Cost analysis of a remote patient monitoring programme for post-discharge patients with type 2 diabetes

Abstract

Introduction

Assessing costs of an evidence-based health promotion programme is crucial to understand the economic feasibility of adopting or sustaining the programme. This study conducted a cost analysis of a remote patient monitoring (RPM) programme to enhance the post-discharge management of type 2 diabetes.

Methods

Using retrospective data collected during RPM implementation from September 2014 to February 2018, we estimated the costs of implementing an RPM in the primary care setting. Measures included total and average annual costs, costs per participant who was enrolled or completed the programme, and costs per person-day. We further conducted sensitivity and scenario analyses to examine variations in estimated programme costs associated with varying programme efficiencies and alternative personnel compositions of the RPM team.

Results

The total RPM implementation costs were estimated at US$4,374,544 with an average annual programme costs of US$1,249,870, which translated to US$3207 per participant (n = 1364) completing the three-month programme. The per person-day cost was averaged at US$24 (182,932 person-days). Sensitivity and scenario analyses results indicate that the sustainment costs were approximately US$1.6 million annually and the per-person-day costs were between US$21 and US$29 with each nurse coach on average serving a panel of 62–93 patients.

Conclusion

The implementation and sustainment costs of an RPM programme, estimated under various assumptions of programme efficiency and care team compositions, as exemplified in this study, will help healthcare organizations make informed decisions in budgeting for and sustaining telehealth programmes to enhance diabetes management.

Keywords

Implementation quality improvement reimbursement rate sustainment telehealth,remote patient monitoring,diabetes

Introduction

It is projected that the number of individuals with diagnosed diabetes in the USA would increase from 22.3 million in 2014 to 39.7 million by 2030,¹ posing a major challenge to society, patients and families. The main goal of diabetes management is to control the glycaemic level of haemoglobin A1c (HbA1c) below 7% for adults (not including pregnant women) to improve the symptoms and reduce the risk of long-term complications.² Achieving this glycaemic goal requires close monitoring of vital signs (e.g. blood glucose and blood pressure) and effective working relationship between patients and their healthcare providers for ongoing support.³ Most individuals with diabetes report challenges in receiving diabetes self-management education or social support.⁴ Increasingly, healthcare providers and patients have resorted to telehealth to enhance diabetes management.⁵,⁶

Telehealth (or telemedicine), including remote patient monitoring (RPM), are generally described as ‘the use of information and communication technologies to deliver health services outside the traditional healthcare facilities and transmit health information over long and short distances’.⁷,⁸ Previous studies suggest that telehealth can improve glycaemic outcomes,⁹,¹⁰ reduce healthcare utilization,¹¹ increase patient engagement and satisfaction¹²,¹³ and may be cost effective.¹⁴,¹⁵ There is evidence that the efficacy of telehealth programmes in glycaemic control might be related to the feature, function and services of the programme. For example, our recent systematic review examining 17 studies suggested that telemonitoring with automatic mobile transmission or with real-time feedback modality led to a greater improvement in HbA1c outcomes when compared with telemonitoring without these features.¹⁰ Telehealth programmes, through features such as real-time monitoring, message reminders, automated or in-person consultation, and self-management education and coaching, have a great potential to address the current evidence-based guidelines for the management of type 2 diabetes (T2D) including blood glucose monitoring, medication adherence and lifestyle modifications.¹⁶

Despite the potential and promise of telehealth, little is known about the costs associated with implementation of such disease management strategies. Most published studies on telehealth interventions do not report cost information. It was estimated that only 20% of all published telemedicine studies contain quantitative cost data or make reference to the costs of telemedicine, regardless of setting.¹⁷ Even when studies report cost data, it was usually a rough estimate of total costs without a break-down by cost category.^18–20

Reliable estimates of implementation costs and cost-effectiveness associated with various telehealth programmes are necessary for healthcare systems and providers to make informed decisions about adopting and sustaining telehealth programmes and for health policymakers to determine reasonable reimbursement rates for these programmes. There is an urgent need to address this gap before telehealth programmes can be more widely adopted and reimbursed.¹⁸ The primary objective of the study is to assess the cost of implementing an RPM programme to facilitate disease management among post-discharge patients with T2D. We further estimated the potential costs of sustaining the programme under different assumptions of programme efficiency and discussed the implications of our findings to determine reimbursement rates for sophisticated RPM programmes.

