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Low-cost labor, time zone differences, and telecommunication advances have "flattened" the world of business and services1 ; however, health care has been relatively insulated from these world-flattening forces until recently. In particular, the fundamental physicality of medicine -- the need to examine a patient or look at a chart or radiograph -- prohibited the remote outsourcing that was possible in manufacturing or call centers.2 However, digitized health care now permits the outsourcing of a range of medical services, from clinical diagnostics to direct care.
Although outsourcing of any type triggers predictable worries,3 outsourcing of health care raises special issues. Health care takes place in a complex regulatory and legal environment. Reimbursement is often from private insurers and government agencies, each with their own concerns and agendas. Both cost and quality of care must be gauged against a backdrop of privacy, billing, licensing, and liability concerns.
In this article, we explore some of the critical regulatory, legal, and policy issues surrounding health care outsourcing and telemedicine. We do not address "medical tourism" (the practice of obtaining health care in another country)4 ; the regulatory issues that it raises, though somewhat related, undoubtedly merit separate treatment.
Overview of Medical Outsourcing and Telemedicine
Medical outsourcing refers to the process by which a health care provider (whether an individual physician, a medical group, a hospital, or a health care system) engages outside third parties to provide medical services. Telemedicine focuses on the electronic delivery of these services, which are usually clinical (e.g., specialist consultations) or diagnostic (e.g., teleradiology) but sometimes include information distribution.5 ,6
Medical outsourcing has grown more slowly than other types of outsourcing for several reasons. First, patients have traditionally regarded health care as intensely personal, making them wary of the relative anonymity of outsourcing. Moreover, outsourcing of services normally performed by highly trained, licensed professionals such as physicians and lawyers (so-called extreme professional outsourcing7 ) generally grows more slowly than outsourcing of other services such as call centers and manufacturing. Finally, most medical outsourcing requires a robust and, until recently, prohibitively expensive backbone of information technology.8 ,9
All of this is changing rapidly. Skilled health care labor is now available in many countries. Patients seem primed to embrace the kind of technology that has transformed personal...