Saving the system: Remote care management programs bring major cost savings by improving care and reducing hospitalizations

‍Benefits of remote care management programs and its impact on the health system‍

Remote care management programs improve the health of Medicare patients and profoundly impact the health system in a variety of ways. A robust program can improve outcomes and reduce costs. With skyrocketing healthcare costs, an exponentially growing Medicare population, and chronic disease on the rise, remote care management programs can help improve the health of patients, increase the efficiency and effectiveness of the care provided by clinics and practices, and reduce health care expenditures for Medicare and the healthcare system. 

A comprehensive, well-designed and robust remote care program reduces costs and improves the quality and effectiveness of care:

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Quality Measures:

Improves health outcomes

Improves health status

Improves the quality of care provided

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Effectiveness Measures:

Improves the efficiency of care provided

Improves the effectiveness of care provided

Improves patient and provider satisfaction

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Costs and Impact Measures:

Reduces hospitalizations

Reduces readmissions

Reduces healthcare expenditures

Reduces costs for Medicare and the healthcare ecosystem 

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Remote care programs reduce hospitalizations across the senior patient population

Patients and the healthcare system in general, benefit from remote care programs. 

One of the largest impacts of the holistic benefit of remote programs is the reduction in hospitalizations and readmissions for senior patients. A Centers for Medicare & Medicaid Services analysis indicates that remote care management programs like Chronic Care Management (CCM) enhance patient health outcomes and enable healthcare providers to receive reimbursement for services they often already offer. The analysis revealed nearly a 5% reduction in hospitalizations and a 2.3% decrease in emergency department visits with CCM10. Additionally, providers noted increased patient satisfaction, better adherence to recommended treatments, and improved clinician efficiency. This reduction is a clear indicator of major improved health outcomes, demonstrates an improved health status and yields significant cost savings in the patient’s care - and for the healthcare system overall. As remote care programs increase, the opportunity to impact the huge and growing numbers of Medicare patients is profound. 

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Costs and impact of remote care -  better health and significant cost savings across the system

Average cost of hospitalizations

A 3-day hospital stay can cost up to as much as around $30,000 on average based on a variety of patient and location specific factors. However, the overall average cost for a typical 5.9 day hospital stay in the US is around $17,500. The cost can vary significantly based on factors like location, procedures performed, insurance coverage, and length of stay.1,2

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The latest data available shows the average per-day hospital cost as $3,025.00, with an average stay of 5.9 days for a total average of $17,500 per hospital stay.1 

Between 1999 and 2021, the average hospital stay cost increased 161.7%. In 1999, the average cost was $1,102 a day.3  

According to various 2024 reports analyzing data from the 2022 AHA Annual Survey, there were more than 33.5 million hospital admissions in the US.1,4   

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Exponential increases in health care costs/spending annually

Exponential annual increases in costs of care and health care spending - often outpacing the economy - continue to impact and adjust this number.  National health spending projections show significant growth in health spending in the coming years.5 There was a 4.4% increase in medical costs from 2012-2022 (and likely even greater increases in the subsequent two years). High healthcare spending is not leading to better health outcomes in the United States.6,7 The growth of robust, well executed remote care management programs will hopefully improve this. 

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Average cost of remote care management programs

Using the Chronic Care Management (CCM) national reimbursement rate 8 of $62.58 per month, multiplied by 12 months, we have an estimated annual cost of $750.00 per patient to run a streamlined CCM remote care program.

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$17,500  -  $750.00     =  $16,750 saved per each avoided hospitalization*

(PP, Avg cost/hospitalization)   (PP, Annual cost to run CCM)

*approximate/estimate

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Macro savings from remote care programs reducing hospitalizations

Assuming even the lowest end of numbers, metrics and savings, remote care programs save a tremendous amount of money in avoiding hospitalizations. With projected savings of $16,750 for each hospitalization avoided - just one remote care patient avoiding one hospitalization would pay for at least 20 other patients’ entire year of CCM care.  

