Tele-psychiatry program saves money on care

Clearwater Valley Hospital’s nearly two-year-old tele-psychiatry program has managed to cut down the yearly health care costs for its patients by more than half, but those savings might not save the initiative from the chopping block.

Started with the help of grant funding, the program allows patients living in rural Idaho to see psychiatrists based in Boise using specialized video conferencing equipment rather than relying on primary care doctors or driving hundreds of miles for an appointment.

It has been remarkably successful in getting more patients care, improving outcomes and lowering overall healthcare costs per patient, according to data kept by Clearwater.

Yet the nature of how health care is funded means that despite saving about $3,000 a year per patient, the hospital loses somewhere between $30,000 and $40,000 a year to operate the program, said Kelly McGrath, Clearwater’s chief medical officer.

The hospital losses come from a multitude of problems, the biggest being that many insurance companies don’t cover tele-psychiatry in their plans, as it is an unproven treatment method, McGrath said. Psychiatric patients can further the burden, as the population has a high no-show rate, and transportation costs can add up in the hospital’s desolate service area.

With grant funding scheduled to run out in September, the hospital is looking at how to keep the benefits and lower its own costs.

“We’ve shown that the economics of this from an insurance point of view are that we are lowering health care costs elsewhere just by giving them adequate psychiatric care,” he said. “It’s almost like we’re ahead of our time.”

Hospitals purchase four-hour blocks of time from Saint Alphonsus Health Systems, which provides psychiatrists during that time to the rural hospitals. Saint Mary’s Hospital in Cottonwood and Cascade Medical Center in Cascade also use tele-psychiatry through Saint Alphonsus. Hospitals are responsible for lining up patients during those blocks and often must absorb the cost of having the psychiatrist available if patients don’t show.

Rural Idaho has few psychiatrists, so patients at Clearwater and other hospitals often have to drive 200 miles or more round-trip to visit one, McGrath said. Lewiston has some available, but its psychiatry resources are stretched due to high demand from surrounding communities, he said.

Idaho has consistently been among the lowest tier of states in its mental health services. It ranked last in the nation in 2010 for mental health spending for capita, according to the National Association of State Mental Health Program Directors Research Institute. It has also repeatedly ranked poorly in suicide rates and availability of psychiatrists, McGrath said.

The National Alliance on Mental Illness, in its most recent 2010 statistics, estimates Idaho had 54,000 adults and 18,000 children with “serious” mental disorders.

“We’re at the bottom of the heap” for psychiatric care in the U.S., McGrath said.

Peter McGarry, PacificSource Health Insurance vice president of provider networks, said many insurers aren’t willing to pay the costs of a telemedicine program because it is unproven or because the insurers believe it has little medical value. Medicaid does cover the program, but many private insurers are hesitant.

PacificSource, which gave the grant to Clearwater, does insure for tele-psychiatry and was curious what the results would be for a small, rural hospital where PacificSource has few patients, McGarry said. It was a particularly good experimental environment, because Clearwater has no competitors and can easily monitor all the medical costs of a patient in its service area.

McGarry said the results were “pretty startling.”

McGrath reports that among the adult population using the program, the average cost per patient annually dropped from $5,103 per year to $2,073 per year. The average emergency room visits by the same patients dropped from five per year to 1.2 per year. The non-psychiatric hospital visits per patient dropped from 4.3 per year to two.

“I would say this grant, more than just about any other, hits all three levels of the triple aim,” McGarry said, referring to the health care goal of improving an overall population’s health and the individual patient experience, all while cutting costs.

McGarry said that while the grant to Clearwater has been successful, the rules of the grant program only allow funding to one project for two years.

Saint Alphonsus has kept track of more data with its participating hospitals, reporting more savings for patients. It estimates it has saved patients in the program about $500,000 over three years, using 50 cents per mile as the baseline for travel costs.

McGrath said the savings go further, but they become much harder to track. He noted that psychiatric patients with treatment live more stable lives, are less likely to end up abusing substances and are less likely to end up in jail.

“There is the direct care cost, but there are other costs in that a lot of these people tend to be disabled and have the loss of income and loss of revenues that (eventually) go to the state,” McGrath said.

To keep the program running, McGrath estimates Clearwater will have to cut the total cost to the hospital every year to between $10,000 and $20,000.

The hospital is looking at booking more patients, including for the first time people with chronically high depression scores, as opposed to only those with more severe mental illness, to better fill out the four-hour blocks it purchases from Saint Alphonsus, he said. Officials also hope the results of the initial two years of the program will convince more insurance companies to pay for tele-psychiatry treatment.

“We would really prefer to be able to have this service to stand alone,” McGrath said, but acknowledged that was unlikely short term. “If we can get close to breaking even, I’m confident the hospital will subsidize (it), because it is the right thing to do. But there are a lot of other programs that are also the right thing to do.”