Remote Physiological Monitoring (RPM) is a powerful clinical tool to help patients manage their chronic conditions, prevent hospital readmissions, or to facilitate an early hospital discharge through a hospital at home service.
But many RPM programs, especially in support of chronic care management are difficult to scale cost effectively and oftentimes fall short of the promised or expected outcomes.
Last week I wrote about the 5 Reasons Why RPM Programs Fail, which were:
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#5 Negative Financial ROI
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#4 Lack of Clinician Buy In
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#3 Cumbersome Technology
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#2 Insufficient Monitoring Support
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#1 Lack of Patient Engagement
In my experience of implementing RPM programs, the most significant root cause of failure is actually the failure to truly (emotionally) enroll the patient in the program to ensure reliable participation.
But more on that in a later article.
In today’s article we will focus on the first root cause: a negative financial ROI.
The Three Use Case for RPM
For the purpose of discussing potential fixes to the ROI, I’d like to discuss separately the three most common use cases for an RPM program:
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RPM for Chronic Care Management (CCM)
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RPM for Readmission Prevention
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RPM for Hospital at Home
RPM for CCM focuses on the long-term (6+ months) management of patients with multiple chronic diseases.
RPM for Readmission Prevention focuses on short term, 1-3 month monitoring to prevent same-cause readmissions which for some conditions (CHF, COPD and others) are not reimbursed by some payors.
The newest use for RPM, Hospital at Home, focuses on an earlier discharge from the hospital for non-critical patients that still need a higher level of care than ambulatory.
When the Costs are Too High
To fix the negative financial ROI we first have to look at what is causing the negative ROI: Are the costs too high or is the revenue too low?
On the expenses side the main costs are:
(1) Acquisition or depreciation cost of the patient-deployed kit of monitoring devices.
The costs of the devices depend largely on the technology that connects the devices to the internet. Typically Bluetooth devices, which connect to a patients cellphone, to a tablet, or a hub are cheaper than cellular devices that connect directly to the cellular network, but may also be more costly to support (see (5) below).
In a CCM program, these kits typically stay with the patient and are not recovered. Obviously, the longer patients stay in the program, the lower the overall costs, which is why it is key to mindfully enroll patients in the program so that they stay sufficiently long enough — not only to reap the health benefits of a better controlled chronic disease, but also to make the overall program financially more sustainable.
For the shorter time frame Readmission Prevention and Hospital at Home use cases, the RPM kits can be retrieved, cleaned, recalibrated, and then redeployed to keep the cost down, though there may be a cost associated with the refurbishing process. Selecting devices that clean easily and do not need calibration will lower the overall cost.
(2) The Training and Deployment Cost
This involves the time spent on enrolling the patient (typically in the clinic or in the hospital) into the program and involves the completion of forms and a walkthrough of the monitoring devices. This can take between 20 and 60 minutes per patient.
This could be conducted by a technician or MA but in smaller programs it is oftentimes completed by the monitoring nurse as well (see (4) below).
Alternatively, some RPM programs use Community Health Workers or Community Paramedics to assist the patient in setting up the monitoring.
Cost savings opportunities here lie in the proper screening and selection of patients with the necessary basic cognitive and technical capabilities to minimize the training and onboarding.
(3) The monthly fee for the monitoring platform.
These fees have come down 70%-80% from just a few years ago, with the market average hovering around $12 per patient per month.
This fee should not have a significant impact on the overall cost and sometimes paying a bit more for a solution that is more user friendly and efficient for the monitoring staff to use may pay off in the long run.
In addition, as competitive pressures have also brought down the cost, given the enrollment of a sufficiently high number of patients will provide ammunition for a negotiation with the vendor to further bring down the cost.
(4) The cost of the designated monitoring staff.
On the whole, this is by far the most significant cost in the overall equation.
Many programs start out by assigning an RN to the job, but as the program grows the various aspects of the monitoring task (checking on compliance, calling patients to remind them to take their measurements, calling patients to confirm out-of-bounds readings) can be handled by an MA and only be escalated to an RN as clinically necessary.
According to data shared with me by health systems and based on data by an RPM service provider that uses US-based monitoring nurses, an experienced monitoring nurse can handle up to 150 patients simultaneously (for the CCM use case) which should normally make for a solid positive ROI.
