Financial and contractual issues
associated with Telehealth: Unit M5
Learning outcomes
• By the end of this section, you will be able to;
– Describe the procurement and contracting options
available for telehealth services
– Identify the key benefits delivered by a telehealth
deployment
– Understand methods of evaluating return on
investment from telehealth services
M5/1
Benefits
realisation
and
evaluation
Service
requirements
Workforce
and
education
Managing
Change
Infrastructure
and
technology
Resourcing
and
procurement
M5/2
Buying Solutions/UK Government
Procurement Framework
Assistive Technologies (RM784) extended until August 2013 (6 lots)
• Lot1 – Telecare Products
• Lot2 – Telecare Services
• Lot3 – Telehealth Products
• Lot4 – Telehealth Services
• Lot5 – Telecoaching Products and Services
• Lot6 – Managed Services
M5/3
M5/4
http://www.buyingsolutions.gov.uk/categories/ICT/telecare/
M5/5
M5/6
M5/7
Current Suppliers / Buying Solutions Framework
Air Products Healthcare / Airedale NHS Trust / Ascom (UK) Ltd / Bayer
Plc / Broomwell Healthwatch Ltd / buddi Limited / CarelineUK Monitoring Ltd
/ Cheshire Peaks & Plains Housing Trust /Chester & District Housing Trust /
Chubb Community Care / Cirrus Communication Systems Limited /
Cross Keyes Homes /Docobo Ltd /Fold Housing Association /Fora Care
/GE Medical Systems Limited /Grosvenor Telecom /Healthways International
Ltd /Hewlett-Packard Limited /Home Telehealth Limited (Alere) /Honeywell
Hommed /Hugh Steeper Limited /Icom Projects /Invicta Telecare Limited
/iPLATO Healthcare /iSOFT /Jontek LTD /Just Checking Ltd /KPMG
/Mediaburst Limited /MyAmego Healthcare Ltd /NHS Direct /Pfizer Ltd
/Philips Healthcare /Possum Limited /Questmark Ltd /Red Alert Telecare
RedAssure, part of Worthing Homes Ltd /Robert Bosch Ltd / S.E.A Limited /
S3 Group / Safe Patient Systems Ltd / SO Consultancy Ltd /Supra UK Ltd /
System C Healthcare Plc /Tallon Monitoring Ltd /TBS GB Telematic &
Biomedical Services Ltd / Telecare Services Association / Telecare Technology
/Telecare UK Ltd /Telefonica O2 UK Limited /Telehealth Solutions Ltd /
TeleMedCare Ltd /Tunstall Healthcare (UK) Limited / Tynetec
/UnitedHealth UK /Wealden and Eastbourne Lifeline
+ Simple Telehealth
M5/8
M5/9
M5/10
M5/11
Benefits
realisation
and
evaluation
Service
requirements
Workforce
and
education
Managing
Change
Infrastructure
and
technology
Resourcing
and
procurement
M5/12
Anticipated benefits
•
•
•
•
What are your anticipated benefits?
How have you gone about identifying them?
With whom?
How will you manage your activities to have the best
chance of realising those benefits?
• With whom will you work (directly) to give you the best
chance of realising those benefits?
• With whom will you work (indirectly) to give you the
best chance of realising those benefits?
• How will you know when these benefits have been
achieved?
M5/13
How could we evaluate results/benefits?
RCT
Matched
control study
‘Before and after’
study
Case studies
Opinion
M5/14
Benefits realisation
• Dark green and light green dollars
•
•
•
•
Service efficiencies
Workforce modelling
Participation/self management
Activity
M5/15
The basics....
• Telehealth and telecare services cost money to
implement and run.
• The costs will include;
– One-off (capital) costs: e.g. purchasing equipment or
building a call centre
– Ongoing (revenue) costs: e.g. leasing equipment,
staffing, maintenance costs (for equipment and/or
buildings), software licences
• Given the costs involved, investment in these
services will only be approved if there are clinical,
societal, quality or financial benefits to be gained
M5/17
Return on Investment (ROI)
• One measure of whether or not investing in a
telehealth or telecare service is worthwhile is to
calculate the ROI
• In its simplest sense, this can be calculated by
simply subtracting the costs from gross benefits.
An example is below;
Benefits
£300,000 in year one
Costs
£100,000 capital
£12,000 revenue in
year one
M5/18
ROI
£188,000 in year one
Financial returns in telecare
• Telecare can deliver some direct cost benefits,
including;
– Increasing users’ ability to live independently in their
own home, thereby;
• Reducing the need for (and cost of) residential care
• Reducing ‘hands-on’ domiciliary care – e.g. Replacing
overnight carers with alarm and alert systems
– Reducing the need for ‘crisis’ interventions (e.g. Door
sensors and GPS tracking to prevent wandering)
– Reducing the number (and costs) of falls
M5/19
Telecare savings case study
• Let’s imagine a service designed to support older people to live at home
independently...
• Each system costs £500 to buy, and then £50 per month to cover call centre
staff, maintenance, etc. The total cost of the service for year 1 is therefore
£1100
• The assumed costs for 30hrs local authority-organised home care per week
is £542
• So – the cost of caring for someone in their own home, with telecare in situ
and 30hrs of home care is £29284/year (£2440/month)
• The alternative – admission to Local Authority residential care – costs
approximately £935 per week . This equates to £48620/year or
£4052/month
• Put bluntly, if installation of telecare prevents admission to residential care
(for a fully-LA funded user), the ROI in this case would be £19336 in the first
year per user
• If telecare delays admission to LA-funded residential care for just 3 weeks,
then the deployment will – in this example – become cost-neutral
M5/20
Social return on investment (SROI)
• SROI involves putting financial values on the social benefits of
an intervention
• Let’s take a simple example: you put telecare equipment (such
as environmental alarms and emergency pendants) into
homes of people who are struggling to remain independent
• Your ‘standard’ calculation of ROI might include the reduction
in residential home admissions or domiciliary care packages,
as discussed in the previous slides
• However, the SROI may also factor in that relatives (or other
informal carers) of the users can go back into full-time work
because their caring responsibilities can be reduced
• The calculation of SROI could therefore include things such as
reduced carers’ allowance or increased income tax yield
M5/21
Quantifying cost benefits in healthcare
• There are two broad methods by which
telehealth services can bring cost benefits;
– Healthcare utilisation benefits, including;
•
•
•
•
Reduced need for nursing home care
Reduced hospital admissions
Reduced GP appointments
Reduced A&E attendances
– Workload optimisation benefits, including;
• Less need for face-to-face consultation
• Reduced travelling time and cost
• Greater ability to prioritise workload
M5/22
Telemonitoring savings case study
• In this case, let’s imagine someone with COPD who has – on
average – 2 A&E attendances (£87 each), 2 in-patient episodes
(£2168 each) and 6 outpatient appointments (£104 each)
each year because of worsening symptoms – total annual cost
£5134
• Assume that the installation of a telemonitoring service costs
£1500 as a one-off and then £50 per month thereafter – total
annual cost £2100
• If the telemonitoring system prevents 1 A&E attendance, 1 inpatient episode and 2 OPA, it will provide gross savings of
£2463
• The ROI for this patient alone is therefore £363 in year 1 (and
will be more in subsequent years when the capital cost of
£1500 is not required)
M5/23