Methods

Study design

We conducted a cost analysis following the Methods for the Economic Evaluation of Health Care Programmes.²³ The time horizon was three and half years (fiscal year 2014–2015, 2015–2016, 2016–2017 and 2017–February 2018). Because the implementation costs incurred over a three and a half year timeframe, the cost outcomes were discounted 3% annually²⁴ with a half-cycle correction assuming the costs incurred evenly over a fiscal year.²⁵ All discounted cost estimates in 2015 US dollars were then adjusted for inflation to reflect figures in September 2020 US dollars using the Consumer Price Index²⁶ for the study period of three and a half years.

Setting

Patients with T2D and aged 19 and older were recruited to the RPM programme no later than one month after hospital discharge from Nebraska Medicine healthcare system (Omaha, Nebraska, USA) for disease management. Other inclusion criteria include ability to speak and read English, use a glucometer, self-administer insulin and/or other prescribed medications, express a basic understanding of and successfully use RPM equipment, and have a discharge plan to home. Exclusion criteria included current pregnancy and a history of addiction. The implementation of RPM programme ran from September 2014 through to February 2018. In total, 1943 patients with T2D enrolled, out of which 1364 participants completed the programme.

RPM programme

The RPM programme and outcomes are presented in detail elsewhere.¹³,^27–30 In short, the three-month RPM programme was offered to post-discharge patients with T2D to prevent avoidable readmissions and emergency room visits. It entailed daily remote monitoring of biometric data (blood pressure, weight and glucose), and weekly phone call or instant calls from nurse coaches (registered nurse and nurse lead) if an alert was issued in the monitoring system (e.g. biometric results were outside the standard range). Throughout the course of the intervention, during weekly phone calls, nurse coaches provided individualized education services based on patients’ experiences and reported challenges which included diet, exercise, medication adherence, coping and problem solving, following the American Diabetes Association (ADA) workbook for self-care.³¹ Participants were expected to take the biometric measurement on a daily basis for 90 days and had access to their nurse coaches as needed. The data was automatically uploaded to the monitoring portal via the remote monitoring device and shared with participants’ primary care providers using electronic health records. In addition to the RPM unit, participants were provided with glucose strips, lancets and a lancing device to facilitate uploading of their blood pressure, weight and blood glucose. A simple courtesy telephone call was made on a monthly basis for additional nine months after participants had concluded the programme (c. 60–72% of participants that completed RPM did not respond to the calls at any time point).

Perspective

The cost analysis of the RPM programme was assessed from the organizational (i.e. healthcare system) perspective given that the healthcare organization will make the decision whether or not to sustain the programme after the grant funding ceases.

Cost data

Programme cost data were aggregated by year into five categories: (1) personnel, (2) equipment unit and transmission, (3) facility, (4) supplies, and (5) travel. For each of the five categories, annual and average costs of serving participants who were enrolled or completed the programme were calculated. For personnel costs, we used the actual staffing cost for the health professionals in the RPM programme (the RPM team), consisting of clinic manager, certified diabetes educator (CDE), nurse lead, nurse coach, certified medical assistant and information technology (IT) personnel. These rates were calculated based on annual salaries plus fringe benefits at a standard rate of 26% and were presented in aggregate for de-identification purpose. The cost per unit of the remote monitoring equipment (Cardiocom, Medtronic Inc., Minneapolis, MN), including a cellular base unit, blood pressure cuff, blood glucose meter, weight scale and necessary cords, was estimated at US$1600. Additionally, the fees for equipment pickup and delivery, and communication between the RPM team and participants were included in the category of cost of equipment. Facility costs included office space rental, facility maintenance and housekeeping, personal computers, monitors and Microsoft Office software. Supplies consisted of medical and clinical supplies (e.g. glucose meter test stripes, lancets and lancing devices, glove, gown, mask, gauze, bandages, sponge and personal care) and office supplies (e.g. printing, postage, freight, telephone and telegraph). Travel included the mileage reimbursement to participants’ home to set-up the RPM device.

