Is There a Business Case for Telehealth in Home Health Agencies?
Since most home health agencies (HHAs) in the United States rely on Medicare reimbursement as their primary revenue source, this paper addresses the basis for a financial business case for telehealth in (HHAs) to help manage costs. 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 fee-for-service to maximizing the number of patients and managing the episode within the prospective payment reimbursement formula. 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.