Is Telemedicine Effective?
Apparently not for Medicaid. The Colorado Department of Health Care Policy and Financing tried telemedicine in a pilot program from August 2007 to July 2008. The vendor running the program reported health care savings of $104,000 during that period.
The problem? The gizmos cost $448,000 to set up, monitor, and run.
No surprise.
It will take numerous pilot projects and experiments to discover which patients, suffering from which conditions will benefit the most of telemedicine and remote monitoring. There is no reason to assume all patients (suffering from all conditions) will benefit uniformly. That said, I believe telemedicine holds great promise since it makes it easier to interact with health care providers. I especially think health professionals working from low-cost countries (where professional fees are lower) can assist patients and their physicians with chronic disease management.
All the electronic gizmos tend to be not cost effective unless chosen by doctors to help them solve problems. Imposed from on high, these systems add to costs and often don’t even work.
The implementation costs with a system like this probably account for a substantial portion of the $448,000. Network infrastructure, servers, equipment, software licenses etc. add up pretty quickly. What are the operating costs and the marginal cost/revenue of adding an additional patient as the program grows. A one year pay back period is ridiculous and very few if any projects would ever be financially successful if this metric was widely used.
Colorado contracted with a private company for the telemedicine project. Presumably the company was charging what it considered a reasonable fee. From the perspective of the state, it cut a $448,000 check for telemedicine management but saw its costs fall by only $104,000.
But as the next post makes plan, government may not be the best place to try new things out.
Linda, I get the idea what this company considered a “reasonable fee” for the state of Colorado was probably much higher than what the vendor would have charged Aetna, Wellpoint or just about any other private entity. I have a relative that once told me he always submitted bid that were several times more costly for state jobs than he did for private companies or individuals because of the increased “hassle factor” for working with the state.
Devon, I have no idea how the negotiations went. The company could also have lowballed the price in hopes of a larger contract later.