For the Readmission Prevention use case, the ratio can drop down to as low as 50-70 patients, depending on the severity of the patients’ conditions, but the ROI (of a prevented, unreimbursed readmission) is also much higher.
(5) The technical support cost.
This cost relates directly to the usability and user-friendliness of the monitoring devices and any other patient facing technology. Early RPM monitoring kits were very finicky and often would lose connection which oftentimes required many hours of a technician to try to remotely walk the patient through the process to reconnect.
The solutions to minimize this cost include to select monitoring devices that connect via the cellular network and to leverage technical support staff highly skilled in assisting patients that are oftentimes elderly and have little technical affinity. I.e., a typical “helpdesk” person assisting professional staff may not be best suited to help patients with their technical challenges.
Tweaking the Revenue Side
On the revenue side, for the “RPM for CCM” use case, there are actually a number of billing codes that organizations can bill Medicare and some Medicaid programs for, including
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a charge for the setup
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a monthly charge for the data collection of at least 16 days
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a charge for every 20 minutes spent on reviewing of the data
In addition to RPM charges, the organization can also in parallel charge for time spent on managing the chronic care through CCM billing codes for the care time.
To ensure a maximum ROI, an audit of the submission (and acceptance) of the proper RPM and CCM codes is important. Without proper tracking, it may be that some codes were never submitted, or that they were denied due to inadequate documentation.
One revenue opportunity that is oftentimes not accounted for in an RPM ROI evaluation is the potential for more regular follow up visits. While the goal behind RPM is to dial in the medications (and hopefully also the lifestyle changes), regular follow up visits ensure the continued engagement of the patients, resulting in more visits — which is still much cheaper than a trip to the ER.
Given that the RPM program is “remote” by design, many of those visits can also be conducted via telehealth, i.e., as a video visit, adding to the convenience on the patient side.
When patients are not enrolled in an RPM program, they are oftentimes not as engaged in their care, and therefore are less likely to regularly see the doctor until it’s too late and they are in a crisis that necessitates a trip to the ER.
For the “RPM for Readmission Prevention” use case, the primary benefit on the “return” side are the prevented admissions. Since it is close to impossible to measure something that did not happen (much to the dismay of my professional career that focuses on improvement and prevention), the best way to estimate “return” is to look statistically at the readmission rate for the conditions that the RPM program is covering.
To properly account for the “return”, however, you must account only for the actual average cost of a readmission, not what the hospital would charge (or even get reimbursed) for a hospital stay of a certain length.
This typically requires a bit of homework to look at a statistically significant number of readmitted patients and tally up and average out their cost.
In 2016 the CFO of a rural health system told me that their cost of readmission at the time was easily $8,000 per patient per stay and that they were averaging 3-5 readmissions per month. With some quick math I replied: If we can cut those 36-60 readmissions in half, given the $200,000 in potential savings for 25 prevented readmissions, are you ready to authorize the RPM program?
It was an easy sell.
There’s more to Return than Revenue
In addition to maximizing the revenue (or cost savings) there are additional benefits.
For example the state of Maryland has the concept of penalizing hospitals for “potentially avoidable utilization” that results in reduction of payment that can significantly hurt the bottom line.
But there are also quality measure to consider, value-based arrangements where improved health outcomes (e.g., hypertension or A1C control) are rewarded.
Given enough data, a high-functioning RPM program can also serve as a great marketing tool when the organization can publicize their results and effectiveness of their chronic care management program through a demonstrated reduction in ER visits or hospitalizations or even deaths.
More Fixes Are Forthcoming
To position an RPM program on a solid financial footing is but one way to fix a failing RPM program. In my next article I will continue with the list of the other RPM failures to share solutions to prevent failure.
How are you calculating your RPM program’s ROI? Or aren’t you? Let me know.
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Christian Milaster and his team optimize Telehealth Services for health systems and physician practices. Christian is the Founder and President of Ingenium Digital Health Advisors where he and his expert consortium partner with healthcare leaders to enable the delivery of extraordinary care.
Contact Christian by phone or text at 657-464-3648, via email, or video chat.
