Will telehealth really save money for payers? There are lots of small studies documenting cost effectiveness, and we’ve reported on some:
KentuckyOne To Offer 24/7 Telemedicine Service all members
But at this point, there is little data from system-wide adoption of telehealth. That’s why the results of a Veterans Health Administration (VHA) study (see Veterans Health Administration Home Telehealth Program Cuts Inpatient Admissions by 20% ) – and the application of those study results to Medi-Cal done by AgeTech California (a partnership of Aging Services of California and the California Association for Health Services at Home) – made interesting reading (see Home Telehealth in California).
The VHA conducted a study on the cost effectiveness of telehealth, the Care Coordination/Home Telehealth (CCHT) program study, with 17,025 program participants. The study selected “appropriate home telehealth technology, gave the required training to the patient and caregiver, reviewed telehealth monitoring data, and provided active care or case management.” The study applied three types of functions using telehealth technologies – remote patient monitoring, medication management, and care transitions.
The results? The cost per study participant was $1,600 per year (based on a per-patient cost that includes care coordinator time, expenses related to technology and equipment, and overhead), which is significantly less when compared with annual per-patient costs of $13,121 for the VHA home-based primary care service. Additionally there was a 25% reduction in bed days of care and a 19% reduction in hospital admissions. For depression in particular, service utilization went down 56.4% and other mental health service utilizations went down a total of 40.9%.
What if this methodology was adopted by Medi-Cal (California’s Medicaid program)? That’s the proposition forwarded by the AgeTech analysis. The analysis selected four common chronic conditions – diabetes, chronic heart failure (CHF), chronic obstructive pulmonary disease (COPD), and mental health – that represent 22% of Medi-Cal patients.
|Estimated Medi-Cal Savings Resulting From Decreased Hospital Admissions Through The Use Of Home Health Technologies|
|Condition||Home Health Medi-Cal Patients||Hospital Admissions||% Decrease in Admissions||Medi-Cal Savings|
AgeTech also estimates that potential annual savings for the total home health population of Medi-Cal and Medicare patients in California (based on the assumption of a 19% reduction in hospitalizations and that 60% of all Medicaid/Medicare readmissions are telehealth appropriate) stands at $379,873,488.
What does this study tell us? Not only does technology have the potential to improve access to care, but that the potential for cost savings is real. As more states, private payers, and provider organizations look to expanding the use of technologies, I think we’ll see more studies showing the benefits that technologies bring. In the meantime, the goal for your organization is to take a close look at both your technology options and your strategy to find where they can lead your organization into the future (see The Strategy Of Tech Investment and What, How & When – Understanding Tech In A Post-Reform Market ). Even if we don’t yet understand all the details, its important to understand all the implications.