Telemedicine ROI: A Needle in a Haystack

August 15, 2012
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If your facility or practice is seriously considering a telemedicine program, you understand the meaning of the title of this blog post.  Telemedicine Return on Investment articles are few and far between.

Chances are you’ve seen the same studies I have.  They’re either such small studies they are almost anecdotal or they are limited to what I call a telemedicine niche – a super-specialized area of telemedicine.

If your facility or practice is seriously considering a telemedicine program, you understand the meaning of the title of this blog post.  Telemedicine Return on Investment articles are few and far between.

Chances are you’ve seen the same studies I have.  They’re either such small studies they are almost anecdotal or they are limited to what I call a telemedicine niche – a super-specialized area of telemedicine.

So it’s rather refreshing to find some ROI nuggets in the new FCC report on Telemedicine, called  Wireline Competition Bureau Evaluation of Rural Health Care Pilot Program Staff Report,” which came out this week, even though hard numbers are still elusive.  Most of the data is in the form of “savings” or “projections.  They aren’t readily apparent, so let me point them out to you.

The first two which relate to program savings are in the summary on Page 3:  “The Palmetto State Providers Network, located in South Carolina, reports that it has saved $18 million dollars in Medicaid costs over 18 months as a result of its telepsychiatry program.”  And, “In South Dakota, the Heartland Unified Broadband Network (HUBNet) estimates that hospitals in its network have saved $1.2 million in transfer expenses over a 30-month period, following the implementation of electronic Intensive Care Unit (e-ICU) services.”

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You won’t find the next ones that are patient focused until Page 49:  “HUBNet and MTN cite reduced patient travel as a sizable cost-saving measure brought about by an increase in telemedicine and telehealth applications.  MTN reports that in 2009, its patients avoided 1,700 round trips from rural areas of Missouri to specialist clinics in Columbia and Kirksville, saving 538,000 miles of travel and over $293,000 in fuel costs alone.”  And, “PSPN reports that Emergency Department psychiatry treatment costs dropped from $2,500 to $400 per patient, per day as a result of its telepyschiatry program.  As a result, PSPN has realized $18 million dollars in Medicaid savings.”

Then there are the future savings on Page 50:  “The Adirondack Champlain Telemedicine Information Network (ACTION) anticipates $9 million in future operating cost savings as a direct result of the provision of tele-cardiology, tele-trauma, tele-mental health, tele-neurology and tele-respiratory services.”  And, “Telemedicine applications have also created opportunities for increased revenue streams for rural Pilot participants. By keeping patients in rural hospitals, and by continuing to serve patients in rural clinics,
telemedicine can provide rural HCPs with opportunities to retain or increase their revenues.  Most rural HCPs operate on a very thin margin, and many operate at a loss.  For rural HCPs, broadband connections mean they can use telemedicine to retain patients and consult with specialists remotely.”

And still more projections of savings on Page 52: The North Country Telemedicine Project (NCTP) predicts that telemedicine capabilities will enhance local inpatient hospital revenue by nearly $4.1 million due to increased retention of patients across five specialties – general surgery, cardiology, gastroenterology, oncology and pulmonology….Likewise, St. Joseph’s Hospital projects that initial telehealth services for ER, ICU and behavioral health will generate $25,000 in revenue each year.

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As it happens, Jon Shankman, vice-president of analytics for AMC Health, touches on this lack of ROI support in a blog post, titled “The Future of Telehealth“ on the advanceweb.com Web site.

He says:

Simply put, the payers and providers need more proof. They’re skeptical
and want airtight, practically guaranteed outcomes before overhauling
their business models again. Changing their minds requires efficacy
studies of telehealth; studies that meet the criteria of the
peer-reviewed research arena strong enough to counter all potential
biases and to satisfy diehard naysayers.

And they’ve been waiting a long time:

Remember, these are the same executives still waiting for the billions
of dollars in savings current disease management methods promised them
20 years ago.

The ROI is there.  We just need one large sample study that shows ROI on telemedicine in primary care or major specialty, and I’m optimistic there are several underway right now.