A Follow-up to Realizing Value with Telehealth in Chronic Condition Management Programs

In our last post on the topic of Chronic Condition Management (CCM), we explained why chronic conditions would continue to be a focus of cost and utilization issues in our nation’s health care system. We also introduced telehealth as an effective tool to supplement existing CCM efforts for increased value creation.

In this follow-up post, we ask Monica Leslie, MHA, Senior Consultant, and Rehan Virani, PMP, Consulting Manager, to expand on how SCP is helping organizations think differently about their investment in CCM technology and how the value on investment (VOI) it creates dwarfs the idea of return on investment (ROI).

If you don’t quite know what that means, we explain in this Q&A.

SCP: Why do you think Value on Investment (VOI) is the new Return on Investment (ROI)?

M/R: We’re extremely passionate about recasting how opportunities to utilize telehealth are analyzed from a business case perspective, creating a shift from thinking only about Return on Investment (ROI) to focus on Value on Investment (VOI).

Organizations we’ve worked with have been so focused on the ROI (i.e., fee for service revenue), that they’re missing the big VOI picture.

SCP: How do you explain the bigger VOI picture to your clients?

M/R: In setting down the path of proving VOI is the new ROI in the world of telehealth plus chronic care, we were determined to create a tool to better illustrate this idea — the Chronic Condition Management Benefits Estimation Tool.

We reviewed more than 30 studies on Chronic Condition Management programs with telehealth to select appropriate studies as a basis for our support. We evaluated studies based on the following criteria:

  • CCM program type;
  • Organization type;
  • Size of the organization;
  • Technology utilized.

SCP: Where did you find the data for your study?

M/R: The studies we selected for support came from organizations of all shapes, sizes, and types, and included Geisinger Health Plan, Lee Memorial Health System, Carolinas Healthcare System, Alterna-Care, University of Rochester, Northern Arizona Health, and Vidant Health, just to name a few.
We introduced items that generate VOI into our tool, determined the impact of telehealth on those items, and translated them into financial value. Criteria that consistently translated into value and success for the organizations studied included costs associated with the reduction in:

  • Avoidable readmissions;
  • Avoidable index admissions;
  • Avoidable ED visits;
  • Ambulance service utilization; 
  • CCM resource utilization. 

In addition to research and analysis, we conducted interviews with leading CCM programs to validate and identify opportunities and impact of telehealth. From those interviews, we evaluated all revenue, cost avoidance, and savings opportunities, and then validated those that provided clear evidence of benefit.

SCP: How about revenue (ex. FFS reimbursement, copays, etc.)? Did that factor into your research?

M/R: We didn’t forget about direct reimbursement (also considered ROI). We identified revenue generating items, such as the Medicare Chronic Care Management program reimbursing between $42-$43 PMPM, as well as the co-pay from participating Medicare members of $8 PMPM.

What about reimbursement from other payers? Although not explicitly included in our tool, the landscape for reimbursement for telehealth technology supporting CCM continues to become more favorable. There are many commercial and Medicaid programs that do provide reimbursement, and we can easily add those to the tool on a case-by-case basis.

SCP: What is the result of your studies? How did the results of these studies influence the tool?

M/R: Using the results from these studies, as well as industry resources such as the Centers for Medicare and Medicaid, the Centers for Disease Control, and Becker’s, we determined the potential impact telehealth can have on readmissions (reduction by 30 percent), index admissions (reduction by 66 percent), emergency visits (reduction by 30 percent), use of transport (reduction by 11 percent), and required CCM resources (reduction by 53 percent).

SCP: What would you say is the Value on Investment for an organization that implements telehealth as part of their CCM program?

M/R: Using our tool, we estimate that a program with a target population of approximately 1,500 members will generate an additional financial value of >$4M over three years for an organization implementing telehealth as part of their CCM program. This is a >50 percent additional value realization over Chronic Condition Management programs without telehealth.

SCP: Are there other areas of opportunity not represented in the analysis that you think can create additional value for CCM programs with telehealth?

M/R: Yes, we believe the following areas of opportunity will create value:

  • Incremental revenue generated by enhanced patient satisfaction;
  • Increased care plan adherence, disease knowledge, and the ability to self-manage;
  • Significantly improved patient quality of life;
  • Reduced acuity level of patients leading to care utilization in lower cost settings and fewer acute episodes;
  • Shorter length of stays due to reduced acuity levels;
  • Reduced patient transportation costs.

SCP: Can telehealth alone result in a successful CCM program?

M/R: Although the results demonstrate that telehealth can generate a significant VOI for CCM programs, we believe that its use alone will not result in a successful program. The program’s design is still critical.

Ensuring the program population is engaged and empowered is vital to patient participation and use of the telehealth technology. Risk stratification will identify the high-risk patients that will utilize telehealth technologies to monitor and manage their care.

Telehealth is, therefore, a means to enhance a CCM program and drive additional value realization, not an end in itself.

For more information about the Chronic Condition Management Benefits Estimation Tool, email Monica or Rehan.