Abstract
BackgroundAdvances such as passive monitoring technology (PMT), which provides holistic supervision of chronically ill and elderly patients, enable and support improved monitoring and observation, thus empowering the growing population of older adults to live more independently while lowering health care expenses.AimsThis study develops a conceptual model to estimate the potential savings associated with PMT.MethodsWe first develop a conceptual model to identify the main cost variables associated with independent living, focusing on three pathways: (1) PMT, (2) independent living supported by the current standard of care, and (3) facility-based care. We examined the impact on three outcomes [i.e., health care costs, institutional costs, and health-related quality of life (HRQoL)] along each of the three care pathways (i.e., PMT, independent living supported by the standard of care, and facility-based care) and developed a cost-benefit model to calculate the net costs and benefits associated with each care pathway.ResultsThe cost–benefit model showed savings between approximately $425 per-member per-month (PMPM) for those using PMT compared to those on the standard of care pathway. Sensitivity analysis demonstrated that a 5% increase in nursing home utilization generates cost savings of more than 30% PMPM.DiscussionThe total projected cost savings for individuals on the PMT arm are projected to be more than $425 PMPM, with annual savings of $5069 per-person per-year, and over $5.1 million for a target population of 1000 individuals.ConclusionsThe cost calculations in our cost–benefit simulation model clearly demonstrate the value of PMT and show the potential value to payers and integrated delivery systems in offering PMT to individuals who are likely to benefit the most from the services.
Highlights
By 2050, the global population of persons over the age of 60 is expected to be between 1.5 and 2 billion [1, 2]
We describe the economic value framework used to identify the main cost savings pathways and cost variables associated with independent living supported by passive monitoring technology (PMT) versus two alternatives: independent living supported by the “standard of care” (“SOC”) and facility-based care
The cost–benefit model results were expressed as the total “cost savings” of a healthcare-associated event for each intervention arm: PMT, the current standard of care, or institutional care
Summary
By 2050, the global population of persons over the age of 60 is expected to be between 1.5 and 2 billion [1, 2]. Technology-integrated homes and passive monitoring technology (PMT) provide complete supervision of chronically ill and elderly patients using information and communication technology tools in a comfortable environment These technologies enable and support improved monitoring and observation, which in turn improve the efficiency and timing of patient access to the healthcare delivery system, and enable seniors to live more independently with a sense of security and reduce the feelings of loneliness and isolation as society advances [6]. Advances such as passive monitoring technology (PMT), which provides holistic supervision of chronically ill and elderly patients, enable and support improved monitoring and observation, empowering the growing population of older adults to live more independently while lowering health care expenses. A study of 5000 older adults, for example, found that the diagnostic criteria for frailty syndrome were met by 7% of people over 65 years of age and 30% of those aged 80 years or older [12]
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