The Telehealth Advancement Act could yield savings of more than $1.3 billion a year to Medi-Cal, the state’s Medicaid program, according to a report prepared for CCHP.
- Its expanded definition of “telehealth” allows for home monitoring systems, while the old definition of “telemedicine” did not;
- Its expanded definition of medical provider includes all medical professionals licensed by the State of California, not just physicians, which now allows for all medical staffers who operate disease management programs;
- It removes limits on the physical locations where telehealth services may be provided, which allows for home-based services;
- It allows reimbursement for telephone and email services, which some home monitoring programs use.
How the Savings Would Work
The potential savings for diabetes monitoring savings could reach $417 million a year, which would mean up to $127 million in savings for California.
Potential savings for the state’s share of these two conditions in Medi-Cal could be up to $408 million a year; the federal government’s share could total up to $938 million a year.
The report’s estimates are rigorous and credible. They came from reviews of 42 scientific studies, which identified cost savings from telehealth-based disease management programs. The report then applied average savings from these studies to all Medi-Cal patients with the two chronic conditions.
How the Savings Were Calculated
It then estimated 1.4 percent of Medi-Cal patients with heart failure, using data from the 2009 California Health Interview Survey (CHIS).
The report then divided annual Medi-Cal expenditures by average enrollment, adjusted that figure to reflect higher average costs among heart failure patients, and subtracted that total from overall Medi-Cal expenditures.
For diabetes, the report averaged the savings identified in scientific studies, to achieve an estimated savings rate of 9 percent.
It then estimated 6 percent of Medi-Cal patients with diabetes, using data from the 2009 CHIS survey.
The report then divided annual Medi-Cal expenditures by average enrollment, adjusted that figure to reflect higher average costs among diabetes patients, and subtracted that total from overall Medi-Cal expenditures.