The Argument for Universal Access to the Health Care Information
Infrastructure: The Particular Needs of Rural Areas, the
Poor, and the Underserved
Statement of the Problem
The national information infrastructure (NII) offers an opportunity for the poor, persons living in rural areas, and the otherwise underserved to obtain a wide range of educational and medical services to which they currently have only limited access. These benefits can occur only if these groups gain access to the NII. Universal access to the telecommunications infrastructure has been a stated goal for many decades. As a result of a combination of funding transfers, funded and unfunded mandates, and regulations, the telecommunications industry has achieved a 94 percent overall telephone access rate. Unfortunately, the very groups that may benefit most from access to the NII are the very ones that have had the lowest penetration rate in the existing telecommunications infrastructure.
Upgrading the current system to the higher bandwidths that will be required for the interactive capabilities required in telemedicine will be expensive. Unfortunately, current technologies are making it possible for competitive access providers to bypass the local access providers who are maintaining the existing telecommunications infrastructure. They can preferentially provide services at a discount to the lowest-cost clients. The local access providers are left with the higher-cost users such as the poor and rural population. They are increasingly finding this an unreasonable burden, and many existing carriers are finding it uneconomical to upgrade services to these populations.
These are the very populations that may benefit most from the NII. The impact on their education and health care will be dramatic and the benefits to society as a whole will be extensive. It will therefore be necessary for society (i.e., the federal government) to make sure that these populations have access to the NII. This will require a new funding mechanism that no longer relies on internal industry fund transfers. It will require additional government subsidies, new taxes on competitive access providers, or legislative mandates.
We argue that the best course would be a system of value-added taxes on all services that use the NII. The funds from such taxes could be used to underwrite the development and maintenance of the NII.
Rural education and medical services are in the midst of dramatic changes. Shrinking rural populations are making community schools and hospitals hard to justify. While many states have legislated new curricula that attempt to improve the competency of students, rural schools generally lack the funds to attract the specialized teachers necessary for courses in these topics. In many rural areas there is a shortage of physicians. Local hospitals are being forced to close because they are noncompetitive. Medicare and Medicaid provide decreased physician and hospital reimbursement in rural areas. Many poorer patients in rural areas rely on Medicare and Medicaid funding for medical services, yet these funds no longer cover the costs of providing even these basic services. Many residents of rural areas must travel long distances to regional health care centers. Rural
preventive medical care is compromised because of the greater distances and limited access to services.
The economic competitiveness of rural areas is being compromised because of their inability to access high-speed transmission lines for electronic mail, telecommunications, video conferencing, and access to large centralized data bases used by libraries, in inventory control, and in updating of government records. Persons living in rural areas must pay toll charges when contacting government or regional health care offices, whereas residents in larger cities have no such expenses.
The case has been made that the NII will make it possible for rural, poor, and underserved populations to access high-quality educational and health care resources. These resources have previously been denied to these populations due to a combination of factors that include their inability to access these resources, the costs of these resources, and the limited number of high-quality providers of these services who were willing to relocate at sites convenient to these populations. If these services can be provided via the NII at a level of quality comparable to that provided to other populations, then the main impediment to these groups' obtaining this benefit will be their ability to access the NII.
Distance education holds the promise of bringing specialized teaching programs to poor and rural schools. Programs in foreign languages, science, and the arts, which are not available due to inadequate funding or class size, could be made available by video linkages. Participation in government programs and the provision of an "informed" electorate could result from improved access to computer-based educational resources. Rural constituents could sign up for government programs, renew licenses, submit applications for benefits, and obtain many other services, thus avoiding the time and expense now involved in travel to government offices. Health care consultation by experts at distant regional health care centers might be provided at local clinics. Preventive medicine programs, health education, access to health resources, and rapid clinical consultations are all possible consequences of access to the NII.
