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Enactment of House Bill Number 2201 by the State Legislature of Kansas and the Impact it will
have on Telecommunication and Telemedicine
Emily A. Covington
The University of Kansas

Health care spending per capita in the United States is at an all time high. Today, the United
States spends more on health care than any other nation in the world. Numerous individuals
suggest that technological advancements are a major contributor to the nations excessive health
care spending. As the worlds leader in innovation production, the United States has focused
greatly on the idea of remote healthcare via telecommunication. On July 1, 2013, the Kansas
State legislature enacted the House Bill Number 2201 concerning telecommunication
deregulation. Several Kansas citizens express optimistic views regarding the recently passed bill,
while others express a significant amount of concern. Telecommunication regulation will be
compared in detail to telecommunication deregulation. Telemedicine, along with further
innovative advancements, may be indirectly affected by the recent act to deregulation
telecommunications in the state of Kansas. As the consumer, it is necessary to evaluate each
potential advantage and disadvantage associated with this ruling. Cost-effectiveness, patient
outcomes, customer safety, and equality will all be evaluated in relation to telecommunication
regulation versus deregulation. In conclusion, Although the United States holds more Nobel
Prizes in medicine and economics than any other country, our health care system is less efficient,
in terms of health per dollar spent, than those of other high-income countries (Mulcahy et al.,

Enactment of House Bill Number 2201 by the State Legislature of Kansas and the Impact it will
have on Telecommunication and Telemedicine
Define the Problem
The United States (US) spends too much per capita on health care. Health care spending
in the US is estimated to be twice as much as other industrialized nations; however, US citizens
do not reap the benefit of increased spending (Centers for Medicare & Medicaid Services
[CMS], 2010). The US health expenditures approximated $2.6 trillion in 2010 (CMS, 2010).
Cancer detection and survival rates in the US appear to be superior to other developed countries,
yet the overall life expectancy is significantly lower (CMS, 2010). The Kaiser Family
Foundation has identified, the swift adoption and diffusion of expensive new devices, drugs,
and procedures is a major factor driving both medical progress and growth of health care
spending (as cited in Mulcahy et al., 2012). According to Cutler and McClellan (2001), The
average newborn in 1950 could expect to spend $8,000 in present value on medical care over his
or her lifetime. In addition an infant born in 1990 could anticipate spending $45,000 on health
care over their lifespan (Cultler & McClellan, 2001).
The application of science to prevent or delay a disease onset, and to promote or monitor
superior health is defined as medical technology. Numerous health interventions involve medical
technology including: diagnostic testing, surgical procedures, medical devices, electronic
medical records, and telemedicine (The Centers for Disease Control and Prevention [CDC],
2009). The US is the worlds leader in producing and consuming medical technology (Longest,
2006). The annual report provided in Health, United States (2009) stated:
As advances in medical technology continue to transform the provision of health care and
lengthen and improve quality of life, questions are increasingly raised about the
appropriate and equitable use of this technology and how best to control its contribution
to rising health care expenditures. (CDC, 2009, p. 3)
Modern information and communication technologies are transforming the way US citizens
communicate. Information and communication technology use an innovative technique,
telemedicine, to deliver healthcare services (CDC, 2009). The World Health Organization uses
the term telematics to define both telemedicine and telehealth. Their adopted definition is as
Health telematics is a composite term for health-related activities, services and systems,
carried out over a distance by means of information and communications technologies,
for the purposes of global health promotion, disease control and health care, as well as
education, management, and research for health. (The World Health Organization, 1998,
p. 1)
An estimated 45% increase in annual healthcare costs are attributed to the development of new
innovations or the intensified use of old technology (Callahan, 2008). Escalating healthcare
expenditures impact individual citizens, businesses, and the US economy. Innovations developed
in the US have become the fundamental source of improving quality of life, yet these
advancements come with an unfortunate, expensive price tag. Due to the magnitude of the
United States current financial position a modification in health care spending is essential.
Recently, the Kansas State Legislature enacted the House Bill (HB) Number 2201 concerning
telecommunication. Numerous Kansas citizens express dissimilar opinions about this bill.
Kansass advocates reveal their optimism toward the HB 2201, while other individuals express a
considerable amount of concern regarding this change.