A per-person-day cost (i.e. potential daily reimbursement rate) was established by combining these cost estimates with the patient volumes across three and a half years of programme implementation.

Data sources

Costs associated with the members in the RPM team were generated based on average annual salaries and benefits (fiscal years of 2016–2018), provided by the project co-ordinator. Non-personnel costs for equipment, supplies, facility and travel were based on actual amounts spent and were tracked from receipts and payment invoices.

Analyses

Base-case analysis

We used descriptive analyses to summarize the total and annual programme costs and further decompose the total cost by the five cost categories. Additional measures included the cost per participant enrolled and the cost per participant who completed the three-month programme. Moreover, we calculated the cost of serving per patient per day by dividing the total programme costs by the total person-days served within the intervention period. That is, the total person-days were estimated by summing up the number of active participants each day across the entire study period of three and a half years. A participant is eligible to contribute person-time to the study only as long as that person had not yet dropped out or withdrawn from the programme and, therefore, study nurse coaches still provided services. All research-related activities and costs were excluded from the analyses. Microsoft Excel was used to complete all analyses.

Sensitivity analysis (costs sustainment)

To estimate the cost of sustaining the RPM programme after the grant funding ceases, we assessed the resources needed. We excluded any personnel, activities and costs that might not be needed for continuing the programme. Specifically, we conducted one-way (deterministic) sensitivity analyses (varied 1 input parameter at a time) to evaluate the variation of the sustainment cost estimates to the input parameter assumptions. We labelled each input parameter as required versus optional depending on whether they are needed during the maintenance phase. The resources deemed as not required for sustainment were excluded from estimates. For personnel costs, we determined the number and full-time equivalent (FTE) of personnel required to operate, manage and deliver the RPM programme by consulting with organization administrators and leadership. Consequently, the RPM team consisted of one part-time clinic manager (30% FTE), one full-time and two part-time (25 and 30% FTE) CDEs, two full-time nurse leads, eight full-time nurse coaches (registered nurses), four full-time medical assistants (MAs), and one part-time IT (10% FTE). For non-personnel costs (equipment, facility and supplies), we calculated the minimum and maximum plausible values for each parameter by varying the original costs by 50%³² if data were not available or not specified. For the optional personnel (i.e. IT) and resources (i.e. space rental, equipment delivery, medical and clinical supplies, and computer and its auxiliary), the percentage of FTE varied from 0 to 100%. We used tornado diagrams³² to summarize the effects of varying key input parameters one at a time on the replication costs. The parameters were sorted in descending order by their influence on the cost outcomes, with longer bars denoting more important parameters.

Scenario analysis

We further conducted scenario analyses to estimate the sustainment costs if the study were continued at the organization based on the differential composition and efficiency of personnel of the RPM team. Scenario 1 consisted of one full-time clinic manager, one full-time CDE, one full-time nurse lead, five full-time nurse coaches and one full-time MA; Scenario 2 consisted of one full-time clinic manager, two full-time CDEs, one full-time nurse lead, eight full-time nurse coaches and two full-time MAs. These personnel compositions were derived via consensus from the organization administrator and leadership, and considering the total number of patients a nurse coach will be able to manage simultaneously.

Results

Implementation costs

Table 1 presents the results of the RPM programme cost analysis with a total of 1943 and 1364 participants that enrolled in, and completed, the programme, respectively. Across three and half years, the total RPM programme costs were estimated at US$4,374,544 with an average annual programme costs of US$1,249,870. The majority of the programme costs were attributed to personnel (68%), followed by RPM equipment associated costs (20%), medical, clinical and office supplies (8%), facility (3%) and travel (0.7%). The costs for per participant enrolled and per participant completed were calculated as US$2251 (n = 1943) and US$3207 (n = 1364), respectively. Furthermore, with the total amount of person-days served summed to 182,932 in a three and a half-year timespan, the per-person-day cost was estimated at US$24. The average length in the programme was 96 (SD 36) days per enrolled participants, which translated to a programme cost of US$2288 (95% confidence interval, 596–3979) per participant based on the period of time when participants were in the programme.

