Economic Evaluation of Telemedicine for Patients in ICUs∗

Byung Kwang Yoo, Minchul Kim, Tomoko Sasaki, Joy Melnikow, James P Marcin

Research output: Contribution to journalArticle

17 Citations (Scopus)

Abstract

Objective: Despite telemedicine's potential to improve patients' health outcomes and reduce costs in the ICU, hospitals have been slow to introduce telemedicine in the ICU due to high up-front costs and mixed evidence on effectiveness. This study's first aim was to conduct a cost-effectiveness analysis to estimate the incremental cost-effectiveness ratio of telemedicine in the ICU, compared with ICU without telemedicine, from the healthcare system perspective. The second aim was to examine potential cost saving of telemedicine in the ICU through probabilistic analyses and break-even analyses. Design: Simulation analyses performed by standard decision models. Setting: Hypothetical ICU defined by the U.S. Literature. Patients: Hypothetical adult patients in ICU defined by the U.S. Literature. Interventions: The intervention was the introduction of telemedicine in the ICU, which was assumed to affect per-patient per-hospital-stay ICU cost and hospital mortality. Telemedicine in the ICU operation costs included the telemedicine equipment-installation (start-up) costs with 5-year depreciation, maintenance costs, and clinician staffing costs. Telemedicine in the ICU effectiveness was measured by cumulative quality-adjusted life years for 5 years after ICU discharge. Measurements and Main Results: The base case cost-effectiveness analysis estimated telemedicine in the ICU to extend 0.011 quality-adjusted life years with an incremental cost of $516 per patient compared with ICU without telemedicine, resulting in an incremental cost-effectiveness ratio of $45,320 per additional quality-adjusted life year (= $516/0.011). The probabilistic cost-effectiveness analysis estimated an incremental cost-effectiveness ratio of $50,265 with a wide 95% CI from a negative value (suggesting cost savings) to $375,870. These probabilistic analyses projected that cost saving is achieved 37% of 1,000 iterations. Cost saving is also feasible if the per-patient per-hospital-stay operational cost and physician cost were less than $422 and less than $155, respectively, based on break-even analyses. Conclusions: Our analyses suggest that telemedicine in the ICU is cost-effective in most cases and cost saving in some cases. The thresholds of cost and effectiveness, estimated by break-even analyses, help hospitals determine the impact of telemedicine in the ICU and potential cost saving.

Original languageEnglish (US)
Pages (from-to)265-274
Number of pages10
JournalCritical Care Medicine
Volume44
Issue number2
DOIs
StatePublished - Feb 1 2016

Fingerprint

Telemedicine
Cost-Benefit Analysis
Costs and Cost Analysis
Quality-Adjusted Life Years
Length of Stay
Depreciation
Cost Savings
Hospital Mortality

Keywords

  • cost saving
  • cost-effectiveness
  • economic evaluation
  • intensive care units
  • telehealth
  • telemedicine

ASJC Scopus subject areas

  • Critical Care and Intensive Care Medicine

Cite this

Economic Evaluation of Telemedicine for Patients in ICUs∗. / Yoo, Byung Kwang; Kim, Minchul; Sasaki, Tomoko; Melnikow, Joy; Marcin, James P.

In: Critical Care Medicine, Vol. 44, No. 2, 01.02.2016, p. 265-274.

Research output: Contribution to journalArticle

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N2 - Objective: Despite telemedicine's potential to improve patients' health outcomes and reduce costs in the ICU, hospitals have been slow to introduce telemedicine in the ICU due to high up-front costs and mixed evidence on effectiveness. This study's first aim was to conduct a cost-effectiveness analysis to estimate the incremental cost-effectiveness ratio of telemedicine in the ICU, compared with ICU without telemedicine, from the healthcare system perspective. The second aim was to examine potential cost saving of telemedicine in the ICU through probabilistic analyses and break-even analyses. Design: Simulation analyses performed by standard decision models. Setting: Hypothetical ICU defined by the U.S. Literature. Patients: Hypothetical adult patients in ICU defined by the U.S. Literature. Interventions: The intervention was the introduction of telemedicine in the ICU, which was assumed to affect per-patient per-hospital-stay ICU cost and hospital mortality. Telemedicine in the ICU operation costs included the telemedicine equipment-installation (start-up) costs with 5-year depreciation, maintenance costs, and clinician staffing costs. Telemedicine in the ICU effectiveness was measured by cumulative quality-adjusted life years for 5 years after ICU discharge. Measurements and Main Results: The base case cost-effectiveness analysis estimated telemedicine in the ICU to extend 0.011 quality-adjusted life years with an incremental cost of $516 per patient compared with ICU without telemedicine, resulting in an incremental cost-effectiveness ratio of $45,320 per additional quality-adjusted life year (= $516/0.011). The probabilistic cost-effectiveness analysis estimated an incremental cost-effectiveness ratio of $50,265 with a wide 95% CI from a negative value (suggesting cost savings) to $375,870. These probabilistic analyses projected that cost saving is achieved 37% of 1,000 iterations. Cost saving is also feasible if the per-patient per-hospital-stay operational cost and physician cost were less than $422 and less than $155, respectively, based on break-even analyses. Conclusions: Our analyses suggest that telemedicine in the ICU is cost-effective in most cases and cost saving in some cases. The thresholds of cost and effectiveness, estimated by break-even analyses, help hospitals determine the impact of telemedicine in the ICU and potential cost saving.

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