Telehealth Monitoring May Win Big with New Government Regulations

Does anybody like government imposed penalties? Well, as is normally the case , it depends where you are as a stakeholder.

Readmission penalties drafted in the Affordable Care Act are set to kick in starting October 2013 in the form of Medicare reimbursement cuts to hospitals who have high rates of readmissions for certain health conditions including heart attack, pneumonia and heart failure. Other conditions will be included starting in 2015.

The Centers for Medicare & Medicaid Services (CMS) says their cost for return trips to hospitals are at least $17 Billion annually, so no wonder they want to implement penalty measures to the worst offenders¹.

"1 in 3 were rehospitalized within 90 days."In 2009, readmissions for Medicare patients were 1 in 5 for the first 30 days after discharge and 1 in 3 were rehospitalized within 90 days². Yes, 1 in 3! CMS believes it can save more than $8 billion over 10 years by reducing hospital readmissions, which is twice the estimated savings for implementing Accountable Care Organizations (ACO's)¹.

These penalties are supposed to influence hospitals to take significant measures in reducing their readmission rates and at the top of the list is implementing telehealth remote monitoring which often includes non-invasive blood pressure (SunTech provides OEM modules to several telemonitoring companies). According to an InMedica study, worldwide telemonitoring was done on 308,000 patients in 2012 and it is projected to increase to 1.8 million by 2017 largely due to the US readmission penalties and other government initiatives to reduce healthcare costs³.

Significant growth has been prophesized for the telehealth market for some time now and for the most part it has not materialized. Even with several US States now requiring insurance coverage for certain telehealth activities, the expected market growth is still "waiting in the wings". I expect those in the biz may see readmission penalties as the catalyst with the most potential to jumpstart the industry. It is obvious that many believe that the telehealth market will skyrocket to great heights as several big players are heavily invested including Intel, GE, Honeywell, Bosch, Bayer, Rubbermaid, AT&T, Qualcomm, Philips and the list goes on and on. I am confident that telemonitoring has the capability to drive down readmission rates. Maybe this government penalty will make it a reality.

1. CMS, Innovations for Better Health and Stronger Medicare.
2. Jencks MD, MPH, Williams MD, Coleman MD, Rehospitalizations among Patients within the Medicare Fee-for-Service Program, New England Journal of Medicine, 2009; 360: 1418-28.
3. InMedica Press Release, Telehealth to Reach 1.8 Million Patients by 2017, 2013 21 Jan.