Based on assumptions using a small medical practice with 1,000 patients and assuming only a minimal 5% of those patients avoid just one hospitalization10 per year (50 patients) - that would mean over $840K in savings for just that small practice. Multiply those savings for just one hospitalization avoided per year for the total number of Medicare patients enrolled in the US (currently 67.1M9) and you have potential macro savings for the healthcare system of over $56 Billion every year. Obviously, not every patient enrolled in Medicare or in remote care programs will be saved from hospitalization, but these estimates demonstrate the profound potential impact of remote care on systemic savings.  

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$16,750 X 5% of 67 Million Medicare population = $56 Billion in annual savings

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Profound impact of remote care on decreased hospitalizations and savings

The financial impact of remote care services and programs on the health system is quite profound. With the estimated cost savings from reduced hospitalizations and hospital readmissions alone, remote care programs could potentially save Medicare billions of dollars, and be one important step into potentially helping to save Medicare from going bankrupt as the number of baby boomers aging in to senior health and Medicare eligibility grows each day.  In addition to the systemic savings by reducing hospitalizations, remote care programs also improve the efficiency and effectiveness of care, improve patient and provider satisfaction and engagement, and improve patient outcomes and the quality of care received. 

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Medsien remote care programs offer a simple and effective approach to improved outcomes and significant cost savings to your practice and the system 

Unique and robust remote care programs save money, streamline systems, improve health outcomes and make patients and providers happy with their healthcare. 

Medsien makes remarkable remote care programs simple and effective. Our remote care management solutions have staffing solutions, sophisticated software infrastructure, and highly personalized care for highly functional, sophisticated and successful remote care programs that can be up and running in just a few days.

• Medsien provides dedicated clinical and operational staff to help implement, run and manage successful remote care management. The staff and patients are closely connected, improving trust, satisfaction and health outcomes. Medsien staff are integrated with your practice teams, increasing the number of team members, but with no added operational complexity or time burden for your staff.

• Medsien is a leading creator of highly sophisticated software systems that begin with seamless EHR integration and then build in data tracking, reporting, procedures, compliance and safety into the programs and procedures. This allows highly efficient, effective care to happen seamlessly.

• Medsien knows how important personalized care is for good outcomes. Personalized care is connection, relationships, support and trust. As advances in Generative AI technologies become more and more integrated into healthcare delivery, it remains essential to still maintain a focus on the patient and patient experience. Advancing technology and automation have significantly improved many aspects of healthcare organization efficiency, accuracy and costs, but they cannot replace the critical part of personal communication and connection that is essential to good, effective healthcare - especially for Medicare patients.

Now, more than ever, it is crucial to figure out a way to use these important advances to improve efficiencies and effectiveness, while still understanding that healthcare is inherently personal. The key to good outcomes and patient satisfaction - and ultimately value-based care - is to utilize effective advances while maintaining a way for patients and caregivers to communicate and have a personal connection. 

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SOURCES AND CITATIONS:

1. Hartwick, Preston. May 14, 2024 A Night to Remember: The Staggering Costs of a Single Hospital Stay Revealed. GoBankingRates.com/Yahoo.Finance https://finance.yahoo.com/news/night-remember-staggering-costs-single-190018622.html
2. https://www.healthcare.gov/young-adults/ready-to-apply/) / kff  
3. KLAS Research Report. Remote patient monitoring 2018. High potential in shifting landscape. https://klasresearch.com/report/remote-patient-monitoring-2018-high-potential-in-a-shifting-landscape/1273
4. Yang, Jenny.  Total number of hospital admissions in the US from 1946-2022. Statistica. May 22, 2024.  https://www.statista.com/statistics/459718/total-hospital-admission-number-in-the-us/#statisticContainer
5. www.CHCF.org
6. www.ama.org
7.  www.pgpf.org
8. CMS Physician Fee Schedule https://www.cms.gov/medicare/physician-fee-schedule/search?Y=0&T=4&HT=0&CT=0&H1=99490&M=5
9. CMS Medicare Monthly Enrollment. Feb 2024 Report. Last update 05/22/24. https://data.cms.gov/summary-statistics-on-beneficiary-enrollment/medicare-and-medicaid-reports/medicare-monthly-enrollment‍
10. https://www.cms.gov/files/document/chronic-care-management-glance.pdf

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