Table 1.

Input parameters for remote patient monitoring (RPM) programme costs (in US dollars).

Cost category	Year 1(n = 555)	Year 2(n = 861)	Year 3(n = 527)	Year 4 – half year	Total costs	Average cost per year	Cost per enrolled participant(n = 1943)	Cost per completed participant(n = 1364)	Cost per person-day(n = 182,932)
Personnel
RPM team^a	460,752	1,034,484	1,151,303	333,135	2,979,673	851,335	1534	2185	16.29
Equipment
Equipment unit/transmission	115,324	149,114	234,918	55,030	820,425	234,407	422	601	4.48
Telecommunication	4646	3916	6490	3302	18,354	5244	9	13	0.10
Pick-up/delivery/courier	493	38	13,727	17,254	31,512	9003	16	23	0.17
Facility
Space rental	15,234	14,790	5983	0	36,006	10,288	19	26	0.20
Maintenance	106	147	12,373	33,051	45,677	13,051	24	33	0.25
PC/monitor/software	49,441	1326	8575	3298	62,641	17,897	32	46	0.34
Supplies
Medical and clinical supplies	29,136	98,768	107,351	13,923	249,178	71,194	128	183	1.36
Office supplies	10,406	11,003	75,110	2193	98,711	28,203	51	72	0.54
Travel	1267	11,856	17,984	1260	32,367	9248	17	24	0.18
Total	686,806	1,325,441	1,633,812	462,446	4,374,544	1,249,870	2,251	3,207	24

^aIncluded clinic manager, certified diabetes educators, nurse leads, nurse coaches, medical assistants, and information technology.

Costs of sustainment

Based on the personnel needed for sustaining the RPM programme, the total costs for sustainment were estimated at US$1,639,781 on an annual basis (Table 2), which translated to 555 or 390 participants that are predicted to either enrol in or complete the programme each year. With the percentage effort assumption made for each health professional in the RPM team and total cost assumption made for non-personal costs (Table 2), Figure 1 summarizes the effect of variation in input parameters. The cost category with the greatest impact on the sustainment costs was the RPM equipment unit and transmission fees, followed by total costs on nurse coaches, medical assistant, CDEs, IT, nurse lead and clinic manager.

Table 2.

Assumptions of input parameters for sustainment costs estimate for sensitivity testing.

Cost category	Estimate, annual (US$)	Need for replication	Range
Personnel
Clinic manager	35,460	Required	n = 0.3–1
Certified diabetes educator	181,123	Required	n = 1–2
Nurse lead	186,619	Required	n = 1–2
Nurse coach	565,757	Required	n = 5–8
Medical assistant	175,628	Required	n = 1–4
Information technology	101,235	Optional	0–100%
Equipment
Equipment unit/transmission	234,407	Required	50–150%
Telecommunication	5244	Optional	0–100%
Pick-up/delivery/courier	9003	Optional	0–100%
Facility
Space rental	10,288	Optional	0–100%
Facility maintenance	13,051	Required	50–150%
Computer/monitor/software	17,897	Optional	0–100%
Supplies
Medical & clinical supplies^a	71,194	Optional	0–100%
Office supplies^b	28,203	Required	50–150%
Travel^c	4673	Required	50–150%
Total cost	1,639,781

^aIncluded glucose meter test stripes, lancets and lancing devices, glove, gown, mask, gauze, bandages, sponge and personal care.

^bIncluded stationary, printing and postage.

^cOnly costs of mileage reimbursement were included.

Figure 1.

One-way sensitivity testing around total sustainment costs (US$1,639,781) for key cost category. Each row shows the changes in cost, across the range of replication estimate values, from the total replication estimate. The parameters are sorted in descending order by their impact on the total recruitment costs. Longer bars indicate the most important parameters, giving the diagram its ‘tornado’ appearance.