The provision of high-quality educational and health care services over the NII is currently being evaluated. Preliminary studies have shown that high-quality services are possible. The Mayo Clinic maintains video conferencing links between three sites in Florida, Arizona, and Minnesota. It recently conducted a telemedicine program linking its clinic in Rochester, Minnesota, with the Pine Ridge Indian Reservation in South Dakota. The Medical College of Georgia has several dozen sites on its telemedicine network. This year it has begun trials with direct links to patients' homes so that individuals recuperating from heart surgery can be linked to their doctors for follow-up. The Navy runs a teleradiology program estimated to save $14 million a year. Studies in Georgia have shown that using telemedicine can increase the number of patients admitted to rural hospitals. Rural hospitals typically charge up to $500 less per day than hospitals in large cities. Telemedicine offers a way to retain and retrain medical professionals and help keep rural hospitals open.1
Norway funds the largest telemedicine program in the world. In that country telemedicine is part of the government-run health care system. Practitioners regularly conduct consultations in a variety of specialties between remote hospitals and main academic centers. One ENT specialist suggested that the number of cases he receives from general practitioners has decreased by 50 percent since the introduction of telemedicine consultations.2
The NII is already being used to provide a wide range of medical information via bulletin boards, newsgroups, and electronic mailing lists via the Internet and commercial services such as Compuserve, Prodigy, and America Online. These services provide a great deal of patient-oriented medical information. The World Wide Web (WWW), a multimedia hypertext service, is the fastest growing component of the Internet. It contains a plethora of medical services, including newsgroups and bulletin boards as well as diagnostic, educational, and preventive services. Most major state and federal health care groups provide online access to their resources via the WWW. Many medical schools and university hospitals already provide patient information, course material, up-to-date medical literature, and even consultative services via the NII.
Many clinical services are available via the NII. The problem remains one of access. The cost of the computer equipment required to interface with the NII is falling dramatically and will eventually be only a small fraction of the expense of providing quality educational and health care services by conventional modalities. The main expense will be the heavy investment necessary to bring the telecommunications infrastructure to the homes and communities of all individuals, particularly those who are poor or live in rural or inner city locations. Given
their locations in either decaying, densely populated inner city areas or widely distributed and sparsely populated rural locations, it is extremely expensive to provide access.
The relatively low income of these individuals makes it unlikely that commercial providers of the NII can profit from providing this access. The commercial incentives for providing NII access to these groups may not exist. However, the benefit to the nation of providing quality education and health care to these individuals will be great. Because economic benefit will accrue to the nation as a whole rather than to the companies building and maintaining the NII, the usual capitalistic incentives that would make providing such services worthwhile are not appropriate. The government must either subsidize the provision of such services or somehow mandate that the providers of such services include these populations as a condition of any license to provide services to the remainder of the population.
In the past, mandates for rural electrification or universal telephone access took care of this problem. At the time these services were originally provided, it was decided that such universal access was in the public good. The idea of universal telephone service has been a foundation of the information policy of the United States since the Communication Act of 1934 was passed, creating the Federal Communications Commission
for the purpose of regulating interstate and foreign commerce incommunications by wire and radio soas to make available, so far as possible, to all the people of the UnitedStates a rapid, efficient,nationwide, and worldwide wire and radio communications service with adequatefacilities at reasonablecharges, for the purpose of national defense, for the purpose of promotingsafety of life and propertythrough the use of wire and radio communications, and for the purpose ofsecuring a more effectiveexecution of this policy by centralizing authority.
The current telephone penetration rate for U.S. households is approximately 94 percent.3 In addition, approximately 1.3 percent have a phone available or nearby. Roughly 4.5 percent of Americans (4.4 million households and 11.6 million individuals) have no telephone available.4
With respect to at-risk populations, the elderly actually do better than young parents with children with respect to telephone access. Access to telephone service for retired persons at all income levels is at the national average or better. Among the elderly, only those persons receiving Supplemental Security Income have a lower than average penetration of telephones (79.7 percent to 84.9 percent).5 The disparity in access to telephone service is most pronounced for people of all ages with low incomes. It is noted that 31 percent of all families receiving food stamps have no telephone.6 For families completely dependent on public assistance the percentage rises to 43.5.
Only 2.2 percent of homeowners have no telephone, but 21.7 percent of persons in public housing have no telphone and 40.2 percent of those living in hotel rooms or boarding houses have no telephone. Women and children are particularly vulnerable. Households headed by women with children who are living at or below the poverty line have a telephone penetration rate of only 50 percent. Race and ethnic background appear to confound the impact of income on telephone access. The percentage of white households without telephones is 8 to 10 percentage points lower than black and Hispanic households.
Persons living in rural communities outside metropolitan areas lack telephones in 9.9 percent of cases. In rural New Mexico only 88 percent of all households have phone service. In the Four Corners areas of Colorado, New Mexico, Arizona, and Utah, where 36,000 Navajo households are scattered about on 27,000 square miles, 21,300 households (63 percent) have no telephones. In that region installation fees can range as high as $5,000 for a single telephone.7
It therefore appears that factors that affect telephone penetration are low income, household headed by a woman with children, race and ethnicity, and rural location. Yet these are the very groups that would appear to benefit from the recent advances in telecommunications.
