Page 26 Telehealth and Remote Patient Monitoring RPM for Long Termand Post Acute Care A Primer and Provider Selection Guide 2013

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These services may be covered by grants, or offered 6.8.1 ROI to Patients and/or their Families
as standard of care with the cost absorbed by the
organization and covered from different revenue ROI to patients and/or their families can be calcu-
sources, including charitable contributions. lated as:

ROI Patient or Family = Net Gains Patient or
Family ⁄ Investment Patient or Family
6.8 Return on Investment (ROI) of
Telehealth and RPM For private pay patients and their families, for
example, the financial gains of home telehealth and
Return on investment (ROI) represents the ratio of RPM lie in prolonging independence by avoiding
the net gains relative to the initial investment over deterioration in health that may lead to disability
a certain period of time. Subsequently, ROI can be and avoiding the need to move into assisted living
expressed in the following equation: or skilled nursing facilities, which is significant. The

ROI = Net Gains ⁄ Investment gains may also include savings in co-pays for recur-
ring hospital visits, and of course a higher quality
As discussed above, telehealth and RPM delivers of life, which is difficult to quantify. The patient’s/
various benefits, including potential financial sav- family’s expenses/investment are the monthly out of
ings to different stakeholders, including patients pocket cost of private home telehealth services, and
and/or their families, payers, care providers, etc. any co-pay for the occasional physician office visit,
lab tests, and prescriptions.
However, the financial savings and ROI, depend
on a number of factors including the care delivery 6.8.2 ROI to Payers
model, the payment/reimbursement model, the
technology, and of course costs. The first and most ROI Payer = Net Gains Payer ⁄ Investment Payer
important step in calculating ROI is to consider the
different stakeholders, identify the investors, and For dual Medicare and Medicaid eligible patients
calculate the gains and savings netted/accrued to who are nursing home eligible, for example, the
each investing stakeholder under each particular financial gains of home telehealth and RPM under a
care delivery and payment model. When calculat- Medicaid Waiver program that accrue to Medicaid,
ing ROI, one should only include the gains that which would otherwise be liable for the costs of
accrued to that particular stakeholder minus all nursing home room and board costs, lie in remain-
expenses, relative to that stakeholder’s own invest- ing in their own home with home health, home
ment/cost. Often the reduction of hospital days is care and other supportive services. Medicaid’s
erroneously included in the providers’ ROI, which investment is the monthly rate of home telehealth
is not true under the traditional fee-for-service services and additional supportive services aimed at
reimbursement model and can be misleading; such keeping the individual independent.
a reduction usually accrues to the payer. In this particular example there may be additional
savings, like reductions in hospitalization and
hospital readmission costs that accrue to Medicare,

Telehealth and Remote Patient Monitoring for Long-Term and Post-Acute Care:
A Primer and Provider Selection Guide 2013