Telemonitoring Saves Money When Combined With Traditional Care

Despite the significant benefits reported in this Health Affairs study, the Centers for Medicare and Medicaid Services questions whether the benefits are real.

Ken Terry, Contributor

September 12, 2011

4 Min Read

Slideshow: Wireless Telehealth Brings Medical Help To Those In Need

Slideshow: Wireless Telehealth Brings Medical Help To Those In Need

Slideshow: Wireless Telehealth Brings Medical Help To Those In Need (click for larger image and for full slideshow)

Combining telehealth and care management tools significantly reduces the costs of treating Medicare patients with chronic diseases, even after factoring in program costs, according to a new study published in Health Affairs. While the study focused on the use of the Health Buddy, a decade-old technology that must be used at home, it has implications for the use of the newer mobile applications for telemonitoring. Equally important, it signals the lag between studies of telehealth and its application in the field, according to a noted expert.

The researchers, who included Laurence C. Baker of Stanford University, analyzed data collected in the course of the Centers for Medicare and Medicaid Services' (CMS) Care Management for High-Cost Beneficiaries Demonstration. The Health Buddy program was one of six interventions that this demonstration investigated, focusing on patients with diabetes, chronic obstructive pulmonary disease, or congestive heart failure.

The Health Buddy is a handheld device with four buttons and a large color screen. Patients use the device at home, where it is linked by telephone to care managers. Each day, the patients are asked diagnosis-specific questions about their symptoms, vital signs, self-management knowledge, and health behavior. Their responses on the Health Buddy are uploaded to a Web-based computer application that risk-stratifies their responses for a care manager's review. The care managers contact patients whose condition appears to be deteriorating or who aren't receiving appropriate services.

The researchers examined the healthcare costs of 1,767 Medicare patients who used the Health Buddy and an equal number of matched control patients who didn't. They analyzed the costs of the intervention group before and after they entered the program, using Medicare claims data, and compared those to the costs of the control group in the same time periods to weed out other factors that might have influenced Medicare spending.

The investigators estimated that quarterly mean spending in the study group dropped significantly, between $312 and $542 per person or between 7.7% and 13.3% over two years, compared with that of the control group.

The spending reduction for patients with heart failure was nearly twice as high as the decreased cost for patients with diabetes or COPD in the first study year, but the savings for patients with COPD approached those of heart failure in the second year.

The researchers noted that the program cost CMS $120 a month in the first year, rising to $128 a month in the third year for patients who were actively using the Health Buddy. After factoring in that cost, they estimated a net savings of between 4.3% and 9.8%.

Commenting on the study, David Nash, MD, dean of the School of Population Health Management at Thomas Jefferson University in Philadelphia, said, "This is a wonderful piece that is confirmatory of what many people in the field have known for a decade. It is an excellent review of some of the evidence supporting the role of telemedicine in chronic care management. It's particularly germane under health reform as the industry searches for more efficient ways to manage chronic illness. It also points to the fact that individual patients [with chronic diseases] seeing individual primary care doctors is a model we must do away with, and that we must find different modalities, given the primary care shortage."

The official government report on the Medicare care management pilot using the Health Buddy found that costs rose 8% more slowly for the intervention group than for the control group, "but savings needed to exceed 12.1 percent to be considered statistically significant." This echoed a 2004 Congressional Budget Office report that found that the published literature did not show that disease management programs save more than they cost.

From Nash's point of view, however, 10 years of practical experience have proved that integrating telehealth with chronic care management can, in fact, produce significant savings. And he believes that CMS wasted a lot of time trying to show that care management alone saved money when "integrated telehealth" has long been known to be effective--as the Health Affairs study shows.

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About the Author(s)

Ken Terry


Ken Terry is a freelance healthcare writer, specializing in health IT. A former technology editor of Medical Economics Magazine, he is also the author of the book Rx For Healthcare Reform.

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