Today the public mandate for universal access is being removed or bypassed, and in some rural areas, universal access to telephone or electrical utilities does not in effect exist. To obtain these services the user must
pay for linkages to trunk lines that may be at a considerable distance from the home. The cost of such a link can be expensive. Consequently, many rural areas do not have cable or cellular telephone services. The equipment for new high-bandwidth connections necessary to provide state-of-the-art NII services may be prohibitively expensive for many rural and/or inner-city users.
However, these are the groups most likely to benefit from such services. The improvement in their education and health care will in turn be of great benefit to society in general. Once NII access is provided, the provision of such educational and health care services to these groups will represent only a modest additional marginal expense. It therefore is in the interest of the government and the general population that the NII is made available to these populations and furhter that it is provided as a governmental service or as a government mandate to the providers of such services.
The current method for providing near universal access to telephone services relies on funding transfers among carriers, transfers from other service providers, transfers between customers, and government contributions. The primary transfers have been from business and toll service users to basic residential subscribers and from urban to rural exchanges. Before the AT&T divestiture, these transfers were accomplished largely within a single corporate umbrella. Since then the systems has become more complex, with a system of rules governing transfers among carriers based on political compromise rather than economic logic. Currently there are three major fund transfer mechanisms: (1) funds transferred from toll services to local access providers, (2) transfer from low-cost local exchanges to high-cost local exchanges (i.e., from urban to rural exchanges), and (3) differential allocation of local service costs through rates charged to different customer classes (i.e., higher rates for business than for residential users). There is also a system of subsidization for social support services such as lifeline programs for low income customers, 911 emergency services, and services for the hearing impaired, all of which are covered through local telephone charges.8
With the arrival of increased competition and the exponential growth of providers of equipment, toll services, business services, etc., the rules are being altered. The difference between core services and access lines is blurring. As fiber and other broadband media continue to move into local neighborhoods and business districts and as the already existing cable networks begin to offer switched services, the points of interconnection among these paradigms are changing. The growth of alternate access providers has made it possible for large toll customers to directly connect to toll service providers without paying the usage-based within-system transfers that were traditionally collected through local access carriers. As local exchange competition develops, it will be more difficult for local exchange carriers to support high-cost areas or provide the default capacity relied on for system backup by competitive network providers. As cable television networks and wireless personal communication networks develop, they will make it more difficult for local access providers to continue to provide social services below cost. They will also threaten the ability of local exchange carriers to provide service to high-cost customers (inner city, rural, poor, etc.).9
The recent advances in communication technologies have raised the concern as to what is a reasonable basic telecommunications service. Is it plain old telephone service (POTS), fiber optics, microwave, satellite uplinks, etc.? Is there a single basic service modality? Some newer communications modalities such as cellular telephone access may be less expensive to provide to rural areas than are telephone lines, but the equipment to receive these services may be more expensive (i.e., cellular telephones). Will the telephone companies be required to provide only access, or access and equipment? What will be the minimum bandwidth that these companies will be required to supply?
If one agrees that there should be universal telecommunications access to the NII, then one must next decide the minimum bandwidth that should be allocated. Will it be for audio communication only, as previously defined, or must it now include video and computer communication capabilities? If it includes video, will it be single frame or action capabilities? Will it be five frames/s or the full 30 frames/s necessary for true action video? Will it be only black and white, or should it include color? For computer communication capabilities what will be the necessary speed? This is a particularly difficult challenge because we must select a bandwidth that is broad enough to supply a range of services (audio, freeze-frame video, action video, data interchange, etc.) yet economically realistic.
In deciding the minimum level of services to be provided we must also realize that the method of connecting to the NII will not be uniform. Some areas already have an extensive communications infrastructure
in place, and therefore it may be more economical to upgrade that existing infrastructure than to replace it wholesale. In other areas where no such infrastructure exists, consideration might be given to providing a newer technology. In some areas wireless communication may be more reasonable, while in others a cable system will be appropriate. After dealing with a relatively stable technology (twisted pair telephone line) for many decades, we are now faced with a rapidly changing panoply of technologies (digital telephone lines, fiber optic cables, microwave towers, satellite linkages, etc.) with variable communication bandwidth. In addition, the bandwidth of each modality is changing rapidly. Existing twisted pair analog telephone linkages can be upgraded to digital lines (ISDN), thus increasing their bandwidth. Using compressed video techniques, we can send video images over traditional telephone lines today in a manner not possible only six months ago.
It would appear that the minimal service configuration should be determined not by the physical type of linkage but rather by its bandwidth capability (i.e., its ability to attain a level of service rather than the physical configuration of that service).