Assemble the Evidence
History of Telemedicine
The printing press invention during the15
century was the first technological
advancement in healthcare (Nicogossian, Pober, & Roy, 2001). Healthcare providers were able
to propagate medical information after creation of the printing press (Nicogossian, Pober, & Roy,
2001). The revolutionary proposal of telegraphy dates back to 1753 (Massachusetts Institute of
Technology, 2002). In the 1830s, Sir William Cooke and Sir Charles Wheatstone developed the
first commercial electrical telegraph (Morse Code & the Telegraph, n.d.). In 1837, Samuel
Morse unveiled the first one-wire telegraphic system (Massachusetts Institute of Technology,
2002). He then sent What hath God wrought! on May 24, 1844, to Alfred Vail as the first
historic telegraph message. Telegraphy has allowed for numerous advancements in healthcare,
furthermore it has established the foundation for telemedicine (Nicogossian, Pober, & Roy,
2001). According to Nicogossian, Pober, and Roy (2001), The National Aeronautics and Space
Administration (NASA) has been a pioneer in telemedicine research and applications. During
NASAs successful Project Mercury, the crew was monitored via telemetry (Nicogossian, Pober,
& Roy, 2001). Nicogossian et al. (2001) note, Private medical conferences, a key part of
telemedicine to this day, were an integral part of Mercury healthcare. After establishing the first
statewide telemedicine system Jay H. Sanders was granted the title Father of Telemedicine
(Telemedicine and AV in the U.S., 2011). Jay Sanders credits his mentor, Kenneth Bird, for
assisting in the introduction of telemedicine via a microwave line in 1967 (Telemedicine and
AV in the U.S., 2011). In addition, Bird introduced the term telemedicine, defined as healing
at a distance (CDC, 2009). Many healthcare providers and companies have adopted Birds
definition of telemedicine. Although the idea behind telemedicine has been available for
centuries, the US continues to evolve as the global leader in technological modernization.
History of Deregulation
According to Linda Brinson (2011), government regulation reforms were highly accepted
in 1970 and 1980. The reasons varied: Sometimes, industries thought they could be more
profitable with less government interventions and sometimes, consumers and public interest
groups thought regulators had grown too cozy with the industries they regulated (Brinson,
2011). Many suggest that the outcomes associated with modifying a government-regulated
system to a deregulated structure are very unpredictable (Brinson, 2011). Consider the
responsibilities of other federal regulatory agencies, for example the Food and Drug
Administration, Occupational Safety and Health Administration, Federal Aviation Agency, or
the Federal Deposit Insurance Corporation; these US regulatory agencies strive to protect and
provide safety to all citizens. Brinson (2011) suggest that federal regulation versus deregulation
continues to be a common political debate. On October 24, 1978, Jimmy Carter signed the
Airline Deregulation Act into law (Carter, 1978). President Carter stated, With this act, airlines
can reduce their fares up to 50 percent, opening up air travel to millions of Americans who
would not otherwise be able to afford it (Carter, 1978). Some believe that regulation provides
protection against monopolies, increased rates, and poor services (Brinson, 2011). In contrast,
others deem deregulation as a comprehensive resolution to the economy. According to Robert
Crandall and Jerry Ellig (1997), airline passengers save approximately $19.4 billion dollars every
year due to the Airline Deregulation Act of 1978 (as cited in Smith & Cox, 2008). However,
controversial views propose, Airline passengers may have saved 10 percent, but hundreds of
thousands of people have lost their job or their job security or their pensions (Morris, n.d.). Will
the future of telecommunication deregulation shadow the contentious opinions of airline
In 2009, the estimated spending in the US was approximately $8,000 per person (The
Commonwealth Fund, 2012). According to the American Telemedicine Association, the Patient
Protection and Affordable Care Act warrants a positive impact on telehealth (as cited in Roney,
2012). The major problems in the health system of the United States are continuing cost
inflation, inequitable and uneven access to appropriate and quality healthcare for large segments
of the population, and the practice of unhealthy lifestyles by many Americans (Bashshur, &
Shannon, 2009). In 2007, an estimated $2.2 trillion was allotted for healthcare alone in the US
(McCarthy, n.d.). The US continues to seek cost effective interventions to eliminate the current
national economical debt.
