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Original Research: Critical Care |

The Costs of Critical Care Telemedicine ProgramsThe Costs of Critical Care Telemedicine Programs: A Systematic Review and Analysis FREE TO VIEW

Gaurav Kumar, MD; Derik M. Falk, MD; Robert S. Bonello, MD; Jeremy M. Kahn, MD; Eli Perencevich, MD; Peter Cram, MD, MBA
Author and Funding Information

From the Division of Pulmonary, Critical Care, and Occupational Health (Drs Kumar and Falk) and the Division of General Internal Medicine (Drs Perencevich and Cram), Department of Internal Medicine, University of Iowa Carver College of Medicine; the Center for Comprehensive Access and Delivery Research and Evaluation (Drs Kumar, Perencevich, and Cram), Iowa City Veterans Affairs Medical Center, Iowa City, IA; the Minneapolis Veterans Affairs Medical Center (Dr Bonello), Minneapolis, MN; and the Program on Critical Care Health Policy and Management (Dr Kahn), Department of Critical Care Medicine, University of Pittsburgh, Pittsburgh, PA.

Correspondence to: Gaurav Kumar, MD, Division of Pulmonary, Critical Care, and Occupational Health, University of Iowa, Carver College of Medicine, C33GH, 200 Hawkins Dr, Iowa City, IA 52242; e-mail: gaurav-kumar@uiowa.edu


For editorial comment see page 7

Funding/Support: Supported by the Veterans Affairs Health Services Research & Development [Grant IIR 09-099] (Dr Perencevich); in-kind research support in the form of data from the Cerner Corp (Kansas City, MO) and the National Institutes of Health career development award [K23HL082650] (Dr Kahn); a K23 career development award [RR01997201] from the National Center for Research Resources at the National Institutes of Health and the Robert Wood Johnson Physician Faculty Scholars Program (Dr Cram); and the Department of Veterans Affairs (Drs Perencevich and Cram). This work is also funded by a VA Merit Award [I01 HX000261].

Reproduction of this article is prohibited without written permission from the American College of Chest Physicians. See online for more details.


Chest. 2013;143(1):19-29. doi:10.1378/chest.11-3031
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Background:  Implementation of telemedicine programs in ICUs (tele-ICUs) may improve patient outcomes, but the costs of these programs are unknown. We performed a systematic literature review to summarize existing data on the costs of tele-ICUs and collected detailed data on the costs of implementing a tele-ICU in a network of Veterans Health Administration (VHA) hospitals.

Methods:  We conducted a systematic review of studies published between January 1, 1990, and July 1, 2011, reporting costs of tele-ICUs. Studies were summarized, and key cost data were abstracted. We then obtained the costs of implementing a tele-ICU in a network of seven VHA hospitals and report these costs in light of the existing literature.

Results:  Our systematic review identified eight studies reporting tele-ICU costs. These studies suggested combined implementation and first year of operation costs for a tele-ICU of $50,000 to $100,000 per monitored ICU-bed. Changes in patient care costs after tele-ICU implementation ranged from a $3,000 reduction to a $5,600 increase in hospital cost per patient. VHA data suggested a cost for implementation and first year of operation of $70,000 to $87,000 per ICU-bed, depending on the depreciation methods applied.

Conclusions:  The cost of tele-ICU implementation is substantial, and the impact of these programs on hospital costs or profits is unclear. Until additional data become available, clinicians and administrators should carefully weigh the clinical and economic aspects of tele-ICUs when considering investing in this technology.

Figures in this Article

ICUs deliver focused care to critically ill patients; but despite advances in ICU care, mortality rates remain high and vary significantly.1,2 There is an increased effort to improve patient outcomes by providing dedicated intensivist staffing in all ICUs and promoting adoption of evidence-based therapies.38 Access to intensivists has been hampered by an array of factors, most notably the limited supply of intensivists, particularly for smaller hospitals and rural geographic regions.911 To improve the quality of critical care and extend the reach of the current intensivist workforce, at least 40 health-care systems in the United States have implemented telemedicine programs in ICUs (tele-ICUs).1215

