Telemedicine ROI- A Critical Measure for a Successful Program

The success of any telemedicine program or application can be measured by many metrics, with patient care generally being front and center, as it should be. Providing the best patient care possible is always the end goal in healthcare, including the care that is delivered virtually. But the reality is that for any program in any industry to be successful, the numbers have to add up.  Calculating the ROI for telehealth / telemedicine applications can be complex, and the numbers will be unique dependent upon factors that are specific to each program.

However, generally speaking, the research overwhelmingly indicates that telehealth / telemedicine applications have a positive financial impact in almost all settings. A meta-analysis that looked at depressive disorders and preventative telemedicine applications found an ROI range between $1.72 and $2.10.[i] A different study that looked at onsite visits versus telemedicine visits to treat upper respiratory infections (URIs) found that the annual cost for onsite visits was $383,702, while 3 months of virtual treatment cost only $9,744.[ii] This is a dramatic drop and could potentially save the health system and patients hundreds of thousands of dollars annually.

“The result of this study, along with many others that outline the financial benefits of telemedicine, is simply too great to ignore.“

The ROI on telemedicine programs when used in long-term care settings or skilled nursing facilities can be even more impressive since these patients are typically readmittances with complex comorbidities. The Bridges to Behavioral Health Project in Virginia sought to determine the ROI of telemedicine programs in multiple skilled nursing / long-term care (LTC) facilities across the state. The result of this massive effort was the conclusion that even when accounting for an initial massive capital expenditure for infrastructure and equipment, the program nearly broke even in its first year due to the huge cost savings. For years 2-6, it created a significant payback/cost savings, that resulted in a positive cash flow that exceeded $1 million during that time period.[iii]

Source: The ROI for Long-Term Care (2018)

The result of this study, along with many others that outline the financial benefits of telemedicine, is simply too great to ignore. Currently, there are 1.4 million people residing in long-term care facilities and this number is expected to increase 80% by 2050.[iv] In addition to the financial benefits of providing telemedicine for skilled nursing / long-term care, keeping patients in their locations has many additional benefits to the patients themselves as well as their families.

As telemedicine becomes an increasingly desirable option for our nation’s healthcare system, which is strained by a lack of resources and specialists, calculating the individual ROI for your skilled nursing / Long Term Care (LTC) facility will become increasingly important. This equation must account for the care delivery model, the payment and billing model, the technology being used and other associated costs.

To learn more about how telemedicine solutions can help skilled nursing and long-term care facilities provide better patient care more affordably, please contact our experts at iDocsWeb.

[i] Lokkerbol, J., Adema, D., Cuijpers, P., Reynolds, C.F., Schulz, R., Weehuizen, R., & Smit, F. (2013). Improving the cost-effectiveness of a healthcare system for depressive disorders by implementing telemedicine: A health economic modeling study.

[ii] Eramo, L.A. (2017, April 20). How to measure ROI of telemedicine: An Oklahoma health system shares some insights. On MedCityNews. Retrieved March 7, 2019 from https://medcitynews.com/2017/04/how-to-measure-roi-of-telemedicine/?rf=1

[iii] Rossiter, L., Austin, W., Gammon, J. (2018, February 1). Telebehavioral health: The ROI for long-term care. On hfma. Retrieved March 7, 2019 from https://www.hfma.org/Content.aspx?id=59161

[iv] Harris-Kojetin, L., Sengupta, M., Park-Lee, E., & Valverde, R. (2013). Long-Term Care Services in the United States: 2013 Overview. National Center for Health Statistics, Vital and Health Statistics.

Written by Rikki Roehrich

Telemedicine expert, Rikki Roehrich, holds over 12 years of experience working with and writing about medical innovations – or the intersection of emerging technology and healthcare. With both a bachelor’s and master’s degree in Communication Studies, her focus and passion has always been with health communication. She currently works as a writer for several innovative companies that operate in the healthcare space, and she researches and covers medical technologies that incorporate technologies such as machine learning, predictive analytics, remote functionality, AI, and the Internet of Things (IoT), amongst others. In addition to this, she also has over 7 years of experience working directly with the Telemedicine program for the University of California, Davis Medical Center. In this role, she assisted with the expansion of the telehealth network within the state of California as well as educational efforts for clinicians who were new to telemedicine. She also served as an instructor at the Telemedicine Education Program during her tenure here.