Telemedicine Saves Money for Rural ERs

University of California, Davis rightOriginal Study

Posted by on May 29, 2015

You are free to share this article under the Attribution 4.0 International license.

Rural emergency departments that use telemedicine to consult with pediatricians at larger hospitals save money in the long run. Even though the systems are expensive to install and maintain, they more than pay their way, saving an average of $4,662 per use.

“Our previous work showed that telemedicine was good for kids, families, and providers, but we didn’t really address the cost issue,” says James Marcin, interim head of pediatric critical care medicine at University of California, Davis. “Now we know, not only does it improve quality, safety, and satisfaction, but it also saves money.”

For a new study in the journal Medical Decision Making, public health researchers worked closely with health economists to determine the actual costs of a telemedicine consult, as well as the potential savings.

On one side of the ledger, hospitals must invest in equipment, software, and IT support. In addition, urban hospitals must pay to have subspecialists on call to assist their rural colleagues. These and other costs averaged out to $3,641 per consultation.

Fewer transfers

However, the value of these consultations far exceeds these expenses. Compared to telephone, telemedicine consults produced extensive savings. In many cases, savings accrued from reduced transfers between hospitals. In particular, moving patients by air ambulance can dramatically increase the cost of care. Telemedicine consults reduced the number of patients being transferred by 31 percent.

Researchers reviewed the Pediatric Critical Care Telemedicine Program at UC Davis, tracking its interactions with eight rural emergency departments between 2003 and 2009. They collected detailed information on the costs of implementing and maintaining the telemedicine program and weighed those against the transfer logs at the eight hospitals, as well as the costs of ED visits.

The team focused on five conditions: asthma, bronchiolitis, dehydration, fever, and pneumonia. These diagnoses stand out because, with appropriate guidance, they can be treated at the rural hospitals.

Telemedicine should play a larger role in health care, Marcin says.

“In California, physicians get paid for telemedicine consultations, but in many states they don’t. Given its ability to reduce medication errors and increase patient, family and physician satisfaction, as well as lowering costs, I think it makes sense to actually pay physicians a little more for this service to incentivize the model.”

The Agency for Healthcare Research and Quality, Emergency Medical Services for Children, Office for the Advancement of Telehealth,  the California Healthcare Foundation, and the William Randolph Hearst Foundations funded the work.

Submit a Comment