Tele-ICUs typically combine real-time videoconferencing, telemetry, and electronic health records (EHRs). A tele-ICU allows physician and nurse intensivists located in a centralized monitoring center to monitor and care for patients in multiple distant ICUs.16,17 Although the tele-ICU concept may be similar across facilities, the technology and associated treatment protocols (eg, ventilator protocols, sepsis management, best practice protocols) can vary significantly across sites and programs. Thus, it is not surprising that previous studies have reached conflicting conclusions regarding whether tele-ICUs improve patient outcomes.15,18,19

Although studies evaluating the impact of tele-ICUs on patient outcomes and ICU teamwork have become increasingly available, studies assessing the cost of a tele-ICU have been slow to emerge.20,21 The costs of these programs are nontrivial, because tele-ICUs are typically purchased by the hospital implementing the system, and third-party payers (eg, Medicare, Medicaid, private insurance) do not reimburse for the capital costs or staffing of tele-ICUs.22

With this background, our first objective was to systematically review the existing literature that describes the costs of tele-ICUs. Our second objective was to provide the costs of tele-ICU implementation in a seven-hospital network within the Veterans Health Administration (VHA).

Literature Search

With the assistance of a trained medical librarian, we performed a systematic literature review to identify studies reporting costs associated with tele-ICUs. We searched PubMed, CINAHL, Academic Search Elite, Business Source Complete, ERIC, MasterFILE Premier, Health Source Academic Edition, EMBASE, Web of Science, and ABI/Inform from January 1, 1990, through July 1, 2011, using a Boolean strategy (e-Appendix 1). We also reviewed abstracts from the 2006 to 2010 annual meetings of the American College of Chest Physicians, American Thoracic Society, American Telemedicine Association, Society of Critical Care Medicine, and the American Public Health Association.

Study Selection and Data Abstraction

We identified 845 publications and seven conference abstracts of potential interest (Fig 1). Each source was reviewed by one of the study authors (G. K.) to determine whether the study was potentially eligible and met the following inclusion criteria: (1) involved the implementation of a tele-ICU and (2) provided original cost data associated with a tele-ICU. Since there is no standard definition of tele-ICUs, we considered tele-ICU to be any form of technology that used telemedicine to facilitate communication between remotely located intensivists and distant providers or patients in an ICU. Studies were excluded if (1) the tele-ICU was used to triage patients prior to ICU admission or (2) the publication provided duplicate data.

Figure Jump LinkFigure 1. Telemedicine program in the ICU (tele-ICU) systematic review literature search flow diagram.Grahic Jump Location

Two study authors (G. K. and P. C.) reviewed 49 publications of potential interest in duplicate, and eight studies were ultimately determined to be eligible.2330 Because each study was missing one or more important data elements (e-Appendix 2), we contacted the authors of each study in an effort to obtain additional data; all but two of the authors responded, but none were able to provide additional data.

Data were abstracted independently by at least two authors (G. K., D. M. F., and P. C.) using a data extraction tool (e-Appendix 2). Data elements included issues of study design, ICU and hospital organization, and tele-ICU costs.

Systematic Review Data Synthesis

We stratified the studies using a hierarchy for rating the quality of quasi-experimental studies proposed by Harris et al.31 The nomenclature system provides a grade based on the study design, which can be used to suggest a degree of risk to the internal validity of the study’s results.31,32

We categorized costs reported by each study into either tele-ICU costs or hospital variable costs (Table 1) building on the method of Roberts et al.33 We subdivided tele-ICU costs into technology, staffing, and real-estate costs (Fig 2, Table 1).

Figure Jump LinkFigure 2. Tele-ICU: operational structure. Arrows represent communication pathways (with description of communication) between entities involved in the tele-ICU. Each box represents entities involved in the tele-ICUs (real estate). The technology and staffing required for each entity are described in the boxes. EHR = electronic health record. See Figure 1 legend for expansion of other abbreviation.Grahic Jump Location
Table Graphic Jump Location
Table 1 —Cost Categories for Tele-ICU

Tele-ICU = telemedicine program in the ICU.

