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Is Telemedicine Cost Effectiveness Hard to Measure?

Posted by Lawrence Kerr on Thu, May 18, 2017 @ 06:43 AM

telemedicinecosteffectiveness.jpegA couple of decades ago, we started one of the first telemedicine programs in the country — a pilot program at a school-based health clinic.

Using clunky cameras and imperfect software, we were able to electronically connect passionate nurse practitioners with a pediatrician. For cases that would normally necessitate the parent leaving work, and taking the child out of school for an in-office visit, the nurse practitioners were able to quickly resolve most issues and get kids back to class.

At that time, the questions we got were of functionality: Are the cameras high resolution enough to convey the rash? Is telemedicine safe? Can a case really be communicated outside of an in-person conversation? Of course, times have changed. In 2017, telemedicine’s efficacy, logic, and impact has been demonstrated repeatedly. Every smartphone has a camera with dramatically better resolution than you’d ever need — and every pocket has a smartphone. Many patients are familiar with this kind of communication and are even demanding it.

The concerns have shifted from questions of functionality (will this work?) to questions of cost-effectiveness (will this make us money?)

So we were curious to read a recent research report called, “Cost-Utility and Cost-Effectiveness Studies of Telemedicine, Electronic, and Mobile Health Systems in the Literature: A Systematic Review."

The biggest takeaway of the report is: "There are few cost-utility and cost-effectiveness studies for e-health and m-health systems in the literature. Some cost-effectiveness studies demonstrate that telemedicine can reduce the costs, but not all. Among the main limitations of the economic evaluations of telemedicine systems are the lack of randomized control trials, small sample sizes, and the absence of quality data and appropriate measures."

In other words: it's not proven whether telemedicine is cost effective because there haven't been large scale studies completed.

Of course, we've found with many hospitals, clinics, and providers, that the ROI of using iClickCare is substantial, positive, and almost immediate. The demands of value-based pricing and the exigencies of the modern healthcare system make telemedicine almost indispensable for many providers and hospitals.

But we agree that more comprehensive, sophisticated studies are needed. 

So if you are someone who is considering using telemedicine for healthcare collaboration and care coordination, then you don't need a randomized study -- you want to know if the ROI will be adequate for you. In fact, the above study pulls out some important considerations when it comes to analyzing whether telemedicine will save you money in addition to improving care.

We recommend keeping three things in mind when looking at the cost effectiveness analyses of telemedicine:

  1. 1. Different kinds of telemedicine have different rates of Return on Investment. Different forms of technology need to be separated and then tested. Videoconferencing technologies and Store-and-Forward technologies both have roles in improving health. They each require totally different approaches and resources -- and have different ROIs.

  2. 2. Different approaches to delivery sites have different costs. Mobile and fixed-site use varies dramatically when it comes to the cost of devices, as well as the economic benefits of the programs. To further confuse things, the technology is evolving rapidly and can significantly affect any cost calculation.

  3. 3. Cost effectiveness is a macro-economic issue. Even very robust studies tend to not reflect the bigger dynamics at play in our megalith of a healthcare system. Overall, the cost effectiveness of telemedicine will vary the most depending on the macro-economic and policy decisions being made at a large scale. That said, a given healthcare provider or hospital system can see immediate, positive benefits to using telemedicine if expensive hardware isn't involved. While the overall trend waits for the nation, we see providers and hospitals finding phenomenal ROI in the meantime. 

To learn more about what we believe is the highest ROI, most cost effective, variety of telemedicine, download our Hybrid Store and Forward Quick Guide: 

ClickCare Quick Guide to Hybrid Store-and-Forward

Tags: care coordination, telemedicine law, telemedice reimbursement,, cost effectiveness

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