The cost savings of telemedicine

telemedicineAs part of their plans for the next five years, the British government announced its intention to make the National Health Service more accessible 7 days a week.  The move was prompted by the continuing situation of poorer service quality being delivered on weekends than during peak hours.

Suffice to say, opponents to the scheme expect it to be a hugely expensive expansion that the service can simply not afford.  A recent study from academics at UC Davis suggests that a bit of creativity may be the answer.

Telemedicine is something that I’ve touched on a number of times, whether it’s the Babylon service, Molly the virtual nurse, Vida the health coach, or even some of the smart home innovations hitting the market.  The range of innovations is tremendous to see.

Often when these innovations are discussed it is done so in the sense of highlighting the improvements in care and service levels that such technologies can bring, but the UC Davis paper highlights the cost savings that are also possible with telemedicine.

The cost/benefit analysis of telemedicine

The paper reveals that such savings are particularly pronounced in rural areas that use telemedicine to connect up emergency departments with doctors at much larger hospitals.  It suggests that even once the costs of installation and maintenance are considered, the savings work out at around $4,662 per use on average.

“Our previous work showed that telemedicine was good for kids, families, and providers, but we didn’t really address the cost issue,” the authors say. “Now we know, not only does it improve quality, safety, and satisfaction, but it also saves money.”

The researchers worked alongside health economists to try and fully understand the cost implications of telemedicine usage, to then determine whether it is cost effective or not.

The study revealed costs including investment in equipment, software and IT support, whilst the larger hospital will often require subspecialists to support their rural colleagues.  The study found that these costs would typically average $3,641 for each consultation given.

Where savings come from

Interestingly however, the value from delivering these consultations remotely were much higher, and indeed delivered greater savings than similar consultations delivered via telephone.

For instance, most consultations saw transfers between hospitals reduced, with a particular reduction in expensive air ambulance transfers.  Taken together, the costs of such transfers were reduced by 31 percent.

The savings accrued across just five conditions: dehydration, asthma, bronchiolitis, fever and pneumonia.  The authors focused on these five conditions because they are all conditions that can be treated at rural hospitals, provided the right guidance is provided.

The authors concluded that telemedicine can play a much larger role in healthcare.

“In California, physicians get paid for telemedicine consultations, but in many states they don’t. Given its ability to reduce medication errors and increase patient, family and physician satisfaction, as well as lowering costs, I think it makes sense to actually pay physicians a little more for this service to incentivize the model,” they say.

There have already been tests done within the NHS with telemedicine, with positive results.  Maybe with their test bed program under way, it’s time to start ramping this up to another level.


4 thoughts on “The cost savings of telemedicine

  1. Hopefully these kind of findings will prompt the NHS to roll this out further, especially as they need to make big savings.

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