Tele-ICU Cost Benefit Analysis

The CEO of Omnicure, Sanjay Subramanian, MD, has a great deal of tele-ICU experience. His experience and leadership in critical care medicine have given him insight into cost and revenue centers in tele-ICU. As the prohibitive costs of legacy tele-ICU systems present a significant barrier, a primary motive of Omnicure is to provide a low-cost telemedicine ICU service.

In the 2019 publication, Telemedicine in the ICU [1], Sanjay co-authors a chapter titled “Cost Benefit Analysis of Implementing Telemedicine in the ICU.” Costs of tele-ICU are broken down into the following categories:

  • Hardware
    • Fixed mounted cameras in patient rooms
    • Cabling for cameras
    • Desktop computers and multiple monitors for remote physician/nursing workstations
    • T1 lines to assure connectivity
  • Software
  • Staffing costs

The chapter details the maintenance and support costs of hardware, as well as the staffing support of tele-ICU command centers. The hardware and IT costs are quite significant. For example, the hardware for in room audio-video equipment is cited as $7,500 per patient room, with an additional cost for installation.

In centralized models of tele-ICU, a command center is staffed by nurses and support staff in addition to tele-intensivists. While this auxiliary staff is necessary for upkeep of the command centers, in a decentralized model like that of Omnicure, a tele-intensivist works from home. There is no need for additional staffing and upkeep of a command center.

Revenue

Sanjay’s chapter contains extensive discussion of the financial benefits of tele-ICU, under the assumption that there is no insurance reimbursement. It is worth mentioning reimbursement for Telehealth is growing and is an anticipated source of revenue in the coming years.

Revenue is generated through increased volume, retaining more patients who may otherwise be transferred to outside facilities. Sanjay writes, “The added ICU occupancy can elevate the case mix index for the hospital which in turn has a positive effect on reimbursement.” The chapter also discusses cost avoidance subsequent to tele-ICU implementation, acknowledging that the literature has reported a variance in the extent. Cost avoidance is a result of fewer ICU complications, appropriate bed utilization, and reduced length of stay.

Sanjay analyzes tele-ICU literature on cost-effectiveness, finding a range of statistics. In one 2017 study by by Lilly et al. [2], “The capital costs of implementing a tele-ICU program (~$7 million)* were recuperated in roughly 3 months based on the improved net contribution margin of $30 million seen with the tele-ICU program. In addition to improved clinical outcomes, this study showed improved financial outcomes with an ICU telemedicine program.” 

*This figure includes set-up of a centralized command center and hardware in every patient room

The high cost can impede the adoption of tele-ICU. Omnicure aims to provide comprehensive tele-ICU services without capital costs that are deterrent.

Receiving hospitals report improved patient outcomes. These hospitals are able to generate revenue from a tele-ICU program through increased volume, retaining more patients who may otherwise be transferred to outside facilities. Sanjay writes, “The added ICU occupancy can elevate the case mix index for the hospital which in turn has a positive effect on reimbursement.” The chapter also discussed cost avoidance subsequent to tele-ICU implementation, acknowledging that the literature has reported a variance in the extent of cost reduction.

Across the board, studies have shown that tele-ICU programs result in improved patient outcomes, and decreased length of stay and ICU mortality. It is important to consider the cost and revenue centers, and develop a program that will minimize implementation costs while delivering a service that still results in improved patient care.

The impact of an ICU telemedicine program has the potential to be far reaching, both clinically and financially... The up-front capital investment in a tele-ICU program may be substantial, but through cost-effective care, the return on investment can be significant and realized quickly.

Sanjay Subramanian, MD
  1. Koenig, Matthew. Telemedicine in the ICU. Springer, 2019.
  2. Lilly CM, et al. ICU telemedicine program financial outcomes. Chest. 2017;151(2):286–97.

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