A “value-based digital health” reimbursement model as a plausible payment solution for new technology appeared in the 2016 McKinsey Report How Healthcare Systems Can Become Digital-Health Leaders by Gerardo Aue. The concept advocates that since health systems hold the data needed to measure outcomes, why not use this information to measure the outcomes of digital health services? If cost reductions or quality improvements can be found in the data, the benefits can be shared with the digital health solution providers.
In a conversation with Robert Herzog, CEO and Founder of eCaring, a highly acclaimed a cloud-based home healthcare technology, I asked him to share his thoughts on the subject. He commented, “I think we are an essential tool for a dual payment model such as value-based care payments. If you think about what people say is driving the goals of changing the health care system in this country, there are two main areas, one is utilization. You want to reduce hospital admissions, hospital readmissions, and emergency room visits; and to a lesser extent, skilled nursing home visits could be expensive. Home care can be equally effective and less expensive. The second part, you want to improve the patient experience. You want to give patients a greater level of satisfaction and increased engagement because those things tend to lead to better health outcomes for patients.”
Having had a really good experience in cutting readmissions rates by 60% for a large hospital in New York, Herzog believes you can really make these things better. Bundled payment programs, fixed procedure costs, post procedure capitated rates and value bases payments, would all work much better, if you get good information from the patient. Under today’s new alternate payment schemes, organizations must achieve better outcomes to get a better level of reimbursement. As an added burden, hospitals are faced with readmission penalties when people come in at a higher than the average rate for something like congestive heart failure. “Without digital health, you are flying blind, where most of the serious events which lead to the greatest costs and the worst outcomes. So I completely agree that all the new alternative pay models goals and objectives of changing healthcare need information from the home. And until now, without eCaring, most of that information has been extremely limited,” maintains Herzog.
eCaring has worked very closely with large healthcare insurance companies in the New York area, many with over a million members, on their managed long-term care plans and Medicare Advantage populations. The collaborative results have been remarkable. A comparative cost analysis study was conducted by a selected health insurance company. The intervention “test” group used the eCaring platform benchmarked against a control group in the same population of dually eligible Medicare and Medicaid recipients. The analysis indicated, on an annualized basis, $6000 per member per year using eCaring, which is about 15% of the total cost of care. “This is a really significant number, and I don’t think anybody else really comes close to that. There are 9 million dual eligibles in the US of Medicare-Medicaid recipients, with the potential impact of bending the cost curve on 3 trillion dollar health care economy in the US. This is a way we can approach care in a meaningful way. There are tens of millions people with multiple chronic conditions in Medicare and Medicaid and some in commercial insurance. And we had good results with this payer, we had good results with health care plans, home health agencies and hospitals in reducing utilization of the hospital and also getting these better outcomes overall with lower expenses for these patients,” Herzog voiced in triumph.
Early in-home interventions with the eCaring digital heath platform have contributed to a 30 % to 40% reduction in hospitals admissions or readmissions. If an eCaring monitored patient is admitted to the hospital the likelihood is great the problem was caught early and mostly likely the event will turn out less severe. Data has shown the average length of stay is more than 50% shorter for hospitalized patients using eCaring than for those without it. Consider the substantial cost savings as well. Hospital visit expenditures for a regular member of the plan are $13,000 whereas, the average cost with is $10,000. Data also show that when eCaring patients leave the hospital they go back less frequently. eCaring can take credit for the key difference because you are getting much better information exchanged from patient and caregiver.
Right now, there isn’t a good way to get comprehensive information post discharge. Questions about whether the patient got their medications and is taking them, had vital signs taken in and out of the home, is adhering to the plan of care, keeps their appointments, plus sleeps, eats or drinks properly. All these things are crucial to understanding the patient’s condition at home and helps prevents them from going back to the hospital. “Through that, we get these great results across the continuum of care. Our motto is to best deal with the healthcare crisis is to avoid it in the first place, ” said Herzog in closing.
Founded on personal experience, eCaring keeps people at home and out of the hospital every day. Mr. Herzog shared with me the decline and eventual demise of his own mother. In the late 1990s, his mother first started getting ill. She had worked until she was 79 years old in a law firm. Upon retirement, she had a few good years, and then some not so good years….
“Those years proved to be very difficult for myself and my family, as she increasingly had needs for home care and healthcare services. And often some of those services contributed to her further need for services. What I learned in that process was that what you don’t know can hurt you. For example, we would turn the house keys from mom’s house over to strangers, very well meaning strangers. In her mid –eighties my Jewish mother learned to eat jerk chicken with one of her homecare workers, but none the less it was a real struggle. There was no good way to get information out of the home. My mother’s first hospitalization occurred because she was hallucinating, which was pretty shocking for everybody. My mother was better at math than I was, a very, very sharp woman. It turned out she was hallucinating because she had a urinary tract infection. She had a UTI because she was dehydrated. She was dehydrated because she wasn’t drinking water. And that was because she was a very proud woman starting to have trouble going to the bathroom on her own and wouldn’t tell anybody. So in our eCaring system, you have the ability to communicate if somebody is not drinking water. And had I had that system in place at the time of my mother’s home care, it would have saved us countless visits in and out of hospitals and rehab, a downward spiral that occurred because of that, tens of thousands of dollars of expenses, and all the burdens and stresses of those kinds of events. Definitely in retrospect, it was very clear to me it was very badly managed system in terms of getting good useful information out of the home in a timely fashion.” – Robert M. Herzog, CEO eCaring
To learn more about Robert M. Herzog and eCaring, please click here to connect the website.