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FCC Releases Report and Order Establishing Healthcare Connect Fund

$400 Million Available Annually


Broadband is often an equalizer when it comes to the disparity between rural and urban healthcare delivery. The FCC reaffirmed its commitment to rural healthcare and telemedicine as it releases a comprehensive report on the use of broadband and rural healthcare. In fact, one of the last reports released by the FCC in 2012 was a report and order reforming funding mechanisms for rural health care by creating a Healthcare Connect Fund (HCF) with $400 million annually.

The Importance of Broadband for Telemedicine: FCC Initiatives Spur Innovation and Expand Availability

One of the national initiatives emphasized in the FCC's National Broadband Plan was healthcare and telemedicine. The FCC summed up the shortcomings of the healthcare system in the U.S. and highlighted the importance of broadband.

The country is expected to have a shortage of tens of thousands of physicians by 2020.8 An aging physician workforce that is nearing retirement and working fewer hours exacerbates the situation.9 Supply will be further strained if previously uninsured Americans enter the care delivery system.

Another significant problem plaguing the nation’s health care system is the fact that there are health disparities across different ethnic groups. “African Americans, for example, experience the highest rates of mortality from heart disease, cancer, cerebrovascular disease, and HIV/AIDS than any other U.S. racial or ethnic group. Hispanic Americans are almost twice as likely as non-Hispanic whites to die from diabetes. Some Asian Americans experience rates of stomach, liver and cervical cancers that are well above national averages.”10 Further exacerbating this problem, members of ethnic groups are less likely than whites to have health insurance, have more difficulty getting health care and have fewer choices in where to receive care

Gigabit Broadband Speeds Spur Innovation

The purpose of the HCF is to expand broadband access to health care providers and to encourage state and regional broadband networks for health care. The HCF replaces the Internet Access portion of the FCC's current Rural Health Care Program, provides continuing support for the Rural Health Care Pilot Program (RHCPP) consortia as they exhaust any remaining funding already committed under that Pilot Program, and makes permanent many aspects of the RHCPP. The FCC retained the existing funding of the difference between urban and rural rates for telecommunications services

According to the FCC Order:

"Today, the Commission reforms our universal service support programs for health care, transitioning our existing Internet Access and Rural Health Care Pilot Programs into a new, efficient Healthcare Connect Fund. This Fund will expand health care provider (HCP) access to broadband, especially in rural areas, and encourage the creation of state and regional broadband health care networks. Broadband connectivity has become an essential part of 21st century medical care. Whether it is used for transmitting electronic health records (EHRs), sending X-rays, MRIs, and CAT scans to specialists at a distant hospital, or for video conferencing for telemedicine or training, access to broadband for medical providers saves lives while lowering health care costs and improving patient experiences. Telemedicine can save stroke patients lasting damage, prevent premature births, and provide psychiatric treatment for patients in rural areas. Electronic Health Records avoid duplicative medical tests and prescription errors, and gives doctors access to a patient’s entire medical history. Telemedicine also reduce provider expenses.

FCC and the Rural Healthcare Pilot Program: Early Effort to Expand Broadband Access in Rural Areas

The HCF will support the cost of (1) broadband and other advanced services; (2) upgrading existing facilities to higher bandwidth; (3) equipment necessary to create networks of health care providers (HCPs), as well as equipment necessary to receive broadband services; and (4) HCP-owned infrastructures where shown to be the most cost-effective option.

Not All Broadband is Created Equal; Different Broadband Technologies

The following are significant aspects of the HCF:

  • The HCF will allow eligible providers the option of purchasing services or designing and building networks if they can demonstrate that their choice is the most cost-effective option.
  • Up to $150 million is available for infrastructure funding each year to be used in combination with services purchased from commercial providers.
  • Healthcare Providers will be required to contribute 35%. Rural and non-rural HCPs may participate in the fund but non-rural providers must be part of a consortium and a majority of the consortium members must be rural, as defined by the FCC.

Broadband Speed: How Much Do You Need?: Speeds Have Become As Important as Physical Access

Large health care providers are limited to $30,000 per year for recurring charges and $70,000 for non-recurring charges over a five-year period.

Gigabit Squared Offers $200 Million for High Speed Broadband Application Development

In addition, the FCC also simplified the application process, established goals and performance measures and created a new Pilot Program to test the technical feasibility and economic reasonableness of including skilled nursing facilities as HCF participants. The FCC committed $50 million to the new Pilot Program over a three-year period.

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