This brief is a summary of our findings on the cost effects of remote monitoring for Medicare. It was presented to a director at the Center for Innovation at CMS in April 2016.

1. +
Modeling Telemedicine’s
Impact on Heart Failure
Costs to Medicare
Presented by: Elizabeth Bersin, Luke Hill, Phil
Linder, Blake Roberts, Wallis Romzek, and Boramy
Siek

2. +
Table of Contents
1. Overview
2. The Trajectory of Telemedicine
3. Current Situation for Heart Failure Patients
4. Remote Monitoring
5. Purpose of Analysis
6. Modeling the Cost of Remote Monitoring
7. Findings
8. Limitations
9. Scenarios
10.Recommendations

3. +
Overview
■ What is Telemedicine?
■ How is it used?
■ Types of Telemedicine
■ Telemedicine implications
Source: Mediphan.com

4. +
The Trajectory of Telemedicine
■ First signs of telemedicine
■ Current uses of telemedicine
■ Tracking
■ Specialties
■ Rollouts continue
■ Future possibilities
■ Expanding to include
telehealth
■ More precise monitoring
■ Economies of scale
Source: Apple

5. +
Current Situation for Heart Failure
Patients
■ 820,720 patients admitted for heart failure in 2011
■ Cost of treatment:
■ Average cost to for hospital admission: $11,000
■ Average cost of Heart Stent: $30,000
■ Average cost of Coronary Artery Bypass Graft: $50,000
Source: Pelizzari and Pyenson

6. +
Remote Monitoring of Heart Failure
■ Types of RM:
■ Telephone
■ Electronic
■ Program costs
■ Current usage
■ Studies are mixed on
effectiveness
Source: Leonard Ganz

7. +
Purpose of Analysis
■ How much would it cost
Medicare?
■ Why is this important?
■ Technology
■ Costs
■ Access
■ Quality of life
Source: Charles Settles

8. +
Modeling the Cost of Remote
Monitoring
■ Built a model to estimate
cost of implementation
nationwide
■ The model estimates:
■ Direct cost of monitoring
■ Cost of hospital intervention
■ Cost from increased demand
■ Saving from a remote
monitoring program
■ Total cost to Medicare

9. + How to Use the Model
■The model is comprised of
two sections: parameters
and detailed calculations of
each cost
■Cost parameters include
program costs, average cost
of hospitalizations, various
cost for surgical procedures,
etc.
■Population parameter
includes percentage of
beneficiary with and without
cardiovascular disease,
program adoption rates, etc.

10. +
Direct Cost of Monitoring

11. +
Cost of Hospital Intervention

12. +
Cost of Hospitalization w/o
Intervention

13. +Cost Due to Increased Demand

14. +
Cost Savings from Increasing
Monitoring

15. +
Findings
■ Greatest amount of savings come from getting increasing
access to monitoring
■ Early interventions are drastically cheaper and increasing access to
monitoring can save billions.
■ Over-prescription could eliminate cost savings from early
intervention

16. +
Scenarios to Consider
■ Price change of remote
monitoring
■ Price is likely to decrease
over time, resulting in more
early interventions and
savings.
■ Additional demand will
increase direct cost of
monitoring.
■ Utilization
■ Initially likely to be low, but
will grow with time.
■ Over-prescription
■ Decreased cost may increase
over prescription.
Source: Sherlock Health
Source: Sarah Marie Lammers
Source: Medchrome

17. +
Limitations
■ Data Access
■Parameters can be changed
■ Assumptions
■ Relationships between
variables
■ Economic assumptions
■ Cannot project estimates
■ Repeated admissions
Source: Scott Tyler

18. +
Recommendations
1.Implement remote monitoring programs to encourage at-
risk population to get early screening
1.Expand coverage and access for Remote Monitoring.
a. Has a potential to reduce costs to Medicare for interventions
and current conventional methods
b. Can potentially improve quality of life for beneficiaries.
c. Factors to consider: defensive medicine

19. +ReferencesAmerican Telemedicine Association. "Telemedicine, telehealth, and health information technology: An ATA issue paper." May). Washington, DC: American Telemedicine
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