The Stevenson-Wydler Technology Innovation Act of 1980 focused on technology
transfer, while also investing in research and development (The United States Patent and
Trademark Office, n.d.). The National Medal of Technology and Innovation was awarded to the
US in 1985 as a result of the established Technology Innovation Act of 1980 (The United States
Patent and Trademark Office, n.d.). The largest overhaul of the United States
telecommunications sector took place in 1996, when the Communications Act of 1934 was
amended (Yoo, 2011). The 1996 Act envisioned a network of interconnected networks that are
composed of complementary components and generally provide both competing and
complementary services (Economides, 2005). Congress passed the Telecommunications Act of
1996 with a goal of producing more competition, more diversity viewpoints, lower prices for
consumers, and more wealth and jobs for the economy (Wexler, 2005). The
Telecommunications Act of 1996 was supposed to save consumers $550 billion, including $333
billion in lower long-distance rates, $32 billion in lower local phone rates, and $78 billion in
lower cable bills (as cited in Wexler, 2005). This act was predicted to increase the job market
with an additional 1.5 million jobs, and boost the USs economy by $2 trillion (Wexler, 2005).
However, the Telecommunications Act of 1996 decreased the economy by approximately $2
trillion, and eliminated half a million jobs (Wexler, 2005). In 2013, The US Department of
Health & Human Services proclaimed a $1 billion initiative to promote healthcare innovations
that should lower costs and deliver better outcomes (The Department of Health & Human
Services, 2013). A century of continued emphasis on technology, innovation, and
telecommunication in the US has allowed integration and expansion of the healthcare
The most common ways states are providing coverage for telehealth services is through
the Medicaid program and through private insurance plans (National Conference of State
Legislatures [NCSL], 2013). Currently, Medicaid is offering reimbursement for telehealth
services in 42 states (NCSL, 2013). Fifteen states now have private insurance plans that also
cover telehealth services (NCSL, 2013).
The Kansas Department of Health and Environment (2013) defines telemedicine as a
technological link between healthcare practitioners and patients for several purposes including:
increase cost efficiency, reduced transportation expenses, improved patient access to specialists
and mental health providers, improved quality of care, and better communication among
providers. Kansas Medicaid will reimburse when telecommunication technology is used for
services including: office visits, individual psychotherapy, and pharmacological management
(Kansas Department of Health and Environment, 2013). As of July 1, 2013, Kansas enrolled the
HB 2201. The Kansas Legislation states:
HB 2201 creates the Telecommunications Study Committee, further deregulates
telecommunications in Kansas, makes changes to distribution from the Kansas Universal
Service Fund (KUSF), and allows the Board of Regents (Board) to charge fees for
services provided by the KAN-ED program. (HB 2201, 2013)
The Kansas HB 2201 removes the Kansas Corporation Commission regulation of
telecommunications carriers and electing carriers (HB 2201, 2013). State legislatures give
public utility commissions the authority to develop and enforce rules about the way in which
telecommunications companies behave, including whether they must file retail-pricing
information with the commission (tariffs), whether they must meet certain quality-of-service
standards, whether they must provide basic service to operate as carriers of last resort, and
whether they are eligible for high-cost or Lifeline support. The increasing rise of healthcare
related technological advances in the US leaves policy makers responsible for determining if
telecommunication regulation or deregulation is safest and most cost effective for healthcare in
the US.
Construct the Alternatives
Alternative Number One
The first alternative omits any changes to Kansass recently passed bill, HB 2201.
Without alternation in the HB 2201, the Kansas Universal Service Fund will allow creation of a
Telecommunications Study Committee. This committee will be given state funding, which will
allow for telecommunication analysis. Without changes, the Kansas Corporation Commission
will no longer regulate telecommunication carriers. The 2013 Summary of HB 2201 states:
Specifically, electing carriers are no longer required to do the following: serve as carrier
of last resort; offer single residential local exchange access lines in the electing carriers
exchanges; set rates for single residential or business local exchange access lines in its
rural exchanges that are no higher than the average of such rates for single residential or
business local exchange access lines respectively in its urban exchanges; be subject to
price cap regulation for lifeline services; and comply with requirements concerning
intrastate access changes. (p. 1)
However, the HB 2201 will allow the Kansas Corporation Commission to review the Kansas
Universal Fund for cost effectiveness, and make modifications if necessary (HB 2201).
