eHealth reimbursement models – How?

updated Nov 23, 2015                                                           Svensk version

This is part 2 of 2 in a series of articles about the need for new ways to pay for eHealth.

Since eHealth is a new tool for healthcare and self care, with many different varieties and possible uses, we need to develop different models for reimbursement that enable eHealth services to be widely used.

Real reimbursement for eHealth use is better than grant funding

Research and development grants are of course very important for the long-term development, but in eHealth there is now a big need for faster ways to introduce services that can be used on a larger scale. The technology of today is better and more cost-efficient than ever, there is now a widely spread infrastructure with internet, smartphones and tablets and we already know how to build useful services. So now is the time to start reaping the benefit from this integration!

There is a need for a market that enables the creation of useful eHealth-services that are based on concrete needs and can be used in health care and by citizens and patients today. The pre-requisite for this is that both the health services and the eHealth suppliers can get reimbursement.

Reimbursement based on actual usage and created value is a better driving force for achieving this than project development grants!

Proposal that stimulates development and healthcare adoption

1. Update the existing reimbursement models now

Start by adding eHealth services to the existing reimbursement models. For example, the reimbursement for a patient visit to a doctor or nurse should be reimbursed with the same amount if it is done via internet.

2. Create an independent fund for development of new reimbursement models for the health care system

There is a need for new forms of reimbursement models for those eHealth-services that support new ways of providing healthcare, self-care, rehabilitation etc.

A public fund is needed for this, a fund that invites suppliers of eHealth services, both from within the national health service and from external organisations, to apply for pilot projects with 1-2 years of reimbursement that is paid to the healthcare providers for their use of these services.

A suitable reimbursement model is determined for those services that are considered to create real health benefits. Prioritize applications that can be used with a minimum of integration with other IT systems during the pilot period, in order to get started quickly. Usability and concrete benefit for patients and/or healthcare professionals must be the primary requirements!

These services shall be used within the care being provided today by the existing healthcare providers on local and regional levels.

Support the health services, not the suppliers

The core concept of this proposal is that the economical support from the fund is not transferred directly to the supplier of the service, but to the health clinics that are using the service. Also, the reimbursement is based on the actual usage and/or the measured value of the service.

The health clinic receives support from the fund aimed at covering the direct costs of the service and compensating for the loss of traditional reimbursement for patient visits etc. This will entice the health clinics to start using eHealth services.

The supplier of the service must then first have it developed and then sell it to the health clinics in order to get their share of the reimbursement for the service from the health clinics during the pilot period.

The money flows during the pilot period from the fund -> healthcare -> suppliers. This puts healthcare in the driver’s seat and the suppliers get “real money” for their services.

This will build up very valuable real-life experience from large-scale use on how the eHealth services work for patients and healthcare professionals, what work flows need to be updated and what reimbursement models work best for different types of eHealth services.

It also makes it easier for the eHealth suppliers to invest in innovation and development, since they can do revenue calculations just like in other business sectors.

Marketing and follow up

eHealth services are currently not widely known by most people, so it is important to promote these services to healthcare providers as well as to the general public and various patient groups.

A major advantage of eHealth services is that it is much easier to gather continuous feedback from the usage of the eHealth services, their effects on health status, and how they are perceived by both patients and healthcare professionals, and the economical results.

A retrospective deep analysis is performed after the pilot period, extracting valuable insights that can be used for recommendations on how to proceed and update the reimbursement models.

Dare to take risks

All eHealth services may not work as well as intended when they are deployed on a larger scale. Some reimbursement models may lead to abuse or not providing predicted cost savings.

By using my proposed implementation model, this can be done within the limited budget of the fund and give valuable experiences from field use by the patients and the health services. These experiences also create a very good basis for the ongoing investigations of eHealth reimbursement models.

Define the value chain

In order to be able to develop working reimbursement models it is important to start by defining the complete value chain.
Where in the value chain does the eHealth service create value?