Hospital variable costs are defined as the costs of resources used in providing patient care and may fluctuate depending on resource consumption by a given patient. To determine if health-care systems generate a profit or loss, a contribution margin is calculated by subtracting the total patient care costs from the revenue generated.3335

Because tele-ICU vendors take into account the number of monitored beds when pricing these programs, we calculated the tele-ICU costs on a per-ICU bed metric to standardize the data across studies and allow for comparison with the VHA data.

VHA Data

We obtained detailed cost data from VHA for the implementation of a new tele-ICU within a network of seven hospitals. The costs were allocated to the previously mentioned subcategories, calculated for the entire tele-ICU in aggregate, and calculated for each of the participating hospitals individually.

As technology is an important component of tele-ICU costs, it is important to briefly comment on the existing information technology available within VHA. The VHA already has an advanced EHR; however, this EHR does not have the capability of managing continuous critical care data in a Clinical Information System (CIS). To clarify, the EHR allows for documentation and note writing, order entry with decision support, test result data, and demographic administrative data. A CIS manages clinical data such as vital signs, ventilator settings, IV infusion rates, or laboratory data; may provide decision support; and may use clinical alert systems. A CIS does not necessarily include other elements of an EHR. Optimal tele-ICUs include both an EHR and a real-time critical care CIS. The VHA tele-ICU implementation did not require purchase of an EHR as the VHA already had an EHR; however, the tele-ICU implementation did require purchase of a CIS, and these costs are included in our analysis.

We used the projected first-year costs of operating and staffing the tele-ICU monitoring center because the system only became operational in August 2011, and, thus, the actual first-year operational costs are not yet complete. In an effort to provide perspective on how costs may vary when depreciation is factored into the tele-ICU, we applied three recognized depreciation methods. We reviewed Internal Revenue Service guidelines under the Modified Accelerated Cost Recovery System (MACRS) for medical technology and performed depreciation calculation by using both a straight line method and the 200% declining balance method for a total of 5 years of depreciation.36 We applied both Internal Revenue Service methods, along with the sum-of-years’ digits method, with 5-year depreciation and no remainder salvage value. This study was approved by the Iowa City Veterans Affairs (VA) Institutional Review Board.

Literature Review

Our literature review identified eight studies involving 29 ICUs from 26 hospitals that provided tele-ICU cost data (Table 2). All the studies used a quasi-experimental study design; all were of lower methodologic structure suggesting potential risks to internal validity.31,32 Four studies had potential financial conflicts resulting from author ties to tele-ICU vendors.23,25,27,28 Five studies implemented a commercial telemedicine system from a common vendor, but it was not reported if they concurrently implemented the vendor’s CIS.25,2730 None of the studies reported the availability of an EHR. Seven studies involved community hospitals where intensivists were either not available or only served as a consultative role for the primary physician.2430 Finally, only five of the studies using real-time videoconferencing and monitoring equipment were monitoring patients 24 h/d.23,25,2830

Table Graphic Jump Location
Table 2 —Characteristics of Studies

For details on the numbers in the Hierarchy column, see Harris et al.31 A = conference or meeting abstract; CIS = Clinical Information System; EHR = electronic health record; ... = information not provided or unknown; N/A = not applicable for this study, tele-ICU was a consultative email service between physicians. NEHI = New England Healthcare Institute; O = other; P = peer-review journal. See Table 1 legend for expansion of other abbreviation.

a 

Proactive = autonomy of the remote site to direct patient care if the bedside team was unavailable to respond to patient alerts or alarms; reactive = bedside team contacted the remote site for assistance.

Tele-ICU Costs

There was significant variation in the cost data reported by the individual studies (Table 3). Three studies provided data on the technology, staffing, and real estate costs.25,27,28 An unpublished report by the New England Healthcare Institute provided the most detail, reporting the costs of the technology, installation fees, staffing fees, monitoring site operating costs, and monitoring site maintenance costs.28 Based on these studies, the estimated cost to implement the tele-ICU technology combined with the costs of monitoring of the site, operating the site, and staffing the tele-ICU for 1 year ranged from $50,000 to $100,000 per ICU-bed.

Table Graphic Jump Location
Table 3 —Tele-ICU Systematic Review Costs

SAPS = Simplified Acute Physiology Score. See Table 1 and 2 legends for expansion of other abbreviations.

