TEM: How Do Heathcare Providers Deal With the Impact of HIPAA on Their Telecom Expenses

Updated on March 31, 2023

Telecom expense management firms such as RadiusPoint in Florida help clients in multiple industries control and decrease their technology expenses. In the healthcare industry, these costs have drastically risen over the past few years with the pandemic and the unintended consequences of HIPAA. This article covers in details how healthcare providers have reacted to this trend, and implemented long-range plans to curb an unsustainable rise.


The Health Insurance Portability and Accountability Act (HIPAA) was enacted in 1996 to protect the privacy and security of patients’ health information (the law says “personal information”). The law has had major unforeseen consequences for healthcare facilities: their telecom expenses have shot up.

The effects of the rise in costs have been compounded over the past three years by the lockdowns and the extensive recourse to telemedicine consultations.

In response to these effects, healthcare providers have implemented a variety of cost-reduction programs.

Background data

Telecommunications costs have been on the rise in the healthcare industry for at least 3 reasons:

A.    The growth in the number of connected devices (especially mobile devices) and the demand for data has increased the cost of telecommunications infrastructure.

B.    Healthcare providers are increasingly using telemedicine consultation; these require high-speed internet connectivity and specialty video conferencing equipment.

C.    The strengthening of regulations related to patient privacy and data security has increased the cost of maintaining secure communication channels.

Let’s take up 11 ways the regulations has pushed up these costs:

1.    Data Encryption Requirements: HIPAA regulations require healthcare providers to “implement a mechanism to encrypt and decrypt electronic protected health information” to ensure the security of patient data transmissions (source: HHS.gov). Healthcare providers’ investments in expensive encryption technology add to the overall cost of telecommunications.

2.    Secure Messaging Requirements: HIPAA regulations also require healthcare providers to use secure messaging applications that meet specific security and privacy standards to communicate patient data. The applications often require costly customization and integration with existing telecommunications infrastructure.

3.    Access Control Requirements: The HIPAA Security Rule requires healthcare providers to implement “technical policies and procedures for electronic information systems that maintain electronic protected health information to allow access only to those persons or software programs that have been granted access rights” to ensure access control (source: HHS.gov).

4.    Healthcare providers must invest in technologies such as secure authentication and authorization systems, which are expensive to implement and maintain.

5.    Audit Requirements: HIPAA Security Rule requires healthcare providers to “implement hardware, software, and/or procedural mechanisms that record and examine activity in information systems that contain or use electronic protected health information” to maintain audit records (source: HHS.gov). In order to maintain detailed records of all patient data transmissions (including over telecommunication lines), healthcare providers must invest in audit trail technology to track all patient data transmissions.

6.    Employee Training Requirements: HIPAA regulations require healthcare providers to train all employees on the proper handling of patient data, including telecommunications. This requires healthcare providers to invest in employee training programs.

7.    Penalties for Non-Compliance: HIPAA regulations include significant penalties for non-compliance with patient data privacy and security requirements. These penalties can include fines, loss of reputation, and legal action. This entails heavy investment in compliance monitoring and enforcement activities.

8.    Increased Liability Insurance: HIPAA regulations have increased the liability of healthcare providers for breaches of patient data privacy and security. This has led to an increase in liability insurance premiums.

9.    Data Backup and Recovery Requirements: HIPAA regulations require healthcare providers to have a data backup and recovery plan in place in case of data loss or theft.

10.  Third-Party Vendor Requirements: HIPAA regulations require healthcare providers to ensure that any third-party vendors they use to process patient data, including telecommunications, meet the HIPAA security and privacy standards.

11.  Data Disposal Requirements: HIPAA regulations require healthcare providers to dispose properly of patient data, including telecommunications, when it is no longer needed. This requires healthcare providers to invest in secure data disposal technology and processes.

Due to the legal and financial consequences of breaking HIPAA rules, healthcare providers have made these investments.

To counter the compounding effects of the pandemic in the past 3 years and protect their P&L, they have implemented a variety of TEM programs. Telecom expense management programs aim to reduce expenses while maintaining or improving the standard of care provided to patients.

The second part of this article takes a look at the cost reduction programs.

Telecom expense management

Consolidation of telecommunication services:  One program implemented by healthcare providers consolidating telecommunication services under Vendor Managed Services agreements. These involve combining multiple telecom services, such as internet and phone, into a single package. By doing this, healthcare providers can negotiate better rates with telecom providers and simplify their telecom infrastructure, which can reduce costs.

TEM software: Another cost-reduction program implemented by healthcare providers is the use of telecom expense management (TEM) software platforms. These platforms (usually SaaS) helps providers track and manage their telecom expenses more effectively. TEM software can identify areas of waste or inefficiency in telecom spending and provide insights into ways to reduce costs. For example, TEM software can identify employees who are not using their assigned mobile devices efficiently or identify excessive usage of data services.

Telecom expense management software can also help healthcare providers monitor compliance with telecom regulations related to patient privacy and data security. By providing detailed information about telecom usage, healthcare providers can ensure that they are meeting regulatory requirements and avoid potential fines or other penalties. Another example is the transmission of photos of patients and the recording of private conversations: these prime targets for the HIPAA compliance police can be avoided by requiring all mobile devices to be bridled by equipment vendors. The policy framework to control purchases can be defined by TEM specialists such as RadiusPoint.

Virtual meetings: Virtual meetings and teleconferencing have curtailed travel expenses. Telemedicine is one of the most significant contributors to the rising cost of telecom in the healthcare industry. However, virtual meetings and teleconferencing reduce the need for in-person meetings, which in turn reduce travel expenses and associated telecom costs. Virtual meetings and teleconferencing can also improve collaboration between healthcare providers and they allow for a more efficient use of physicians’ time.


The ultimate objective of a healthcare provider is to deliver quality care to patients and accelerate the healing of their physiological or mental conditions. At the same time, it is obvious that the profit motivation is never far away, if only to enable healthcare facilities to continue operating.

Despite the burden of toughening regulations, actors in the industry have successfully implemented cost-reduction programs addressing the rise in the costs of telecommunications, directly linked to HIPAA regulations and to the intense use of telemedicine during the pandemic.

An examination of the cost-reduction programs shows that all the types of measures adopted definitely fall within the purview of telecom expense management. TEM is the only methodology covering sets of processes that efficiently reduce telecommunication expenses.

The word “efficiently” here does not just mean the rate of decrease of such expenses, but also the capacity of the methodology to avoid disrupting the operational environment of these facilities. Knowing the consequences on the standard of care of telecom disruptions, it is very clear that these programs should be implemented with care, and under the advice of TEM specialists.

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The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.