Those of us that work in the healthcare industry know that hospitals do not want readmissions. According to Becker’s Hospital Review, the mean cost per readmission for CHF is $13,000 and the average cost for COPD readmissions is $7,100. Splitting the difference for the sake of this blog, let’s assume the average cost for a readmission is $10,500.
The next step to this analysis is to figure out the average percentage of readmissions in U.S. hospitals. I found in a Health Affairs blog, that the average hospital has a readmission rate of 17.8%. Let’s round that down to 15% to be on the conservative side.
For a mid-size hospital, let’s assume they had 10,000 admissions in a year. Now, we have agreed to assume a 15% readmission rate. That would mean that 1,500 patients were readmitted in a year. At a cost of $10,050 per patient, that is a cost to the hospital of $15,075,000! That is a HUGE number.
Using telemedicine to reduce readmissions is smart. More often than not, the objection I hear from hospital executives is that they have not adopted telemedicine for this purpose because they don’t know that their providers can get reimbursed for the visit. Seriously, this is flawed thinking. Let’s further examine why:
We need to make three more assumptions. First, that the typical follow up visit is worth $90 to the provider. Second, that the cost of the telemedicine visit is $10. Third, that there is no reimbursement (even though there are some that would be reimbursed, for this example, we are being conservative and saying none). Great. That makes a total cost per telemedicine visit for discharged patients at $100 per visit.
A cost of $100 per visit for 10,000 discharged patients is a cost of $1,000,000. We know that the cost for readmissions (as shown above) is $15,075,000. Let’s assume that the hospital was able to reduce their readmissions by using telemedicine by half. OK, so half of $15,075,000 is still a cost to the hospital of $7,537,500 plus a cost of $1,000,000 for telemedicine and professional fees for a total readmission cost of $8,537,500.
Without using telemedicine, the cost was $15,075,000. Using telemedicine, the hospital is saving $6,537,500.
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