Furthermore, the total annual programme costs were estimated at US$1,119,828 (US$725,868 of personnel) for Scenario 1 and US$1,492,747 (US$1,098,788 of personnel) for Scenario 2, which respectively translated to an estimated cost of US$2017 or US$2689 per participant enrolled and US$2873 or US$3830 per participant who completed the programme. Further converting the estimated costs to a per-person-day basis for potential daily reimbursement estimates, it was estimated that if each nurse coach managed to serve a panel of 93 participants, the break-even reimbursement rate for the healthcare provider would be US$21 per person-day under Scenario 1, as compared to US$29 with each nurse coach serving 62 participants under Scenario 2 (Table 3).

Table 3.

Results of estimated sustainment costs based on the personnel composition of the remote patient monitoring team.

Scenario of personnel composition in the RPM team^a	Estimated costs per year (US$)	Average costs per enrolled participant (US$)	Average costs per patients completed (US$)	Average cost per person-day (US$)	No. of participants per nurse coach
Scenario 1: one clinical manager, one full-time CDE, one nurse lead, five nurse coaches, and one MA	1,119,828	2017	2873	21	93
Scenario 2: one clinical manager, two full-time CDEs, one nurse lead, eight nurse coaches, and two MAs.	1,492,747	2689	3830	29	62

^aThe original RPM team consisted of one part-time clinic manager (30% FTE), one full-time and two part-time (25 and 30% FTE) CDEs, two full-time nurse leads, eight full-time nurse coaches, four full-time MAs and one part-time IT (10% FTE).

CDE, certified diabetes educator; FTE, full-time equivalent; MA, medical assistant; RPM, remote patient monitoring.

Discussion

Cost is a key decision factor when planning for or implementing an evidence-based, technology-facilitated health programme.³³ Lack of quantitative data on programme costs can be prohibiting for many telehealth programmes to be initiated or sustained.¹⁸ In this study, we assessed the cost associated with implementing the RPM programme for disease management among post-discharge patients with T2D and estimated the potential costs for future sustainment. Study results indicated that the total costs of implementing the RPM programme (1943 enrolled and 1364 participants completed the programme) across three and half year timespan were US$4,374,544 (average annual costs of US$1,249, 870), where RPM equipment accounted for the 20% of the total programme costs in addition to the 68% of personnel.

The implementation costs of our RPM programme is comparable to related findings from few previous studies. A recent systematic review of the cost of implementing an RPM programme targeting older adults with chronic conditions reported a programme cost of US$3857 (September 2020) per patient per year with three vitals monitored,²⁰ compared to US$3207 per participant of the three-month comprehensive programme in the current study tracking HbA1c, weight and blood pressure data. Large-scale implementation of such programmes can be challenging in terms of budgeting (cost of technology and infrastructure to monitor), educating patients in the use of devices, as well as incorporation of the remote patient data into routine clinical practice.³⁴ The current study represents a rare and unique effort in systematically assessing programme cost of a sizable RPM programme so that healthcare organizations can make an informed decision over adopting or sustaining similar programmes.

To facilitate the adoption of telemedicine services for diabetes management in the future, it is important to consider quality of service and cost-efficiency (e.g. the minimum length of intervention needed) simultaneously when forecasting programme costs. When considering the appropriate programme length in terms of effectiveness, our 90-day intervention design was set off for potential cost-efficiency given that several randomized clinical trials^35–38 comparing telehealth (e.g. RPM or mobile health) to usual care with a study period of three months had demonstrated their effectiveness on the glycaemic control among patients with T2D. In addition, based on different compositions of the care team in the scenario analysis, we estimated that a nurse coach would manage between 62 and 93 participants, which is comparable to a study with three to four nurses caring for a panel of 250 with patients with congestive heart failure.³⁹ On the contrary, in the Veteran Affairs (VA) care co-ordination/Home Telehealth programme, Darkins et al. had estimated that an individual care co-ordinator manages between 100 and 150 patients with general medical conditions or 90 patients with mental health-related conditions.⁴⁰ Furthermore, it is crucial for the healthcare system to consider the opportunity cost (approximately US$1.6 million per year in our case) when considering to what extent to continue the RPM programme after the grant funding ceases either in terms of foregone health benefits or alternative/competing uses of resources in addition to the usual care. Current evidence-based guidelines for the management of T2D consist of blood glucose monitoring, medication adherence and lifestyle modifications,¹⁶ and may lead to great reduction in future healthcare utilization (e.g. avoidable hospitalization and emergency room visits) through timely, technology-facilitated disease management and treatment.¹¹ Unfortunately, we were not able to account for the exact cost saving associated with the RPM programme in the current study due to the lack of a control group.

