supporting broadband services purchased from diverse communications providers, while also allowing healthcare providers to construct new broadband networks when that is the most cost-effective option; and

• covering upgrades to higher speed service required for healthcare applications.

In addition, the reforms establish a new competitive Pilot Program to test expanding broadband healthcare networks to skilled nursing facilities.   Because these facilities are often remote from doctors and sophisticated lab and testing facilities, frail and convalescing patients will benefit greatly from broadband services that can reduce the time, expense and stress of travelling to receive medical care.  Up to $50 million over three years will be available from the Fund for these competitively-awarded Pilots.

The order implementing these reforms maintains a $400 million ceiling on the cost of universal service support for broadband healthcare networks.  Savings achieved by group purchases through consortia and other increases in efficiency could cut the cost of robust broadband healthcare networks in half for both providers and the Universal Service Fund, based on the FCC’s analysis of successful Rural Health Care Pilots.

With this order, the FCC has reformed and modernized all four of its Universal Service programs for 21st Century broadband over the past two years, as recommended by the FCC’s 2010 National Broadband Plan. The Universal Service Fund provided $8.1 billion in 2011 for the Connect America Fund to expand rural broadband and voice service; the E-rate program to provide broadband in schools and libraries; the old Rural Health Care program; and the Lifeline program to make phone service more affordable for low-income Americans.

Source: Federal Communications Commission