Six studies presented data concerning the impact of tele-ICUs on hospital variable costs (Table 3).2325,2830 After tele-ICU implementation, studies with vendor affiliation reported a cost savings of $2,600 to $3,000 per patient and suggested that tele-ICUs increased hospital profits by $1,000 to $4,000 per patient.23,25,28 Studies without vendor affiliation reported no variable cost savings and suggested increased hospital costs after implementation.29,30 Despite the increase in hospital costs, one study suggested that the additional cost for tele-ICU could be compensated by a reduction in the hospital variable costs with improved patient outcomes when caring for a select patient population.30 Of note, none of the studies indexed cost per bed or per patient, nor was there mention of using depreciation methods.

VHA Costs

In August 2011, the VHA activated a tele-ICU in a network of seven hospitals containing eight separate ICUs and 74 ICU beds. The monitoring site is located in a dedicated space within one of the hospitals that also contains two ICUs using the tele-ICU. The total cost for implementing the program and the estimated first-year operating costs of the monitoring site was $9,097,410; this translated into a cost of $123,000 per ICU-bed (Table 4). The total cost for technology ($5,196,661) included all hardware, software, equipment, networking, and licensing fees. The estimated cost for staffing and operating the monitoring site for the first year was $3,300,000 (27% of total costs); of note, staffing costs are incurred on a recurring basis. Also, there was a one-time technology vendor fee of $1,114,711 to provide ongoing maintenance, support, and licensing fees for a total of 5 years (not included in Table 4); this fee was added to the cost of technology when performing depreciation calculations. Depending on the chosen method of depreciation, the first-year costs for implementation and operation of the VHA tele-ICU were estimated at between $70,000 and $87,000 per ICU bed (Table 5).

Table Graphic Jump Location
Table 4 —VHA Tele-ICU Costs

Data are presented as dollars unless otherwise noted. N/A = not applicable as these components are only in the monitoring center; VHA = Veterans Health Administration. See Tables 1 and 2 legends for expansion of other abbreviations.

a 

Hardware/upgrades: all medical device hardware, monitoring hardware and upgrades to systems needed to implement the program.

b 

CIS software: cost for software, interfacing, and hardware fees for the CIS.

c 

Telemedicine software: cost for the software, interfacing, and hardware fees for the monitoring and telemetry system.

d 

Installation: fixed cost from the vendor for installation of the CIS and telemedicine.

e 

Equipment and network: specific costs for computers, monitors, desks, networking equipment including hubs and wiring, and installation for this equipment.

Table Graphic Jump Location
Table 5 —Technology Cost Depreciation Schedule

Data are presented as dollars unless otherwise noted. Depreciation is performed on the capital costs for technology ($5,196,661) plus one-time fee for maintenance and support ($1,114,711); total of $6,311,372. The annual costs for operating the tele-ICU cannot be depreciated, and are not included in the depreciation schedule. The estimated first y cost total is the y 1 depreciated cost for technology plus all operating ($3,504,197) and real-estate costs ($396,552). See Table 1 legend for expansion of abbreviation.

We conducted a systematic literature review of the costs of tele-ICUs and evaluated the costs of implementing a tele-ICU in a network of VHA hospitals. Although our literature review revealed many shortcomings in the published literature, our review suggests an initial cost of tele-ICU implementation and operation of $50,000 to $100,000 per ICU-bed in the first year. In analysis of detailed VHA data, we found the total cost for implementation combined with the total first-year tele-ICU operation costs to be $123,000 per ICU-bed. When initial investments are depreciated over 5 years, the combined costs for technology and operation in the first year are estimated at $70,000 to $87,000 per ICU-bed. Our results provide much-needed data regarding the resources required for implementation of a tele-ICU.