To further shed light on the potential daily reimbursement rate of RPM services, we calculated a daily per diem rate from the estimate of per-person-day costs of US$21–US$29 with a panel of 62–93 participants per nurse coach, required for a three-month programme to reach the break-even point. The capacity of a nurse coach or care co-ordinator should be determined based on a participant’s underlying chronic condition, the characteristic of the telehealth programme and guided by the cost-effectiveness perspective. Currently, 23 state Medicaid programmes provide reimbursement for RPM services, but these programmes varied greatly in rates and service coverages. For example, in Maryland, the RPM reimbursement rate is an all-inclusive rate of US$125 per 30 days of monitoring which covers equipment installation, participant education for using the equipment, and daily monitoring of the information transmitted for abnormal data measurements. In contrast, in the stage of New York, a fee of US$48 per month will be paid for RPM for a minimum of 30 min per month spent collecting and interpreting a participant’s RPM data.⁴¹ Converting these two monthly fees into a daily per-diem rate (US$4.2 or US$1.6), nevertheless, it is noticeable that our RPM programme incurred higher costs than the current Medicaid reimbursed rates. This may be attributed to the sophistication of the RPM programme in the current study consisting of both monitoring and diabetes management/self-management education and support on a weekly basis for each participant. Additionally, nurse coaches conducted calls when an alert was issued in the monitoring system due to out-of-range biometric results and provide corresponding guidance or arrangements (e.g. urge patients to go to the emergency room or contact patients’ primary care providers) after talking to patients. Average regular phone calls made were estimated between 112 and 157 calls per week given the entire study timeframe of three and a half years. RPM programmes for diabetes management can vary substantially in scope of services, sophistication of technology used and efficacy. Correspondingly, the reimbursement scheme of RPM programmes should be established and structured based upon the itemized service components and documented cost and cost effectiveness. In consideration of the wide scope of RPM services, further research is still needed before healthcare providers and insurers can make informed decisions to further differentiate and specify the current reimbursement rates to promote and support various evidence-based RPM programmes.

Limitations

Some study limitations should be acknowledged. First, as the cost data were retrieved from the existing line items in the grant budget table, it is not possible for us to further break down the cost into more detailed categories, such as the costs related to the monitoring of patients’ physiological data remotely or the time/costs that nurse coaches providing telephone education. Second, we were not able to conduct the incremental cost-effectiveness analysis of the RPM programme to alternatives due the lack of a control group in the original intervention project. Third, the study results may not be generalizable to other RPM programmes targeting different disease conditions due to varying clinical service contents or the composition of healthcare profession, and the use of different RPM system. Studies on the cost analysis of telemedicine programmes should compare the cost of programmes that are serving a similar patient population and with similar programme features in order to better inform decision making and policy formulations.²⁰ Finally, as mentioned previously, we were, unfortunately, not able to obtain the healthcare utilization data to estimate the potential cost-saving for the RPM programme, which prevented us from further estimating its financial impact to the healthcare system.

Conclusion

Understanding the costs of remote patient monitoring programmes for diabetes management is the first step toward justifying their adoption and sustainability in the face of budget constraints for stakeholders. The implementation and sustainment costs (e.g. break-even daily reimbursement rates) for RPM services, estimated under various assumptions of programme efficiency and care team compositions, as exemplified in this study, will help healthcare organizations make informed decisions in budgeting for and sustaining telehealth programmes.

Footnotes

Acknowledgement

We thank Tammy Slachetka, Project Co-ordinator of the Remote Patient Monitoring programme, for providing the budget information.

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article. However, the remote patient monitoring programme as described in this study was supported by Grant Number 1C1CMS331344 from the Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the article.

ORCID iD

Tzeyu L Michaud

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