The Oklahoma Telemedicine Network will merge with a state-run educational information service after the network lost money and urban hospitals were reluctant to participate.
Costs to operate the Oklahoma Telemedicine Network were nearly $30,000 over budget for fiscal 1996, which ended June 30. The Oklahoma Medical Technology and Research Authority said costs were $460,330. They had been estimated at $433,142.
"It will be more cost-effective to merge because a lot of the schools are already in the hospitals' areas so shared costs would be less," said Candace Shaw, manager for the Oklahoma Telemedicine Network at the Center for Telemedicine at the University of Oklahoma Health Sciences Center in Oklahoma City.
The Medical Technology and Research Authority has told hospitals participating in the OTN that the state can't afford to subsidize the network any longer. The authority said hooking up with OneNet, the statewide information network for local governments and schools, would be more cost-effective.
"We will operate the telemedicine network over OneNet," said Brad Holt, executive director of the Oklahoma Medical Technology and Research Authority, which manages OneNet and will run the combined entity.
OTN began two years ago after receiving a $4.3 million Community Development Block Grant from the U.S. Department of Housing and Urban Development.
Authorities had discussed such a merger in the past, but education officials weren't ready to go. "We had the grant and we couldn't wait," Shaw said. "Now (OneNet) is more viable, but it wasn't two years ago."
The federal grant enabled 38 rural hospitals to tap into OTN, but monthly costs were still too expensive for larger hospitals. Costs to access the network ranged from $2,000 to $8,000 a month, depending on the size of the hospital.
"Even rurals were telling us the (federal) grant would only cover their costs for two years," Holt said.
The grant was limited to county or city-owned rural hospitals with fewer than 100 beds. The eligible hospitals also had to have a high percentage of Medicaid patients and be located in areas of the state with a substantial number of poor and moderate-income people.
Without urban and tertiary hospitals participating, rural hospitals were limited to using the OTN for Internet and teleradiology projects among themselves.
"As of February, 38 rural hospitals were connected on the network, but when it was time for the regional and tertiary hospitals to come on board, (the larger hospitals) were having challenges within their own institutions," Shaw said. "Some were looking at their own proprietary networks and others couldn't afford to join."
As a result of lower costs for the combined OneNet-OTN venture, other urban hospitals are expected to sign on. "By comparison, the monthly costs will be cheap now," Holt said.
Public hospitals will pay between $600 and $750 a month, while private hospitals will pay $1,000 to $1,250 a month. Costs will vary depending on the size of the hospital.
The Oklahoma State Regents for Higher Education are expected to approve the consolidation and the new rates within the month.