Telemedicine Business Case and ROI

In essence the business case is a statement of the goals for the proposed telemedicine program(s) backed by the detailed financial analysis showing viability, sustainability and Return on Investment (ROI) in achieving those goals. Goals are most often defined in terms of Quality of Care, i.e.

  • Increased access to [Specialist] Care
  • Better patient outcomes and reduced recidivism
  • Improved patient satisfaction
  • Healthcare provider (e.g. physician) recruitment and retention
  • Other social benefits
With the financial analysis built from an understanding of a complete revenue and cost model:


Business Model - Financial Components


that is directly dependent on whether you are purely a clinical service satellite site, a clinical service provider, or a network of both. It is also dependent on the services (clinical, educational, interpretive, and administrative) that you plan to provide.

Business assumptions can be validated by deploying a single service initially (that addressing the highest need as identified by a Needs Assessment), however, an overall multi-service plan will provide the largest ROI.

Both Direct Revenue and Direct Cost variables are relatively straight forward, although it is recommended that different reimbursement assumptions, service volumes, and growth rates are modeled. However, for Enhanced Revenue/Reduced Cost and Indirect Cost the variables are more challenging:


Enhanced Revenue/Reduced Cost Examples
Increased [internal] resource availability ER beds, specialists (through better utilization)
Reduced patient by-pass/walk-out Rural referral requiring patient to travel, ER overcrowding causing walk-out
Increased revenue per patient Patient retention [at rural facility]
Reduced travel Ambulance transport on referral, specialist travel to patient
Increased specialist service revenue Increased patient acquisition, efficiency of on-demand
Reduced cost of provider services Efficiency in interpreter services, on-demand specialists

 

Indirect Cost Examples
Increased support demand Additional burden on internal IT/network support resources
Facilities Additional insurance, energy costs
Administration Contract and grant management