Another major consideration must be the connecting focal point of that communication. Traditionally the communication linkage was to a physical location (home or office). Universal communication meant that all Americans had access to a telephone in their living space. This too is changing. We are now able to provide cellular communication linkages to individuals rather than to physical structures. Shortly we will be able to provide a seamless linkage across the entire nation so that one can move from cellular cell to cell without needing to register in the new area. The minimum standard for telecommunication access may involve service not to a physical household or building but rather to an individual.
In the health care field one could argue that fully interactive video capabilities are necessary if we are to be able to provide remote delivery access. Certainly, to provide remote consultation such video capabilities are necessary. However, if one is to provide remote teleradiology services, a higher bandwidth is necessary; to supply only patient information access and preventive services information, then perhaps a lower bandwidth would be appropriate.
Finally, if we are to provide universal service then we must define not only the bandwidth of that service but also its capabilities. In the past, universal access included access to the physical telephone. Does universal access now involve access to video equipment, computers, high-resolution screens, etc.? We now can use stethoscopes, otoscopes, and ophthalmoscopes at remote sites via telemedicine facilities. Will we include a remote stethoscope as the minimum telecommunications configuration in every household where a person with hypertension resides? In the end it would save lives and might be cost effective.
The major problem remains, Who is to maintain the NII? In the past these costs were either mandated to the carriers, who added them to the general cost of the service, or were explicitly included as an item on the bills of users of the system. They were essentially mandated "unfunded" government benefits, which are now unpopular and insupportable. We must therefore determine another way to support these services. This will become particularly important as access to the NII becomes a "portable" access that is not tied to a physical location.
Given the increasingly "portable" nature of this service, it will become more difficult to add the cost to a basic local access service charge. The concept of the local access company may gradually disappear as wireless systems spread. The only reasonable way to finance such a system is either via a tax on all telecommunications services or by government funding of the basic access service.
There are many ways the government can sustain the idea of universal access. One would be to mandate that the local access provider in a particular area provide service to all households and businesses or individuals living in that area at the same basic rate. This would continue the practice of cross subsidization within a local area and might make some local provider areas unprofitable for any carriers. One could set up a bidding system for local access provider areas, with the highest bidder getting the franchise for the area. These funds would then be available to subsidize services in local access areas that were not cost effective and did not attract any bidders. This would also result in cross-subsidization since companies successfully bidding for the more sought-after franchises would pay a higher fee and therefore find it necessary to charge higher tariffs to their customers. The major problem with this proposal is that the whole idea of a local access area is changing. The physical access location may be an individual. Would the area then become all the persons living in that area, working in the area, and visiting the area? Wireless communication negates the importance of the local access area. In addition,
microwave and satellite linkages make it possible for commercial access providers to bypass the local access provider. Such a mandate might be unenforceable.
A second method would be to follow that utilized in Japan, where the government supports local telecommunications services to all households. With this method the government could decide a basic level of services to all households or individuals and determine the most cost efficient method for providing it, be it telephone line, microwave tower, cellular telephone, etc. The government would then contract with commercial providers to provide these services. Such contracts could be "bid" to the lowest-cost provider who would agree to supply all households or individuals in an area for a set fee.10 Such an undertaking would be very expensive and would have to be funded from tax revenue. This would, once again, result in a major cross subsidization from higher taxed groups to other groups. The chances of legislating a tax to pay for the free provision of services that most of us already pay for would be remote.
A third approach would be to use value-added service surcharges. These would be calculated as a fixed percentage of gross revenues that potentially could be collected from all businesses selling value-added telecommunication services. Value-added services include the services of all service providers interconnecting with the public switched network, except local loop services provided to homes, businesses, or eventually individuals by state-certified common carriers with provider-of-last-resort obligations.11 The value-added tax would be the easiest to monitor. Funds from this tax could be used to subsidize basic services to all household or individuals.
The government has the most to gain in promoting universal telecommunications services. If, as expected, it improves our educational system, provides continuing medical education services, enchances health care, and brings these services to the poor, underprivileged, and rural populations, then the government (which currently supplies many expensive remedial series to these groups) would benefit the most. A better educated, healthier, and better informed electorate would greatly benefit the federal government. These benefits would be to the collective good and might not necessarily accrue to the companies supplying these telecommunication services. The government must therefore be the supplier of last resort.
Basic Levels of Service
The level of service must include a bandwidth specification based on type of service. We would argue that two-way, real-time video communication is the minimum level of service that should be accepted. Current twisted pair telephone communication will not realize this level of service, but combined digital circuits, fiber optic cables, and microwave and satellite modalities certainly can achieve this standard. There need be no single modality used for the NII. Depending on the area and/or population, a combination of these modalities might be appropriate.
