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Financial and contractual issues associated with Telehealth: Unit M5.

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Presentation on theme: "Financial and contractual issues associated with Telehealth: Unit M5."— Presentation transcript:

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 Managing Change Infrastructure and technology Resourcing and procurement Workforce and education Service requirements Benefits realisation and evaluation M5/2


5 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

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10 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

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14 Managing Change Infrastructure and technology Resourcing and procurement Workforce and education Service requirements Benefits realisation and evaluation M5/12

15 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

16 How could we evaluate results/benefits? RCT Matched control study ‘Before and after’ study Case studies Opinion M5/14

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

18 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

19 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 Benefits £300,000 in year one Costs £100,000 capital £12,000 revenue in year one Costs £100,000 capital £12,000 revenue in year one ROI £188,000 in year one ROI £188,000 in year one M5/18

20 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

21 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

22 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

23 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

24 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

25 Additional Resources Scottish Telehealthcare Strategy – A National Telehealth and Telecare Delivery Plan for Scotland to 2015 - Driving Improvement, Integration and Innovation Cabinet Office – Procurement Q/A NHS Barnsley business case NHS Worcester business case

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