Assessing the Return on Investment inHealth IT: an exploration of costs and  benefits in relation to the remote   monitori...
Technology-based health interventions arerarely evaluated in terms of costs and benefitsThis paper focuses on:• Remote tel...
The impact of chronic diseases:           COPD and heart failure (CHF)• A heavy burden on patients, families and society, ...
The clinical effectiveness of chronic care          systems using telemonitoringSystematic reviews show:• impact on specif...
Most studies flawed in method and scope (fail tolook at the system the service is part of)• EU Health Unit Directorate, UK...
Range of factors critical to assessment of      economic impact of an intervention• Need to be clear about time frames ove...
Whose objective function is being optimized?• The focus on direct costs partly explained by two  factors:    – availabilit...
The social planner’s perspectiveIn a state funded healthcare system the social planner is   usually the government.• Govt ...
In New Zealand context state funding is         distributed to a variety of providers• Unclear which stake-holding group b...
Other stake-holding groups likely to have objectivefunctions that exclude elements that should be considered              ...
Cost benefit analysis of telemonitoring       systems remain problematic• Systems have real potential but cost/benefit iss...
Lessons learned . . .• The use of technology changes the way care  is delivered;• Positive and negative impacts, e.g. brin...
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Assessing the Return on Investment in Health IT: An Exploration of Costs and Benefits in Relation to the Remote Monitoring of Chronic Diseases

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Rowena Cullen
Victoria University of Wellington
(Friday, 11.00, Telehealth/mHealth)

In the evaluation of many technology-based interventions in the health sector there is a lack of information about the costs and benefits of the application. This is markedly so in the case of telemonitoring of home care patients with chronic diseases such as Chronic Obstructive Pulmonary Disease (COPD) and Heart Failure (HF). This paper provides a brief overview of the effectiveness of such systems as reported in the literature, and identifies a lack of rigorous cost benefit analysis in such reports. The paper investigates some issues related to cost benefit analysis where there are multiple levels of care providers involved in the delivery of care, and suggests that these issues need to be resolved in order to gain a better understanding of the true costs and benefits of telemonitoring chronic care support systems. This would assist the government, as the social planner, to identify the most cost effective solution, as well as the optimal clinical solution, for all stakeholders involved in telemonitoring programmes. It would also help identify the contribution of new telecommunications channels in optimising the returns on telehealth initiatives.

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Assessing the Return on Investment in Health IT: An Exploration of Costs and Benefits in Relation to the Remote Monitoring of Chronic Diseases