Physical Access Unit
We believe that the access unit must gradually change from the household to the individual. We believe mobile communication will continue to grow to the point that we will have individual telephone numbers or IP numbers of telecommunication access numbers. An actual geographic access location will cease to be important.
We believe that there will be a gradual movement from the telephone as the standard of access to the NII into a broader audio and video interface. As a part of universal access, each home, business, and individual will have both audio and video capabilities as well as some minimal computer component. It is still too early to clearly define the actual instrument that will provide this interface, but it will surely be more complex than the
telephone. We must, however, begin to define the basic capabilities of this unit because it will dictate the level of service available.
Method of Funding Universal Access
We favor a value-added tax on the gross revenues of all providers of telecommunications services. This would include not only competitive access providers but also groups that use the NII to provide data, entertainment, news, financial information, etc. Such a tax is the easiest to calculate and enforce. It should raise enough money to fund the basic telecommunications infrastructure. The government would fund the entire NII with funds from this tax. Once the bandwidth and physical access unit were agreed upon, the government would solicit bids for the supplying of services to a particular area. The suppliers would agree to supply services to all individuals or households in the designated area. As the physical access unit gradually changed from the household or business to the individual, the actual georgraphic area might be replaced by population groupings.
We believe that the government must provide an NII, that it cannot be achieved through a nonregulated environment. The benefits are potentially too great to allow any segment of the population to be "displaced" because of limited commercial cost-benefit analysis. We must consider the total benefit of universal access, and this can be done only with government intervention. Continued government involvement can result in efficiencies of scale, uniform standards, and universal access.
Beamon, Clarice. 1990. "Telecommunications: A Vital Link for Rural Business," OPASTCO Roundtable.
Belinfante, A. 1991. "Monitoring Report: Telephone Penetration and Household Family Characteristics," No. CC, Docket No. 80-286. Federal Communications Commission, Washington, D.C.
Bumble, W.A., and G.J. Sidak. 1993. Toward Competition in Local Telephone Markets. MIT Press, Cambridge, Mass.
Dordick, H.S. 1990. "The Origins of Universal Service," Telecommunication Policy 14(3):223–38.
Dordick, H.S., and M.D. Fife. 1991. "Universal Service in Post-divertiture USA," Telecomunications Policy 15(2):119–28.
Gallottini, Giovanna T. 1991. "Infrastructure: The Rural Difference," Telecommunications Engineering and Management 95(1):48–50.
Hudson, Heather E. 1984. When Telephones Reach the Village: The Role of Telecommunications in Rural Development. Ablex, Norwood, New Jersey.
Mueller, M.L. 1993. "Universal Telephone Service in Telephone History: A Reconstruction," Telecommunications Policy 17(July):352–69.
1. See Linder, A. 1994 "Global Telemedicine and the Future of Medical Science," Healthcare Informatics, November, pp. 63–66; and McGee, R., and E.G. Tangalos. 1994. "Delivery of Health Care to the Underserved: Potential Contributions of Telecommunications Technology," Mayo Clinic Proceedings, Vol. 69, pp. 1131–1136.
2. Linder, A. 1994. "Global Telemedicine and the Future of Medical Science," Healthcare Informatics November, pp. 62–66.
3. Schement, J.R. 1994. "Beyond Universal Service: Characteristics of Americans Without Telephones, 1980–1993," Communications Policy Working Paper #1, Benton Foundation, Washington, D.C.
4. Belinfante, A. 1989. "Telephone Penetration and Household Family Characteristics," No. CC, Docket No. 87-339. Federal Communications Commission, Washington, D.C.
5. Schement, J.R. 1994. "Beyond Universal Service: Characteristics of Americans without Telephones, 1980–1993," Communications Policy Working Paper #1, Benton Foundation.
6. Belinfante, A. 1989. "Telephone Penetration and Household Family Characteristics," No. CC, Docket No. 87-339. Federal Communications Commission, Washington, D.C.
7. ''How to Flourish in an All Digital World," Wilt Letter, Vol. 1, No. 4, December 21, 1993.
8. Hudson, Heather E. 1994. "Universal Service: The Rural Challenge Changing Requirements and Policy Options," Working Paper #2, Benton Foundation, Washington, D.C.
9. Egan, B.L., and S. Wildman. 1994. "Funding the Public Telecommunications Infrastructure," Working Paper #5, Benton Foundation, Washington, D.C.
10. Egan, B.L., and S. Wildman. 1994. "Funding the Public Telecommunications Infrastructure," Working Paper #5, Benton Foundation, Washington, D.C.
11. Egan, B.L., and S. Wildman. 1994. "Funding the Public Telecommunications Infrastructure," Working Paper #5, Benton Foundation, Washington, D.C.