What cost evidence supports the use of technologies in home and community based caregiving of

older adults?

Presented by

Brooke Harrow, PhD

University of Massachusetts, Boston

Co-authors: Linda W. Samia, RN, MSN, CNAA, Russell E. Morgan, Jr., Dr.P.H.

Supported by the National Institute of Nursing Research (Grant #NR04350) and the SPRY Foundation

Overview of this presentation

• The progression of home based technology

• How are new technologies being assessed in terms of cost?

• What do we know about the cost methodology being used?

• What is the current cost evidence?

• What direction do we go from here?

Introduction

• Technology has driven health care costs in the institutional setting

• Until recently there has been little concern about the cost-effectiveness of these technologies.

• More recently focus turned to cost-effectiveness of new technologies as payers make decisions about reimbursement policies

• Ironically, this increased focus includes caregiving technology that keeps older adults out of institutional settings.

Progression of home technology

Low-cost: personal emergency response systems

Relatively uncomplicated therapeutic measures such as home oxygen dispensers

High-cost: high tech therapeutic interventions

Our interest today: Technology for caregiving support

• New devices or services providing caregiving support rather than the medicalization of the home.

• Tele-health or Telemedicine: The delivery of health care services over distances using electronic information and communication technologies

Goals of computer-based technology to assist community

based caregiving• Increase home health care access to

underserved areas

• Ease caregiver burden

• Improve patient involvement in management of her condition

• Prevent exacerbations that could result in hospitalizations

Why do we care about cost?

• To succeed in the development and adoption of new technology, there must be added value that can be demonstrated.

• In health care, this value needs to be convincing to third party payers.

How are new technologies being assessed in terms of costs?

• Cost Minimization Analysis: Least costly alternative that produces equivalent outcomes.

• Cost Effectiveness Analysis (CEA): Costs in monetary units, outcomes in non-monetary units

• Cost Utility analysis: Form of CEA, with outcomes in terms of utility or quality adjusted life years

• Cost Benefit analysis: costs and outcomes both in monetary units

The Lewin Group, Assessment of Approaches to Evaluating Telemedicine, Final report to the Office of the Assistant Secretary for Planning and Evaluation, Department of Health and Human Services, Contract Number HHS-10-97-0012, December 2000

Example of a cost-benefit analysis for technologies that maintain older adults

in the community• Savings related to nursing home cost easily

calculated. Any delay in institutionalization can be compared with cost of technology

• Technology that allows caregivers to spend less time on informal care also represents cost savings

• These savings are compared to the cost of the technology

Cost Methodology

• Identify both direct cost and indirect costs of technology. May include:– Clinician and other labor cost– Equipment– Training and maintenance– Upgrades– Ongoing telecommunications– Caregiver time

Cost Perspective

• Refers to the standpoint from which costs and benefits (or outcomes) are realized

• Can be either from the clinician, patient, agency, payer or society.

• Economic perspective must be explicit

The Lewin Group, Assessment of Approaches to Evaluating Telemedicine, Final report to the Office of the Assistant Secretary for Planning and Evaluation, Department of Health and Human Services, Contract Number HHS-10-97-0012, December 2000

Other issues related to cost methodology

• Time Horizon: capturing utilization and cost data beyond the project start-up period

• Fixed costs of technology are high and it might be appropriate to describe both average costs and marginal costs of the technology

• Future cost and outcomes must be discounted relative to their present value

• Sensitivity analyses should be performed to determine how variation in estimates effect the analyses.

The Lewin Group, Assessment of Approaches to Evaluating Telemedicine, Final report to the Office of the Assistant Secretary for Planning and Evaluation, Department of Health and Human Services, Contract Number HHS-10-97-0012, December 2000

What is the current cost evidence?

• With respect to home health care:– Cost of a traditional in-home registered nurse visit is

$112 compared to about half that for the cost of a tele-health visit

– A nurse can visit patients every 20-30 minutes versus every 75 minutes

• With newly capitated episodic reimbursement, home health agencies are very interested in exploring alternative ways to deliver nursing services to the homebound

What do we know from systematic reviews of cost-effectiveness studies?

• Wootton’s review (2001) found little hard evidence of cost-effectiveness for home “telenursing”and suggests it may be difficult to have cost-effective use of technology in the home if it requires expensive equipment.

• Pamela Whitten and colleagues (2002) review of cost-effectiveness studies for telemedicine interventions found “no persuasive evidence”of cost-effectiveness

Wootton R. Recent advances: Telemedicine. BMJ 2001;323:557–60

Whitten, P., Mair, F. S., Haycox, A., May, C. R., (2002). Systematic review of cost effectiveness studies of telemedicine interventions. British Medical Journal, 324, 1434-1437.

Future cost analyses

• Should have the scientific rigor and follow the most up-to-date cost-effectiveness analysis techniques so that informed decisions can be made about adoption of new technology.

• Cost-effectiveness can mean that the additional benefit is worth the cost

Where do we go from here?

• Critics of the emphasis on cost-effectiveness argue that the demand for scientific rigor in the study of new technologies will impede progress in medical practice.

• Are we holding technology for community-based caregiving to a higher standard that has been held to technology used in institutional settings?

What if it really does cost more to provide this high tech support?• Expensive technology to support medical needs is

already being used in the home setting as reimbursement policies have moved patients out of the institutional setting and into the home.

• However, the basic needs of many patients for non-medical community support often get unmet.

• We need to decide as a society if there is a price we are willing to pay for increased quality of life for community dwelling older adults.