Alternative Number Two
The second alternative would be to completely abolish the HB 2201 enacted by the State
of Kansas Legislature. Eradicating this bill would allow telecommunication regulation via the
Kansas Corporation Commission. Economides (2005) states, Making effective use of elements
of market organization in many telecommunications contexts often requires considerable and
detailed regulation. Removal of the HB 2201 will allow for the commission to regulate
telecommunication; it will also prevent the free market approach from deserting the average
customer (Martin, 2008). In contrast, omission of this bill may pose threats to the state of Kansas
including: divergence between cost and prices as costs fall much faster than prices, creation of
barriers to entry perpetuating their profitable existence, and the increased political influence on
regulation (Economides, 2005). Commission Administrative Law Judge Walter Miller pointed
out, Small as it is in terms of its budget and number of personnel, and even if it had no other
communications responsibilities, the FCC does not have the resources to regulate the Bell
System in any meaningful fashion (Kelly, 1982). According to Kelly (1982),
An extension of this hypothesis is that effective regulation would not be possible even
with unlimited resources: the nature of the common cost problem together with the
sophisticated and rapidly change technology simply make the textbook process of rate of
return regulation infeasible. (p. 20)
Alternative Number Three
Revision of the HB 2201 passed by the Kansas State Legislature is the third option.
Revision would include pursing telecommunication deregulation provided in this bill, yet adding
an extensive emphasis on consumer protection regulation. Martin (2008) states:
In order to have credibility when removing unnecessary or outmoded regulations, those
of us who adhere to a market-based philosophy must be willing to acknowledge an
important fact: There are times when regulators may need to step inwhen the
marketplace does not allow for sufficient competition to a former monopoly, when the
market needs to be open to new entrants and technologies, or when larger societal goals
such as ensuring the needs to public safety, fall outside the markets scope. (p. ii)
With complete telecommunication deregulation, Kansas may jeopardize consumer safety.
Deregulation will also prevent the governments ability to regulate monopolies through antitrust
laws, ultimately causing higher costs for consumers. However, strict government regulation may
endanger competition by prohibiting a market leading to several limitations and a decrease in
competitive prices. Before deciding on regulation or deregulation examine Martins approach to
successful telecommunication (Martin, 2008). Martin (2008) conveys:
they should be mindful that there is no need to throw the baby out with the bath water
and sacrifice one for the other. Just as those of us who prefer competition to regulation
must be willing to acknowledge when there is insufficient competition and the market is
not functioning properly, those who instinctively call for more regulation and government
intervention need to be mindful of the negative effects that such an approach can have
and did have in the past. (p. viii)
Select the Criteria
Bardach (2012) states, I use efficiency more or less as the term is used in economics, for
maximizing the aggregate of individuals welfare as that welfare would be construed by the
individuals themselves (p. 33). Bardach (2012) affirms an absence of efficiency consideration
for policy decisions frequently overlooks the welfare of the little guy. He then states, The
little guy may be little, but in a proper efficiency analysis, he at least shows up to be counted
(Bardach, 2013, p. 33). An early 20
century Italian economist and sociologist, Vilfredo
Federico Damaso Pareto, studied economic efficiency (Martorana, 2007). Pareto efficiency says
that an allocation is efficient if an action makes some individual better off and no individual
worse off (Martorana, 2007). The Research and Development (RAND) Corporation define the
social value of health care as the difference between the social value to health improvements due
to care (alternatively, the social benefits) and the social cost of providing that care (Garber,
Gates, Blume-Kohout, Burgdorf, & Wu, 2012). They also define the social value of an
innovative activity related to health care as the difference between the social benefit of resulting
improvements in population health and the social costs attributable to that activity (Garber et
al., 2012). The need for increased health care technology, telecommunications, and telemedicine
create a dual-sided argument when examining the efficiency of this matter. Many individuals
view health care innovation as a major contributor to the USs increased health care costs.
