Long-Term and Post-Acute Care Providers Engaged in Health Information Exchange: Final Report. Telehealth Cost Considerations

10/29/2013

The cost of implementing and expanding the telehealth program was identified by EMHC CFO as a challenge. The home care agency invests a significant amount in the equipment (for example, the general cost of an in-home telehealth unit is approximately $3,500). Currently the EMHC has 79 units with an average of 65 deployed in a patient's home at any one time.

In general the EMHC finance staff reported that the home health care reimbursement structure does not have a mechanism to pay for the expense of telehealth equipment which is a limitation for program expansion. This is exacerbated by the payer mix and rural cost structure for some of the EMHC agencies. For example, services provided to patients in Hancock County are reimbursed under the rural cost structure where the state reimburses the agency 50% of the cost of delivering services. As a result, EMHC has had to rely on grant funding and philanthropic support to purchase telehealth devices.

The Beacon Community tested the application of tele-psychiatry between nursing homes and a geriatric psychiatric nurse, but they could not sustain the program under the current reimbursement structure.5 A final report on this project was under development at the time of the site visit.

There have been overall financial gains as a result of telehealth. EMHC has had an overall reduction in the cost of care per episode with telehealth. The visit utilization drops from 15-16 visits/episode to 13-14 visits/episode. To understand the impact, the cost difference between an in-home visit and telehealth encounter is $120.

Telehealth is also a strategy utilized in the Pioneer ACO, however, the cost-benefit ratio and overall financial impact was not addressed during the site visit. EMHS Pioneer ACO is working with EMHC to develop a congestive heart failure (CHF) telehealth program to serve patients who are not eligible for home health under Medicare because they are not homebound. The CHF telehealth program would make available telehealth equipment, daily telehealth monitoring and in-home nursing visits for medication adjustments. EMHC are pursuing this model because it had been effective in reducing ED use and hospital readmission rates during the Beacon project.

Technology

EMHC currently uses Phillips Healthcare Telehealth Solutions6 as their telehealth vendor. With the Phillips system, EMHC collects clinical data, questionnaire responses, and risk screen results. EMHC previously used video telehealth monitoring, but found it was not as effective except for monitoring particularly with behavioral health issues. With video telehealth, the lack of clinical data (such as vital signs) to track and trend status and changes proved more useful.

The telehealth tools provided by Phillips include both in-home devices and a cloud-based software application:

  • TeleStation. The base unit is placed in the patient's home to enable secure, two-way flow of information between the remote telehealth nurse (via the web-based clinical review software) and the patient.

  • Measurement Device. In addition to the base station, the patient may use in-home monitoring wireless devices to collect clinical measure data. Data is sent to the base TeleStation.

  • Web-based Clinical Review Software. The base station sends telehealth data to a cloud web-based software application where the patient's clinical measure data is stored. The home care agency/telehealth nurse accesses this program to review the patient data and determine clinical interventions.

The Phillips telehealth devices collects clinical measure data (described below in Telehealth Clinical Process) and can prompt the patient to submit responses to basic questions such as how they are feeling. The system also has the capability of providing education to the patient. The telehealth nurse evaluates the patient's clinical measure data daily in the Phillips web-based clinical software. The software displays current, past and trending data.

The telehealth software also provides validated patient surveys or screening tools to assess for risk and display current status (See Figure J-2 Patient Risk Summary). EMHC's telehealth system provides risk screenings, status, and evaluation tools are available for the following areas:

  • Probability of Readmission;
  • Medication Adherence;
  • Depression Scoring;
  • Nutritional Screening; and
  • Activities of Daily Living/Instrumental Activities of Daily Living.

FIGURE J-2. Patient Risk Summary

FIGURE J-2. Patient Risk Summary

Clinical Data and Clinical Process

Patients selected for the telehealth program enter data each day into their device and respond to questions and prompts. The data reported by the patient can include any of the following clinical data depending on their condition:

  • Blood pressure.

  • Weight.

  • Blood sugar.

  • Pulse.

  • O2 saturations.

  • Patient responses to individualized questions such as their
    • Shortness of breath symptoms;
    • Dietary compliance; and
    • Endurance level.

The telehealth nurse reviews the patient data every day. Physician orders for telehealth identify the parameters for appropriate data ranges. When the patient's telehealth data is outside of the range, the system triggers a "red flag," and the telehealth nurse calls the patient and provides consultation over the phone to determine the next level intervention (such as a home visit or physician notification). Most of the issues can be handled by the telehealth nurse over the phone, who also communicates with the home care nurse, particularly when a concern requires followup and a nurse visit is scheduled.

Telehealth Outcomes

To understand the impact that telehealth has on EMHS programs, EMHC measures key performance indicators and outcomes related to the Beacon Community, Pioneer ACO and PCMH programs. EMHC collects the following data on telehealth patients to track outcomes.

  • Patient identifier;
  • Primary telemedicine diagnosis;
  • Patient age;
  • Secondary diagnosis;
  • Payment source;
  • Number of hospitalizations for telemedicine diagnosis in previous 6 months;
  • Average cost of hospitalization;
  • Prior ED visits for primary telemedicine diagnosis in previous 6 months;
  • Average cost of ED visit;
  • Number of hospitalizations for telemedicine diagnosis while on program;
  • Home health/hospice in home nurse (RN) visit;
  • Average cost of in-home nurse (RN) visit;
  • Number of telemedicine encounters;
  • Average cost of telemedicine encounter; and
  • Health system cost savings.

    TABLE J-2. Telehealth Patient Outcomes Results by Diagnosis in 2012

  Diagnosis   # of
  Patients  
  Percentage Hospitalized 6 mo.  
Prior to Telemed*
  Percentage Hospitalized  
While on Telemed**
Percentage ED Visits
  6 mo. Prior to Telemed*  
  Percentage ED Visits  
While on Telemed**
CHF 57 86% 14% 84% 14%
COPD 36 83% 6% 83% 6%
Diabetes 15 53% 9% 53% 9%
Cardiac 54 56% 4% 56% 4%
Other 5 80% 0% 80% 0%

* Data obtained from patient interviews at time of admission to telehealth program. Patients admitted to hospital were admitted for their chronic diagnosis (CHF, COPD, etc.).
** Data represents actual hospitalizations/ED visits occurring during patient's length of stay on home health program for their telehealth diagnosis.


EMHS uses the telehealth data to calculate outcomes such as reduced hospitalizations and ED visits (Table J-2) as well as costs savings based on priority diagnoses (Table J-3). Overall EMHS has been able to quantify a significant impact on key performance indicators and costs for the 167 patients in the telehealth program in 2012, reducing hospitalization and ED visits be an average of 65% for target diagnoses resulting in an estimated $2.1 million in health care savings.

TABLE J-3. Estimated Health Care Cost Savings Results by Diagnosis


  Diagnosis     No. of Pts   Savings
CHF 57   $490,049  
COPD 36 $373,365
Diabetes 15 $118,386
Cardiac 54 $992,267
Other 5 $84,482

NOTE: The estimated savings is net after accounting for the cost of telehealth visits and technology.


  1. CMS prohibits payment for telemedicine services in Metropolitan Statistical Areas (MSAs). Despite a shortage of geriatric psychiatry services Medicare will not fund the geriatric tele-psychiatry service.

  2. See http://www.healthcare.philips.com/main/products/telehealth/.

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