CHAPTER 11. OPERATING BUDGET

The most successful telemedicine programs contribute revenue to an organization and, ideally, have identified a path to profitability. Telemedicine programs which have identified sources of revenue to fund operations enjoy significantly greater support within an organization. Furthermore, organizations which derive substantial revenue from telemedicine are much more willing to maintain their commitment for the program over an extended period of time.

Commitment of insufficient capital to fund program operations through startup is often a major factor in a program's demise. The balance of this chapter will focus on special considerations relating to revenue and expenses effecting program operations.

Program Revenues. Many programs obtain funding to support operations from grants or outside third parties. The amount and timing of availability of grant funds should be clearly identified in the budget.

As with all medical services, telemedicine services must derive income from third party insurers and patients to support ongoing operations. Therefore, the estimate of operating revenue begins with an analysis of reimbursement policies of insurers with which you do business. The insurance profile for telemedicine services should be substantially similar to that for all other medical services offered by your organization. This information can then be used to estimate revenues for telemedicine services.

Expenses. In most respects, expenses for operating a telemedicine program are substantially identical to those expenses incurred in customary clinical practice, with the addition of costs for training, technical support, telecommunications costs, software services and system maintenance costs.

One of the most important tasks to avoid unnecessary escalation of costs is to efficiently structure the time of consulting professionals. As stated previously, the goal is to mainstream telemedicine into the every day clinical practice of consulting professionals. In the case of programs conducting live telemedicine, the scheduling of availability of consulting professionals is likely to play a critical roll in the control of costs and physician acceptance of the program.

Please visit AMD's Design Center to review a sample template operating budget to assist in the development of the operating budget for your successful telemedicine program.