A few years ago, hospital administrators asked “What is Telemedicine?” Today, they want to know “How much will Telemedicine cost?” Now and then, hospital leaders are asking the wrong question. What they really want to understand is the return on investment (ROI). In every situation where inpatient telehealth is considered, costs factor prominently in the decision. But, let’s discuss savings and revenue generated from a well run telemedicine program. The key factors that drive our clients to implement telemedicine are:
- Impact on transfers
- Improved clinical metrics
- Patient and family satisfaction
- Physician retention
Impact on transfers
Reducing patient transfers is important for rural facilities and Critical Access Hospitals (CAH). Keeping patient care close to home provides benefits better follow-up coordination and increased access to support from family and friends. Whether transfers relate to cardiology, infectious disease, or neurology, the ability to keep these patients in-house improves not only patient care and family satisfaction, but also drives significant incremental revenue.
Hospitals using inpatient telemedicine because of the significant impact on revenue retention. For example: Take a hospital that has historically transferred approximately five patients per week because of lack of consistent cardiology coverage. By implementing a TeleCardiology program, the hospital estimates it can keep approximately two of those patients in house each week. At an average DRG of $7,500 per patient, that could deliver more than $750,000 in incremental revenue to the hospital per year. Additional revenue can easily justify the additional telemedicine costs, while also increasing patient access.
Improved clinical metrics
Clinical metrics are becoming more and more important to hospitals, not only in terms of impact on patient care and safety, but also in improving overall cost and economies of scale. With a 24/7/365 TeleStroke presence, many hospitals have become Joint Commission Certified Primary Care Stroke Centers. Hospitals without focused acute stroke programs may have TPA rates as low as 2 to 5 percent of acute stroke patients and, as a result, quality of care drops for both patients and families.
Another example is Tele-ICU. Tele-ICU programs can help hospitals achieve higher Leap Frog scores. These all have direct impact on not only the hospital’s bottom line but also quality of life for patients and their families, particularly if they have to drive long distances to the next closest hospital. The growing number of mental health patients that present in the Emergency Department (ED) provides its own set of challenges. Implementation of TelePsychiatry can reduce overall nursing costs, improve ED throughput by providing an appropriate path for care of psychiatry patients, and reduce extended boarding times in the ED.
Avoiding Center for Medicare and Medicaid (CMS) penalties are another source of telemedicine cost savings. Reimbursement for from patient care are moving from fee-for-service to value-based care. Access to specialist can help your facility avoid excessive readmissions. Hospital Readmissions Reduction Program (HRRP) began penalizing hospitals with patient rehospitalizations compared to similar facilities in late 2012.
Patient and family satisfaction
Hospitals have noted many benefits that patients and families report with the institution of inpatient telemedicine programs. Eagle can help you improve patient satisfaction by:
- Increasing the availability of dedicated providers when inpatient care is needed in the middle of the night
- Adding access to specialty care at your community hospital
- Enhancing the community’s perception of the hospital as a destination for healthcare (as opposed to an ER transfer center)
All of these are significant patient/family benefits. In addition, telemedicine consults can frequently be done on a scheduled basis in the hospital, addressing the age-old problem of patients and families waiting around for the specialists to arrive.
Evaluating physician retention
Historically, the daytime hospitalists have taken call coverage at night, often creating fatigue and resulting in quality of care issues. Implementing a TeleNocturnist program can improve physician retention, allow for overall improved quality of care during the night, and eliminate unnecessary transfers. Losing a permanent physician and replacing on an interim basis with locum tenens could easily cost the hospital $100,000 over a six-month period. Telemedicine costs can be easily offset by these savings. This does not include the impact of having to transfer patients because of lack of comprehensive coverage. In addition, response times are generally quicker from a telemedicine provider (Eagle Telehospitalists typically respond in 5 to 7 minutes) and can improve overall throughput in the ED.
Let Eagle help map out your telemedicine costs savings and demonstrate the business case for a new telemedicine program.