Experience using an ASP model to expand a state-initiated telemedicine program

The Arizona Telemedicine Program began in 1996 as a state-initiated program to create the technical infrastructure for the statewide deployment of telemedicine. An important goal was to develop a business model to move toward self-sustainability and enable additional healthcare organizations to participate without increased state funding. In Arizona, small, geographically isolated communities are under-served both in terms of specialty medical services and telecommunications, while a few urban areas concentrate on medical resources and specialty services. There are traditional geographically based referral patterns that would have to be supported in order for telemedicine to be successful and the Program sought to create a model for expanding telemedicine as a “peer” network in place of the traditional “hub-and-spoke” model common to telemedicine at that time. In 1997, the Program developed a membership model focused on the core telemedicine network services. Any member of the network can interact with any other member of the network for clinical telemedicine services and medical education programming. Professional clinical services among members are established using separate agreements that are layered upon, and independent of, the network membership contract. Using this membership model, the telemedicine network in Arizona has grown from the initial eight sites funded by the state to more than 22 sites. Cost recovery from the memberships and other centralized cost recovery enabled by the model now offsets 45% of the total cost of operating the statewide infrastructure. This Application Service Provider (ASP)-based membership model for telemedicine network services has worked extremely well for Arizona.