NR 552 Week 4 Cost-Effectiveness Comparison Example

Cost-Effectiveness Comparison: Nurse Home Visits, Telemonitoring and Usual Care After Heart Failure Discharge, Divided by One Denominator, Readmissions Avoided per 100 Patients at 30 Days

Student Name

College of Nursing, Chamberlain University

NR 552: Economics of Healthcare Policy

Instructor Name

Month Day, Year

Cost-Effectiveness Comparison: Nurse Home Visits, Telemonitoring and Usual Care After Heart Failure Discharge, Divided by One Denominator, Readmissions Avoided per 100 Patients at 30 Days

The Denominator, Chosen Once

The outcome unit for this comparison is readmissions within 30 days avoided per 100 patients enrolled. It was chosen for three reasons: readmission is the outcome both programs aim at, 30 days matches the window used by the federal readmission penalty and the programs' own length, and both programs have estimates of their effect on this measure. A quality-adjusted life year would be preferable for comparing across unrelated programs, as national recommendations on cost-effectiveness analysis note (Sanders et al., 2016), but neither program has credible estimates of its effect on quality of life beyond a few weeks. Using readmissions avoided keeps the comparison within what the evidence supports, at the cost of not capturing effects on survival or quality of life.

The Comparator

Both programs are compared with usual care, which is a real option with real costs. Usual care in our hospital means discharge teaching by the bedside nurse, a follow-up appointment within 14 days and home health only when the patient meets standard criteria. Among heart failure patients sent home under usual care, 22% return within 30 days, based on the past two years. Usual care has no added program cost, but it carries the cost of those readmissions.

The Two Programs

Nurse home visits. One registered nurse visit within 72 hours plus four weekly calls, costed from the hospital's perspective at $451.50 per patient at 480 patients a year, including fixed costs spread across enrollment. For effect, this comparison assumes a 25% relative reduction in 30-day readmissions, from 22% to 16.5%. That assumption is more conservative than the effect seen in a randomized trial of a more intensive advanced practice nurse-led transitional care program, which also reported lower total costs over a year (Naylor et al., 2004), because our program is shorter and less intensive.

Telemonitoring. Daily weight, blood pressure and symptom reporting through a tablet and a connected scale, with nurse review of alerts, for 30 days. The vendor's price is $520 per patient for equipment, connectivity and platform, plus nurse review time of about 1.7 hours per patient at $58 an hour, or about $100, giving $620 per patient. Evidence for telemonitoring in heart failure is mixed, and this comparison assumes a 10% relative reduction, from 22% to 19.8%.

Costs on One Horizon

Both programs are costed over the same 30 days and the same categories: program staff time, equipment, software and fixed overhead. Excluded for both: physician visits, which occur equally under all options; medications; and patient time. Readmission costs are counted separately as offsets, using the payer's average cost of a heart failure readmission in our region, $14,500. Using the payer's figure rather than the hospital's is a deliberate choice for this comparison, because the question is which program gives the most readmission reduction for the money spent, regardless of who captures the savings.

The Arithmetic

Table 1 sets out the comparison per 100 patients enrolled.

Costs and readmissions avoided per 100 patients, 30-day horizon

Table 1

Reading the Results

Nurse home visits avoid 5.5 readmissions per 100 patients at a program cost of $45,150, or about $8,209 per readmission avoided. Because each avoided readmission is worth about $14,500 to the payer, the program more than pays for itself: net savings of about $34,600 per 100 patients. Telemonitoring avoids 2.2 readmissions per 100 patients at $62,000, or about $28,182 per readmission avoided, which is more than the readmission costs, leaving a net cost of $30,100 per 100 patients.

Nurse home visits therefore dominate telemonitoring on these assumptions: they cost less and avoid more readmissions. Compared with usual care, nurse home visits are cost saving from the payer's perspective.

What the Comparison Cannot Tell Us

The comparison ranks the programs on readmissions avoided per dollar, but several considerations lie outside it. It does not capture patient preference; some patients would rather have a tablet than a visitor in their home, and others the reverse. It does not capture equity: telemonitoring requires connectivity and some comfort with technology, which may exclude older patients and those in rural parts of our service area, while home visits reach everyone who can be found at home. It does not capture capacity: the nurse home visit program needs about one additional nurse to avoid displacing orthopedic care, while telemonitoring needs less nurse time. And it does not capture effects beyond 30 days or on outcomes other than readmission.

These considerations do not overturn the ranking, but they should be stated alongside it. A decision maker who reads only the table might conclude that telemonitoring has no place; a more careful reading is that it may suit some patients better, and could be offered as an alternative for those who decline visits.

Sensitivity

The result depends heavily on the assumed effects. If nurse home visits reduced readmissions by only 12% rather than 25%, they would avoid 2.64 readmissions per 100 at a cost of about $17,102 each, above the readmission cost, and the program would no longer save money, though it would still outperform telemonitoring at its assumed effect. If telemonitoring achieved a 20% reduction, it would avoid 4.4 per 100 at about $14,091 each, close to breaking even. The comparison is also sensitive to the readmission cost: at $10,000 per readmission, nurse home visits would still save money, but by a smaller margin.

The 30-day horizon is a limitation. Transitional care may delay rather than prevent some readmissions, and a 90-day horizon could show smaller or larger differences. A randomized trial followed patients for a year and found fewer readmissions and lower costs in the intervention group at 52 weeks (Naylor et al., 2004), which suggests the benefit need not vanish after 30 days, but our program is less intensive. Standard methods texts recommend matching the horizon to the duration of effects (Drummond et al., 2015).

A pilot that records readmissions and costs for our own patients would replace the assumed effects with measured ones, and the comparison should be rerun once a year of data is available.

References

Drummond, M. F., Sculpher, M. J., Claxton, K., Stoddart, G. L., & Torrance, G. W. (2015). Methods for the economic evaluation of health care programmes (4th ed.). Oxford University Press.

Naylor, M. D., Brooten, D. A., Campbell, R. L., Maislin, G., McCauley, K. M., & Schwartz, J. S. (2004). Transitional care of older adults hospitalized with heart failure: A randomized, controlled trial. Journal of the American Geriatrics Society, 52(5), 675-684. https://doi.org/10.1111/j.1532-5415.2004.52202.x

Sanders, G. D., Neumann, P. J., Basu, A., Brock, D. W., Feeny, D., Krahn, M., Kuntz, K. M., Meltzer, D. O., Owens, D. K., Prosser, L. A., Salomon, J. A., Sculpher, M. J., Trikalinos, T. A., Russell, L. B., Siegel, J. E., & Ganiats, T. G. (2016). Recommendations for conduct, methodological practices, and reporting of cost-effectiveness analyses: Second Panel on Cost-Effectiveness in Health and Medicine. JAMA, 316(10), 1093-1103. https://doi.org/10.1001/jama.2016.12195