While many believe telemedicine startup costs to be high, telehealth and remote patient monitoring (RPM) can in fact save your organization millions of dollars per year by reducing a patient’s number of hospital readmissions.
It’s no wonder that up to 76 percent of US hospitals have started connecting doctors and patients remotely via telehealth, an uptake of 35 percent from a decade ago.
Read on to understand why the benefits far outweigh the “perceived” costs of telemedicine, and learn about examples of organizations who have invested in these programs to successfully improve savings in the long run.
Why Telehealth Is Important and Its “Cost” to Patients & Health Systems
When deciding on whether to implement a telehealth program, considering the possible benefits and long-term savings is important to assess a program’s overall value for your organization.
A study revealed that compared to an average of $136 to $176 for an in-person acute care visit, the cost of telehealth averages only $40 to $50 per visit. Using these upper limits as estimates, that would mean substantial savings of $126 per patient visit for your organization with telehealth and RPM.
In fact, 83 percent of telehealth patients were able to have their issues resolved within just a single visit, when they would otherwise have been directed to alternative sites of care without a telehealth care option.
| Alternative Care Sites | Utilization(100%) | Commercial ($) | Medicare($) |
| Urgent Care | 45.8 | 116 | 98 |
| Emergency Room | 5.6 | 1,595 | 943 |
| Physician Office Visit | 30.9 | 95 | 83 |
| Other Clinics | 5.4 | 57 | 83 |
| Do Nothing | 12.3 | 0 | 0 |
| Average Cost | 100 | 176 | 128 |
Estimated best case costs of care without telehealth option (Source: connectwithcare.org)
By reducing the need for patients to be redirected to high-cost areas such as emergency rooms and urgent care, transportation and referral costs can be reduced, and the number of costly follow-ups can be kept low.
With RPM and an effective telehealth program in place, patients have easier access to physicians and specialists, ensuring they receive the right care, at the right place, at the right time.
How CMS Regulations Are Addressing Telehealth Challenges
One of the main hurdles providers have faced in implementing telehealth care programs has been a lack of Medicare coverage.
However, the shift towards remote patient care has already begun, particularly after the pandemic hit in 2020. Almost overnight, telehealth services became essential rather than “nice to have,” as COVID-19 redefined the healthcare delivery landscape.
To keep up with these shifts, many strides have been made in Centers for Medicare & Medicaid Services (CMS) regulations, including expanded access to services for providers offering telehealth solutions to patients.
In November 2021, CMS approved the 2022 Medicare Physician Fee Schedule Final Rule (MPFS), which introduced information on new Remote Therapeutic Codes (RTM)—a major victory for the home health community as it expands the types of clinicians able to bill for RPM services.
The newly introduced RTM codes serve to fill the gaps of RPM coverage and broaden the use cases for RPM, an expansion that greatly benefits home health agencies, physician groups, and hospital systems with outpatient clinics, many of whom could not bill for these services under current RPM coverage.
Success Stories: Leveraging Telehealth to Improve Outcomes
Many healthcare providers are now embracing the telehealth model and are reaping the benefits for their patients as well as their organizations’ bottom lines.
VHA
As a pioneer in the use of telehealth, Veterans Health Administration (VHA) began introducing telehealth programs in the 1990s. Various telehealth interventions for veterans that provided routine care and targeted care management services were introduced including post-traumatic stress disorder (PTSD), diabetes, and hypertension. These telehealth programs were associated with a 25 percent reduction in the number of bed care days required by patients as well as a 19 percent reduction in hospital admissions for all VHA patients who were utilizing telehealth. VHA estimates average savings of $6,500 for each patient that participated in the 2012 telehealth programs.
CalPERS
A recent study of enrollees in the California Public Employees Retirement System (CalPERS) evaluated the impact on utilization of providing physician consultations via telehealth. The study found that, after a telehealth visit, the patient was less likely to require a follow-up visit in comparison to individuals who received their initial consult for a similar condition in the emergency department (ED) or a physician’s office. Six percent of telehealth visits resulted in a follow-up visit, in contrast to 13 percent of office visits and 20 percent of ED visits.
Johns Hopkins
Telehealth is also being used on patients who are sick enough to be admitted to a hospital but stable enough to be treated at home. Johns Hopkins Medicine in Baltimore pioneered the Hospital at Home program, focusing on elderly patients who refused hospital admissions or were immunocompromised. Results were overall positive with the total cost of at-home care at 32 percent less than traditional hospital care ($5,081 vs. $7,480), the average duration of stay for patients was three times shorter (3.2 days vs. 4.9 days), and the incidence of delirium (among other complications) was significantly lower (9% vs. 24%).
Avera Health
Avera Health and Avera@Home’s pilot telehealth and RPM program targeted high-risk cardiac patients to enhance outpatient care, mitigate patient anxiety, and reduce hospital readmissions and ED visits. Within six months, Avera@Home’s pilot program achieved a 3.6 percent overall 30-day hospital readmission rate and recorded a 95 percent patient satisfaction rate.
Frederick Health
Frederick Health’s Chronic Care Management (CCM) program, a division of Frederick Health Home Care, launched their telehealth program with HRS in 2017 with the goal of reducing readmissions and increasing cost savings to the health system. The provider’s goal was to improve patient outcomes, reduce readmissions, enhance patient-provider communication, and decrease cost of services. With a centralized program structure that prioritized at-risk patients, the provider achieved an 83 percent reduction in 30-day hospital readmissions.
Mercy Health
Mercy Health, based in St. Louis, successfully reduced spending with its Mercy Virtual Care programs that successfully improved patient outcomes. By opening its Virtual Care Center, operated by 300 physicians and staff focused solely on telehealth delivery, the length of inpatient stays and mortality rates declined by 40 percent and the average cost of care decreased as patients required reduced hospital admissions.
Wondering About the Costs of Telemedicine for Your Organization?
Understanding the true cost of telehealth for your organization requires you to consider the implementation fees and how it compares to the long-term savings. To find out more about what this looks like for you, feel free to speak to one of our reimbursement experts.