Several findings merit further comment. First, it is critical to mention the significant variation in how prior studies measured and reported costs. Several studies failed to include details of critical cost components for the tele-ICU.23,24,26,29,30 For example, one-half of the studies did not provide the costs for implementation, technology, or staffing; and other studies failed to include a breakdown of the technology costs. None of the studies considered how tele-ICU coverage hours and interaction protocols might impact staffing costs for the monitoring centers or hospital profits. Although the technology is sold on a per-bed basis, few studies reported tele-ICU costs in a systematic way (eg, cost per patient or cost per bed). Smaller centers may initially consider a tele-ICU to be of high cost, but if a tele-ICU increases patient throughput and volume, a facility may realize a lower cost impact. With the availability of different technology options, interfacility comparisons may be difficult, as one facility may spend more than another to purchase technology. Likewise, few prior studies clearly specified the precise elements included in their cost analysis, including personnel costs, technology costs, and real estate costs. Authors, reviewers, and editors should work in concert to ensure that key cost elements are consistently reported to maximize the value of tele-ICU economic analyses.

Second, for tele-ICUs to be sustainable over the long term, hospital administrators will demand rigorous financial analyses of budgetary impact. Many of the prior studies purport cost savings based on improvements in surrogate outcomes (eg, ICU length of stay, ventilator-associated pneumonia prevention, ventilator days) but fail to provide actual cost data demonstrating true cost savings for tele-ICU.37,38 Tele-ICUs have the potential to be economically viable if (1) they reduce costs or (2) they increase revenue.3335 Long-term viability of tele-ICUs will require more detailed data that these programs are cost effective.39,40

Third, our analysis of VHA data warrants discussion. We found that the costs of tele-ICU implementation combined with 1 year of operation was somewhat higher within VHA when compared with the detailed data obtained from a prior study.28 However, after depreciation of initial investments was performed, costs within VHA appear similar to those provided in prior studies.25,27 It is important to recognize that none of the prior studies mentioned use of deprecation methods. Moreover, the VHA already has an advanced EHR in all VA hospitals. Since the VHA did not purchase an EHR, the VA was not burdened with the complex technology integration issues that other hospitals with assorted computer systems may encounter. Finally, as a large integrated delivery system, the VHA tele-ICU implementation may have benefited from economies of scale that smaller health-care systems might not realize. Taking this into consideration, the costs of tele-ICU implementation within VHA could actually be lower than what would be expected in the private sector.

Our study has a number of limitations that merit mention. First, our systematic review was limited by the quality of the prior studies that have been conducted to date. Although the limitations were significant, our evaluation should provide a framework for future research. Second, our VHA data are limited to the initial implementation and estimated first-year monitoring site operation costs. Third, we could not calculate the cost effectiveness or cost savings of the tele-ICU, as such an analysis would require longer-term estimates of effectiveness (eg, reduction of ICU length of stay, reductions in imaging and laboratory testing, reduction in ICU complications) that are not yet available but will be a focus of our longer-term evaluation. Fourth, our study suggests that the cost effectiveness of a tele-ICU will vary between facilities and will depend on bed use and patient throughput (ie, case volume) and the number of beds over which the costs are depreciated (ie, economies of scale).

In conclusion, our review and analysis suggest an implementation and first-year operational cost of tele-ICUs of approximately $50,000 to $123,000 per monitored ICU-bed. The long-term economic impact of these programs remains unclear. In the meantime, clinicians and administrators should carefully weigh the clinical and economic aspects of tele-ICUs when considering investment in this technology.

Author contributions: Dr Kumar had full access to all the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.

Dr Kumar: contributed to study concept and design; acquisition, analysis, and interpretation of data; and drafting and critical revision of the manuscript for important intellectual content.

Dr Falk: contributed to acquisition of data and drafting of the manuscript.

Dr Bonello: contributed to study concept and design, critical revision of the manuscript for important intellectual content, and administrative support.

Dr Kahn: contributed to study concept and design and critical revision of the manuscript for important intellectual content.

Dr Perencevich: contributed to study concept and design, critical revision of the manuscript for important intellectual content, and administrative support.

Dr Cram: contributed to study concept and design; acquisition, analysis, and interpretation of data; drafting and critical revision of the manuscript for important intellectual content; study supervision; and administrative support.

Financial/nonfinancial disclosures: The authors have reported to CHEST the following conflicts of interest: Dr Kahn receives grant funding from the US National Institutes of Health and has served as a paid consultant to the US Department of Veterans Affairs on issues related to ICU telemedicine. Drs Kumar, Falk, Bonello, Perencevich, and Cram have reported that no potential conflicts of interest exist with any companies/organizations whose products or services may be discussed in this article.