However, these advancements may also be perceived as the best hope to effectively meet
daunting cost and quality challenges (Garber et al., 2012). The RAND Corporation indicates
that the developmental costs of a modern invention, along with the total social benefit are
exclusively dependent on the frequency of its use (Garber et al., 2012). Kansass
telecommunication deregulation bill may allow these firms to abandon the less profitable rural
customer, or what Bardach (2012) defines as the little guy.
The Commonwealth Fund Commission on a High Performance Health System (2013)
articulates, Ensuring that patients have access to high quality care is fundamental to a high
performance health system and to improving population health. Thus, any action addressing
costs must preserve access and enhance equity. According to Daniels (2001):
This relationship between healthcare and the protection of opportunity suggests that the
appropriate principle of distributive justice for regulating the design of a healthcare
system is a principle protecting equality of opportunity. Any theory of justice that
supports a principle assuring equal opportunity (or giving priority to improving the
opportunities of those who have the least opportunity) could thus be extended to
healthcare. (p. 3)
Across the United States, there are striking variations in the way medicine is practiced, which
affect both the quality and quantity of health care patients receive (Aligning Forces for Quality,
2010). Deregulation of telecommunication may discontinue service delivery in the hard-to-reach
geographical locations. If their services are not discontinued, telecommunication companies
could potentially mitigate landline availability, or significantly increase prices in rural areas due
to supply and demand. The economic costs are simply too big, some will say, to deploy
broadband to rural America (Macher & Mayo, 2011). Without broadband capability, the rural
community will lack the main component required for telemedicine. Will deregulation of
telecommunication in Kansas prevent equality, or preclude the little guy from accessing
Project the Outcomes
Carrying out the first alternative would avoid alteration to Kansass current HB 2201.
The recently enacted bill renders the Kansas Corporation Commission incapable of regulating
telecommunication carriers. Over centuries numerous US citizens have been victimized due to
the deregulation of bills, for example the Airline Deregulation Act of 1978. Advocates of airline
deregulation deem this to be a monumental event, while others find it to be the source of the
industrys record economical declines (Maynard, 2008). According to The National Conference
of State Legislatures, In an effort to improve access to care for rural Americans, telehealth
networks are being increasingly used to connect patients and providers in different locations
using a unique set of tools fueled by technology (NCSL, 2011). This advancement will provide
a telecommunication two-way video connection for individuals at their home or at a local
hospital with immediate access to a specialized physician at a central hub (NCSL, 2011). If
successful, the HB 2201 will provide consumer protection through free marketing, while also
allowing for technology advancement. However, freeing telecommunication companies from
state regulation may potentially pose a threat to the rural community and the elderly population.
Many believe abandonment of rural landline customers may follow deregulation of
telecommunication. Are expenses of telemedicine equipment and the undetermined possibilities
of this forthcoming innovation worth risking the health of US citizens? Further consideration
may be necessitated, despite the states best effort to offer sufficient healthcare in the rural
Eradicating Kansass HB 2201 would be the second alternative presented. By eliminating
the HB 2201, the Kansas Corporation Commission would have the power to regulate
telecommunications in the state of Kansas. The purpose for telecommunication regulation dates
back to the 1984 when the long-distance monopoly held by the American Telegraph and
Telephone Corporation (AT&T) was destructed (Economides, 2005). An antitrust suit was filed
again AT&T when they refused to interconnect with independent telephone companies
(Economides, 2005). At this time telecommunication was considered to be desirable for the
public. This was the first reason for which regulation at the federal and state levels was imposed
with a requirement to interconnect public switched telecommunications networks (Economides,
2005). Access to emergency assistance is a vital service that must be provided to all individuals
(Economides, 2005). Without telecommunication regulation companies will not be responsible
for maintaining services that offer safety standards (Economides, 2005). Is it acceptable to
implement a telecommunication method that to several, previously failed? Will deregulation in
the state of Kansas hinder customers needing to make an emergent telehealth call?
The third alternative proposes revision of the state of Kansass HB 2201. Revision would
not eradicate telecommunication deregulation in Kansas; however, modification of this bill
would include regulating to ensure customer safety. According to Martin (2008), Even when we
are successful in achieving a competitive market, certain social objectives take precedence over
the unencumbered function of the marketplace. It is suggested that the video market is not
currently competitive enough to protect all consumers (Martin, 2008). In the last decade
competition has led to an increase in cable rates when compared to newer, more modern
communication services (Martin, 2008). The increased pricing of cable companies displays
evidence that some government regulation is necessary. The advancement of telemedicine, via
telecommunication, is rapidly approaching the USs health system. A balance in
telecommunication regulation and deregulation will promote competition, innovation, and
protect the consumer at every location.