The value chain may for example consist of:
Patient  – Primary care – Specialist care – Institutional care – Home care – Geriatric care – Research

Stakeholders that need reimbursement

Different types of eHealth services require different reimbursements to the care organisations and the eHealth suppliers.

Health clinics: The care organisations that are using the service with their patients, such as a primary care centre, specialist clinic, physiotherapist or psychologist.

eHealth suppliers: The organisations that are operating and managing the services, sometimes they are also also the developers of the eHealth services.

Types of reimbursement models

Have a discussion with different types of stakeholders from the value chain about reimbursement models that may be suitable for different types of eHealth services.

Here it is important to think  “outside the box” and create models that really utilize the new digital capabilities in the best possible way and are not only digital ways to deliver health care in the traditional way.

Examples of eHealth applications

  1. Patients text-chatting with a doctor or nurse using their smartphones.
  2. Patients having online video consultations with their primary care doctor, getting advice and prescriptions.
  3. Nurses at specialist clinics using online video consultations for routine followups of the patients, instead of requiring them to visit.
  4. Primary care doctors taking pictures and logging data into a smartphone application for remote evaluation by a specialist.
  5. Patients with chronic diseases, such as heart failure or COPD, using a smartphone or tablet with connected medical sensors for daily monitoring of their health parameters, getting insights in how their lifestyle choices affect their health, getting automatic alerts when there is a negative trend in their condition with an option to have to have video consultation with a nurse or doctor.
  6. Patients with depression using a smartphone app for cognitive behavioural therapy.
  7. Services and apps where the patients are supporting each other in their self-care.

Examples of reimbursement models

To health clinics:

  1. Reimbursement per use of an internal service, or reimbursement per user per month
  2. Reimbursement per online patient consultation
  3. Reimbursement for providing monitoring and support using an eHealth application, on a per patient per month basis

To suppliers:

  1. A fixed fee for starting up eHealth services at a clinic or in the home of a patient
  2. Reimbursement per support intervention, online consultation, or home visit
  3. Reimbursement per month for operation and support of an eHealth service

For those eHealth services that are provided to the patients by a clinic, all of the reimbursement should go to the clinic. The clinic buys the eHealth service from the supplier and pays the supplier according to the models described.

A split model can also be considered, where the reimbursement is split between the clinic and the supplier.

When the suppliers are paid based on actual use of their eHealth services, it spurs them to make sure that the services are widely used and work optimally for both the clinic and the patients.

Additional things to investigate

  1. Map out the current options for reimbursement of eHealth services in various types of healthcare organisations, and a summary of all the ongoing studies about eHealth reimbursement models, both nationally and internationally.
  2. How can models be applied where the clinic receives the full reimbursement for the use of the service and buys the operation and management of it from the supplier?
  3. Are there types of eHealth services where some forms of patient fees could be a part of the reimbursement?
  4. How would a system work that gives the patient an “allowance” that the patient can spend on any eHealth application? Would it lead to a beneficial direct market between the patient and competing eHealth services?
  5. How can preventative health care services be reimbursed?
  6. How can abuse be prevented? A common objection against eHealth services is that they can be abused or lead to overconsumption of health care services.

eHealth is spreading globally

There is a rapidly growing interest and need for eHealth reimbursement models. National health services and the eHealth developers and suppliers would benefit if these models can be standardized whenever possible.

But what is eHealth? Why new reimbursement models? Read part 1

Part 1 in this series of articles explains the problems with current models and why there is a need for new reimbursement models for new types of eHealth services.

See also my article What is eHealth?, with a list of examples.

Feedback and comments are welcome!

– Henrik Ahlen, 
eHealth Advisor & Production Manager

Published by

Henrik Ahlén

I am an eHealth Strategist at Sopra Steria Sweden in Stockholm. I drive eHealth development projects from needs analysis and idea generation to service design and implementation. See my LinkedIn profile: http://www.linkedin.com/in/mrhenrikahlen

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