  1. 1. Assessing the Return on Investment inHealth IT: an exploration of costs and benefits in relation to the remote monitoring of chronic diseases. Rowena Cullen Bronwyn Howell Greg Martin Victoria University of Wellington
  2. 2. Technology-based health interventions arerarely evaluated in terms of costs and benefitsThis paper focuses on:• Remote telemonitoring of home care patients withChronic Obstructive Pulmonary Disease (COPD) andHeart Failure (HF). –Offers promising alternative for domiciliary care warranting significant investment in systems and infrastructure.• Investigates where true costs and benefits lie, which ofthe stakeholders receives the actual return oninvestment.• Identifies a key role for government, as social planner,to take account of all relevant perspectives.
  3. 3. The impact of chronic diseases: COPD and heart failure (CHF)• A heavy burden on patients, families and society, and excessive use of healthcare resources;• As the population ages, incidence of chronic conditions increasing;• In some healthcare systems, expenditure highly skewed: 5% of patients responsible for 55% of costs;• COPD affects over 200 million people worldwide, WHO predicts third leading cause of death by 2030;• In NZ COPD affects as many as 32% of those aged over 70 years; CHF a leading cause of mortality, morbidity and hospitalisation for over 65s;• Creates significant demand for inpatient beds and services with substantial associated costs.
  4. 4. The clinical effectiveness of chronic care systems using telemonitoringSystematic reviews show:• impact on specific outcomes (hospital visits, admission, length of stay) consistently observed;• data transferred by telemonitoring as reliable as those collected through face-to-face patient examination;• reduction in rates of hospital admission 20-21%• reduction in all-cause mortality by 20-34%, and CHF- related hospitalisations by about 20%;• improved quality of life and reduced costs demonstrable outcomes in several studies.
  5. 5. Most studies flawed in method and scope (fail tolook at the system the service is part of)• EU Health Unit Directorate, UK’s NICE claim studies inadequately randomised and do not address costs/benefits;• Wide variety of metrics used to assess costs/benefits show savings ranging from 1.6% to 68.3%;• Direct cost savings (e.g. hospitalization avoided, reduced outpatient or physician/nurse visits) favoured over indirect cost savings (e.g. nurse/technician travel time, patient travel costs, laboratory or pharmaceutical costs, etc.)
  6. 6. Range of factors critical to assessment of economic impact of an intervention• Need to be clear about time frames over which the relative costs and benefits of both telemedicine and usual care interventions are expended and accrued.• Need to look across the entire system to identify changes in workflow, hidden costs such as training, tasks not done, flow-on effects on other parts of the operation.• Can’t just analyse the costs of the technology, must take these complementary costs into account also.• Need to identify the objective function, the core function that is to be optimized
  7. 7. Whose objective function is being optimized?• The focus on direct costs partly explained by two factors: – availability of data collected by health care providers – interests of funding stakeholders (insurance companies, government agencies) in reducing their own direct costs.• A project designed to optimize returns for a funder of services will require analysis only of factors which fall within that funder’s budget area.• Costs and benefits accruing to the patient (e.g. travel costs) are ignored.• Care deliverers will optimize only on factors affecting their own operations, ignoring factors beyond their budgetary responsibility (e.g. pharmaceuticals, laboratory tests).
  8. 8. The social planner’s perspectiveIn a state funded healthcare system the social planner is usually the government.• Govt must attempt to achieve the best result for all parties involved.• The objective function for the social planner should assess the total costs and benefits accruing across the system, regardless of where they fall.• Where services are partly delivered by commercial enterprises subcontracted to government organisations, the social planner is not always in a position to optimize the return on investment.
  9. 9. In New Zealand context state funding is distributed to a variety of providers• Unclear which stake-holding group best internalizes the social planner’s objective function.• Ministry of Health has a statutory obligation to take social planner’s view, but is also the ultimate budget- holder for the government share of sector funding.• Not obligated to take into account additional resources expended by other parties (e.g. patients, or voluntary sector).• Ministry’s objective function will most closely resemble the social planner’s perspective – it crosses multiple boundaries (care delivery, pharmaceuticals, etc.). – it has stronger incentives to optimize across longer time periods.
  10. 10. Other stake-holding groups likely to have objectivefunctions that exclude elements that should be considered in a comprehensive analysis• DHBs – population-based funding, includes pharmaceutical and lab costs, and domiciliary care, but funded on annual basis – leaves them less able to address timing of cost and benefit accrual - prefer short term cost savings• PHOs – Funded on capitation model through DHB budget – DHBs face no penalty in shifting costs to PHO – domiciliary telemonitoring of patients, which reduces hospital stays shifts the costs of treatment from a hospital physician onto a GP and nurses – Increases PHO staff workload with little compensation – Some costs shift to patient – Further, low income patients prefer hospitalisation, avoiding GP fees
  11. 11. Cost benefit analysis of telemonitoring systems remain problematic• Systems have real potential but cost/benefit issues hold back widespread adoption.• A comprehensive analysis should seek to optimize economic outcomes over a wide range of economic variables and over an extended time period.• Ministry of Health-centric or DHB-centric objective function is more likely to be a good proxy for the social planner objective than a PHO-centric or Home care deliverer-centric objective.
  12. 12. Lessons learned . . .• The use of technology changes the way care is delivered;• Positive and negative impacts, e.g. brings new demands, changes work and information flows, involves losses as well as gains;• The ability of the MoH to take social planner perspective across the entire sector more likely to identify costs transferred from one stakeholder to another;• Responsibility of government to drive research in this area.

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