Wednesday, November 5, 2008

Cutting Costs by $197 Billion

Remote monitoring alone could reduce healthcare expenditures by a net of $197 billion over the next 25 years by using remote monitoring to track the vital signs of patients. This will only occur if policies are adopted to reduce barriers and if the use of remote monitoring technologies is accelerated, according Robert Litan, PhD, Study Author, Vice President, Research & Policy, Kauffman Foundation and a Senior Fellow in the Economic and Global Economics Programs at the Brookings Institution. At the same time broadband-based applications can improve care for chronic disease.

Litan spoke at a briefing sponsored by Better Health Care Together held at the National Press Club in Washington D.C. where his study “Vital Signs Via Broadband: How Technology Can Cut Health Care Costs and Improve Patient Care” was released on October 24, 2008.

He pointed out “remote monitoring can spot health problems sooner, reduce hospitalizations, improve life quality, and save money.” The Litan study looked at estimated baseline savings tied to four specific conditions such as congestive heart failure, diabetes, chronic obstruction pulmonary disease, and chronic skin ulcers and wounds.

Litan warned that adoption of remote monitoring and other telemedicine opportunities will be slowed and benefits reduced unless the U.S. does a better job of reimbursing healthcare organizations for remote care. The country also needs to encourage continued investment in broadband infrastructure tailored to meet the privacy, security, and reliability requirements for telemedicine applications. Litan estimates that the failure to make the right policy adjustments will cut estimated healthcare savings by almost $44 billion over the 25 year period.

He continued to say that while broader broadband penetration is desirable, the right kind of broadband is just as important. Effective remote monitoring requires “smart networks” that will ensure that the patient’s critical data and the communication of that data is not disrupted or interrupted.

Jody Hoffman, Executive Director , Better Health Care Together, a partnership of leaders from business, labor, and public policy organizations said “Litan’s study illustrates how new directions in health care can enable the U.S. to deliver quality care at lower costs. Our first priority is to make sure every American has quality, and affordable health coverage. In order to do this, we need to develop and use information technologies in a big way.”

Neal Neuberger, Executive Director, Institute for e-Health Policy and President of Health Tech Strategies, LLC said “remote healthcare monitoring sits at the intersection of traditional telemedicine and new healthcare information technologies.”

Neuberger noted that we must acknowledge the nature of our complex and rapidly evolving healthcare delivery system given the diversity and pace of proposed reform efforts. There are several issues to deal with involving reimbursement, changes in telecommunications law, workforce shortages, and licensing. He continued to say we need to do remote monitoring, develop the medical home to meet the needs, build out networks so they will affordably reach into homes, and set up rural and remote clinics and health centers.

He continued to say that from the provider’s perspective, the integrity and reliability of data is critically important since clinicians will not accept questionable data because it poses quality and liability concerns. Patients on the other hand are concerned about their access to healthcare, concerned about the cost and quality of healthcare, expectations for privacy and security, but most importantly, patients today want to be involved in the decision making process.

The Litan study is available at