Role of sponsors: The sponsors had no role in the design of the study, collection and analysis of the data, or preparation of the manuscript. The funding bodies of this study played no role in the data analysis or interpretation of results nor in the drafting or editing of this manuscript.

Other contributions: We thank the VHA Decision Support System for accounting and financial assistance; Michael Windschitl, RN, MBA, and the Minneapolis VHA Chief Finance Officer LeAnn Stomberg regarding acquisition of data, analysis of the data, and critical revision of the manuscript for important intellectual content. The views expressed in this article are those of the authors and do not necessarily represent the views of the Department of Veterans Affairs.

Additional information: The e-Appendixes can be found in the “Supplemental Materials” area of the online article.

CIS

Clinical Information System

EHR

electronic health record

tele-ICU

telemedicine program in the ICU

VA

Veterans Affairs

VHA

Veterans Health Administration

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Norman V, Kabani N, Mizell P, Stone D, Griebel J Jr, Tragico E. Effect of a telemedicine facilitated program on ICU length of stay (LOS) and financial performance [abstract]. Crit Care Med. 2009;37(suppl 12):A2.
 
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American Thoracic SocietyAmerican Thoracic Society. Understanding costs and cost-effectiveness in critical care: report from the second American Thoracic Society workshop on outcomes research. Am J Respir Crit Care Med. 2002;165(4):540-550. [PubMed]
 

Figures

Figure Jump LinkFigure 1. Telemedicine program in the ICU (tele-ICU) systematic review literature search flow diagram.Grahic Jump Location
Figure Jump LinkFigure 2. Tele-ICU: operational structure. Arrows represent communication pathways (with description of communication) between entities involved in the tele-ICU. Each box represents entities involved in the tele-ICUs (real estate). The technology and staffing required for each entity are described in the boxes. EHR = electronic health record. See Figure 1 legend for expansion of other abbreviation.Grahic Jump Location

Tables

Table Graphic Jump Location
Table 1 —Cost Categories for Tele-ICU

Tele-ICU = telemedicine program in the ICU.

Table Graphic Jump Location
Table 2 —Characteristics of Studies

For details on the numbers in the Hierarchy column, see Harris et al.31 A = conference or meeting abstract; CIS = Clinical Information System; EHR = electronic health record; ... = information not provided or unknown; N/A = not applicable for this study, tele-ICU was a consultative email service between physicians. NEHI = New England Healthcare Institute; O = other; P = peer-review journal. See Table 1 legend for expansion of other abbreviation.

a 

Proactive = autonomy of the remote site to direct patient care if the bedside team was unavailable to respond to patient alerts or alarms; reactive = bedside team contacted the remote site for assistance.

Table Graphic Jump Location
Table 3 —Tele-ICU Systematic Review Costs

SAPS = Simplified Acute Physiology Score. See Table 1 and 2 legends for expansion of other abbreviations.

Table Graphic Jump Location
Table 4 —VHA Tele-ICU Costs

Data are presented as dollars unless otherwise noted. N/A = not applicable as these components are only in the monitoring center; VHA = Veterans Health Administration. See Tables 1 and 2 legends for expansion of other abbreviations.

a 

Hardware/upgrades: all medical device hardware, monitoring hardware and upgrades to systems needed to implement the program.

b 

CIS software: cost for software, interfacing, and hardware fees for the CIS.

c 

Telemedicine software: cost for the software, interfacing, and hardware fees for the monitoring and telemetry system.

d 

Installation: fixed cost from the vendor for installation of the CIS and telemedicine.

e 

Equipment and network: specific costs for computers, monitors, desks, networking equipment including hubs and wiring, and installation for this equipment.

Table Graphic Jump Location
Table 5 —Technology Cost Depreciation Schedule

Data are presented as dollars unless otherwise noted. Depreciation is performed on the capital costs for technology ($5,196,661) plus one-time fee for maintenance and support ($1,114,711); total of $6,311,372. The annual costs for operating the tele-ICU cannot be depreciated, and are not included in the depreciation schedule. The estimated first y cost total is the y 1 depreciated cost for technology plus all operating ($3,504,197) and real-estate costs ($396,552). See Table 1 legend for expansion of abbreviation.

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