Financial and contractual issues associated with Telehealth: Unit M5

1. Financial and contractual issues associated with Telehealth: Unit M5

2. 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

3. M5/2

4. 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

5. M5/4

6. Suppliers LOTS x 6 Matrix of pre-qualified organisations & capabilities http://www.buyingsolutions.gov.uk/categories/ICT/telecare/ M5/5

7. M5/6

8. M5/7

9. Current Suppliers / Buying Solutions Framework Air Products Healthcare / Airedale NHS Trust / Ascom(UK) Ltd / Bayer Plc/ BroomwellHealthwatch Ltd / buddiLimited / CarelineUKMonitoring 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 /ForaCare /GE Medical Systems Limited /Grosvenor Telecom /HealthwaysInternational Ltd /Hewlett-Packard Limited /Home Telehealth Limited (Alere) /Honeywell Hommed/Hugh Steeper Limited /IcomProjects /Invicta Telecare Limited /iPLATOHealthcare /iSOFT /JontekLTD /Just Checking Ltd /KPMG /MediaburstLimited /MyAmegoHealthcare Ltd /NHS Direct /Pfizer Ltd /Philips Healthcare/Possum Limited /QuestmarkLtd /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/TallonMonitoring Ltd /TBS GB Telematic & Biomedical Services Ltd / Telecare Services Association / Telecare Technology /Telecare UK Ltd /TelefonicaO2 UK Limited /Telehealth Solutions Ltd / TeleMedCareLtd /TunstallHealthcare (UK) Limited / Tynetec /UnitedHealth UK /Wealden and Eastbourne Lifeline + Simple Telehealth M5/8

10. M5/9

11. M5/10

12. M5/11

13. M5/12

14. 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

15. How could we evaluate results/benefits? M5/14

16. Benefits realisation • Dark green and light green dollars • Service efficiencies • Workforce modelling • Participation/self management • Activity M5/15

17. 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

18. 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 ROI £188,000 in year one M5/18

19. 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

20. 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

21. 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

22. 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

23. 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 in-patient 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