Can telemedicine save money?

Photo by Ted Eytan (Creative Commons / Flickr)

This study capitalized on a natural experiment: A company that owned several nursing homes in Massachusetts decided to invest in telemedicine, technology that allows patients and doctors two-way communication via videoconferencing. To study its effects, researchers convinced the company to randomize which nursing homes got the new technology first, creating a control group (the sites that went the first year without telemedicine) and the experimental group (the nursing homes that received the technology in the first year).

Hospitalizations from the nursing homes in the control group went down by 5.3% while the hospitalizations in the nursing homes with telemedicine capabilities went down by 9.7%. Though the difference between the two groups was not statistically significant (no p-value reported), the reduction still seems to be due to telemedicine: The nursing homes that had telemedicine but did not make very many calls did not reduce their hospitalizations, whereas those who actually used the technology frequently decreased their admissions by an additional 6%, which was determined to be statistically significant. The average utilization rate was 21 calls per month from each facility (range 15-545) and 30 calls per month from the active nursing homes.

The telemedicine service costs $30,000 per year per nursing home, and only covered nights and weekends. The authors used data from another study to estimate that each prevented hospitalization would have cost Medicare/Medicaid $10,000 for a total savings of $151,000 saved per year at each nursing home.

Though the telemedicine technology reduced admissions for this group, the article points out that Medicaid/Medicare payments actually create a financial incentive for nursing homes to get their patients readmitted to the hospital. Payments to nursing homes increase the first few days after an admission, but decrease after that.

Commentary

I recently got a call from an on-call physician at a nursing home for a patient transfer to the emergency room. The doctor was told by the on-site staff that the patient was bleeding around an IV line. I suggested she see the patient and try holding pressure, but she claimed the nurse had tried that already. When the patient arrived, he had minimal bleeding that stopped after holding pressure. His blood count showed he had not bled a significant amount prior to coming to the ER.

If the nursing home had telemedicine services, a physician could have seen the bleeding with a webcam and instructed the nurse on how to hold pressure, avoiding a costly and unnecessary ER visit.

Though he was not admitted, the patient did utilize two ambulance rides to and from the hospital for a service that can be done by anyone in the public that has taken basic life support or CPR classes. The study only evaluated savings on hospital admissions, but it is likely that many ER visits were avoided as well.

These savings go to a patient’s insurance, creating a lack of incentive for nursing homes to adopt this technology. Unless insurance companies pay for it, this technology is not likely to be widely adopted.

Grabowshi, D.C. and O’Malley, A.J. Health Affairs. 2014; 33 (2): 244-250.

by

Laura Medford-Davis, MD