Confront the Trade-offs
Today, what we call telemedicine, telehealth, or e-health encompasses any existing or
proposed configuration of technology, organization, and human resource (Bashshur, Shannon,
& Sapci, 2005). Sanders, The Father of Telemedicine, introduced telemedicine in 1967. Despite
several decades expended on evolving the idea of telemedicine, the US has yet to accept a
definitive definition for this technological advancement (Bashshur, Shannon, & Sapci, 2005). As
a result, the lack of a precise definition compromises our ability to evaluate the true concept
in full fidelity (Bashshur, Shannon, & Sapci, 2005).
The first option coincides with Kansass recently enrolled bill, HB 2201. The US
government continues to encourage telecommunication deregulation to promote telehealth
(Darkins & Cary, 2000). The Telecommunications Deregulation Act of 1996 established a
Universal Service Program, the intention of with has been to subsidize telecommunications
companies to provide telehealth and Internet service to rural areas (Darkins & Cary, 2000). The
HB 2201 minimizes the Kansas Universal Fund, which will abolish extra funding for
telecommunication services in rural areas (HB 2201, 2013). This bill may be inhumane to
citizens of the rural community, in that telemedicine has been presented as an effort to improve
access to care for the rural population (NCSL, 2011). With deregulation of telecommunication
companies and reduction of the Kansas Universal Fund, it is impossible to believe that the rural
society, or what Bardach (2012) refers to as the little guy, will reap any benefits.
Secondly, complete regulation of telecommunications will be a significant failure of
the US political, legal, and regulatory systems if the interest of entrenched monopolists, rather
than the public interest as expressed by Congress, dictate the future of the US
telecommunications sector (Economides, 2005). According to Economides (2005), there are
may be drawbacks and costs associated with telecommunication regulation including:
Regulators generally do not have the latest technological information, regulated firms
may be able to use the regulatory setup to create barriers to entry, the regulatory setup is
bureaucratic, there is significant rent-seeking activity, and it is difficult to regulate new
and evolving products. (p. 11)
However, regulation may be beneficially by enforcing safety criterions to promote social welfare
(Economides, 2005).
The final alternative includes revision of the HB 2201 enacted in the state of Kansas. The
revision would involve a continuance of telecommunication deregulation; however, in addition
to a comprehensive emphasis on consumer safety. Revision of the HB 2201 is without acceptable
trade-offs. This option will put in place the appropriate regulatory framework that achieves
the twin goals of spurring investment and establishing open platforms to deliver choice and
innovation to consumers (Martin, 2008).
After completing an extensive amount of research on telemedicine, I found
telecommunication to be the foundation of this innovation. I believe revising the Kansas State
Legislatures HB 2201 would be both beneficial for the market, and the consumer. Complete
deregulation of telecommunication generates potential risks for the consumer. Conversely,
rigorous government regulation will create a precarious environment for the provider. Balancing
deregulation while focusing attention on the customers welfare appears to be the most
acceptable alternative to the HB 2201.
Bills concerning telecommunication will significantly affect the future of telemedicine.
Although I have stated my opinion on telecommunication, I view telemedicine as a contributor to
our nations current economical debt. The base of my decision is simplified by the results of a
Cochrane Review that evaluated the effects of telemedicine on healthcare practice and patient
outcomes. The review found studies showing various forms of telemedicine are feasible, but
there is not yet enough evidence to show the effects on health outcomes or costs of many
expensive uses of technology (Currell, Urquhar, Wainwright, & Lewis, 2010). Another example
includes The RAND Corporations prediction that health information technology (HIT) would
generate annual savings from improved efficiency alone of $77 billion per year (Mulcahy et
al., 2012). Unfortunately, after billions of dollar in federal incentives, including money
disbursed through the Health Information Technology for Economic and Clinical Health Act,
and billions more in private investment, HIT has not yet produced the promised benefits
(Mulcahy et al., 2012).

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