Cost Savings Associated with Home-Based Physiologic Monitoring

I have always been very enthusiastic about home-based health monitoring systems. I believe that these systems are now technically mature, some having been in the market for more than five years, and are easy for patients to use. Needless to say, easy Internet access for many homes also provides a major connectivity advantage. The cost-savings associated with monitoring systems for patients with chronic disease are also now well documented. Below is an excerpt from an article focusing on such savings (see: Savings from Home Monitoring). Boldface emphasis is mine:

Remote, home-based physiological monitoring of patients with congestive heart failure can save thousands of dollars per patient per year through fewer hospitalizations, according to a new report. The New England Healthcare Institute...has updated a report on remote physiological monitoring it published in 2004. The new data estimates an annual cost of $2,052 per patient for the monitoring technology. Add disease management software to the mix, and that price would go up to $2,802. The return would come from a 60% reduction in hospital readmissions for patients that have standard care and remote monitoring, and a 50% cut in readmissions for patients that participate in a disease management program along with the monitoring, report authors estimate. They also estimate savings of $3,703 per patient per year for those with remote monitoring and disease management programs, and $5,034 for those with remote monitoring and standard care. Consequently, the technology has the potential to save $4.7 billion to $6.4 billion a year, report authors conclude.

The New England Healthcare Institute is a health policy research organization with a focus on enabling innovation in health care. Their numbers quoted in the excerpt above ring true to me although I have never studied the topic in such depth. Sounds like a great deal for patients and their insurance companies alike, doesn't it? -- a 60% reduction in hospital readmissions for patients that have standard care and remote monitoring, and a 50% cut in readmissions for patients that participate in a disease management program along with the monitoring.

Well, it's not going to happen on a large scale but hopefully the idea will continue to be examined with small pilot projects. Why, you may ask? The answer is that not many health insurance companies will foot the up-front capital costs of $2,000-$3,000 for the monitoring equipment. Why, you may ask, when the ROI is so large and the quality of life benefits are so apparent? By way of contrast, the insurance companies will pay this amount of money for a minor surgical procedure without blinking an eye.

First of all, home health monitoring falls into the category of preventive medicine and chronic care. These are areas that are not well understood and well funded by the various payors. Secondly, this type of solution falls under the category of information technology, also an area not well understood by health insurance companies and governmental health agencies. Lastly, there is the question of exactly which providers will be monitoring the patients in their home settings when attached to the devices or uploading data? There is really no existing healthcare professional infrastructure to provide such services. I made reference to this problem in a recent note (see: The Need for a Preventive Medicine Infrastructure in the U.S.). Put another way, I believe that healthcare services that are not well understood will not get reimbursed despite their documented value in terms of future cost savings and quality of life.

Comments

[David Bear, MD]

A Deloittle Health Consumer survey indicates strong interest in home monitoring, especially help with medications. Medication non-compliance is an extensively documented source of greater than $100B in costs. A user friendly system which requires no new learning for patient or caregiver,eliminates errors in pill selection before they occur,and, through coaching and positive reinforcement, builds and documents adherence behavior will yield rapid ROI. Senticare has developed the Pillstation Monitored System, now commencing trials with public and private payors.

[Adam Peters]

I wrote up a school paper on this subject and the numbers seem to ring true. My paper was partly based on a Veteran's Affairs study from early in this decade. Even with the cost of the infrastructure there was a ROI. The part that I feel is really missing though is the motivation for the patient to utilize the remote monitoring. The patient needs some type of feedback or reinforcement. If they are just downloading or plugging numbers from their results into a system and only get feedback or interaction when things are dramatically bad then the user will likely lose interest and fall out of compliance.