Is there a business case for telehealth in home health agencies?

Telehealth is a tool being considered by home health agencies (HHAs) to help manage costs. Most HHAs in the United States rely on Medicare reimbursement as their primary revenue source. With the implementation of a new payment system in October 2000, HHAs went from a cost-based, fee-for-service payment to a per episode prospective payment reimbursement model. For HHAs, the revenue goal changed from maximizing the number of visits under feefor- service to maximizing the number of patients and managing the episode within the prospective payment reimbursement formula. This paper addresses whether or not there is a financial business case for telehealth in HHAs. For this research effort, building a business case involved identifying and measuring the factors that contribute to the financial effectiveness of the home health organization. Utilizing a return on investment breakeven analysis model, we investigated the financial impact of telehealth, utilizing data from 32 HHAs in the Commonwealth of Pennsylvania. The breakeven analysis demonstrated that telehealth can have a positive impact on the HHA's financial position. Results indicate that HHAs should seriously consider the use of telehealth as part of their agency's care delivery model.