A ROI Model for Post-Acute and Contact-Free Continuous Monitoring

calendar icon Posted on November 13, 2018

In addition to documented success improving patient care and outcomes, the financial advantages of implementing contact-free continuous monitoring (CFCM) are numerous.

According to a new white paper from Frost & Sullivan, the average post-acute facility could increase revenue by 22% and profit by 13% by installing this technology into just a fraction of its existing beds. Doing so would enable that facility to treat a higher ratio of medically complex patients. Because these patients have higher reimbursement rates when treated in-facility, leveraging CFCM to treat them could increase a typical facility’s total profit “by approximately half a million dollars,” the authors write, a number “equivalent to a revenue increase of approximately $3.6 million per facility.”

Contact-free continuous monitoring can also help post-acute facilities:

  • Reduce penalties from hospital readmissions
  • Raise care standards to secure higher reimbursement under the Skilled Nursing Facility Value Based Purchasing (SNFVBP) program
  • Update practices to be in line with new clinical standards from the Centers for Medicare & Medicaid Services (CMS)


These financial advantages come at a time of heightened competitiveness in the post-acute market, with many facilities operating on razor-thin margins. Penalties for hospital readmissions are increasing, and the onset of the CMS’ bundled payments initiatives is expected to put post-acute facilities under even more pressure to demonstrate an ability to show value and save costs.

READ: Why Post-Acute Success Depends on Accepting High-Acuity Patients (and  How to Do It)

Calculating ROI from Continuous Monitoring for Post-Acute Facilities

To put these cost savings into concrete terms, the white paper authors have created a model for calculating the return on investment (ROI) a “typical” post-acute facility can expect to see from deploying contact-free continuous monitoring, based on “the most reliable industry statistics” from sources like the CMS, the U.S. Government Accountability Office (GAO), the Kaiser Family Foundation and the New England Journal of Medicine (NEJM).

They found that, by deploying CFCM to 21 medically complex patient beds, a 106-bed post-acute facility could expect to see:

  • 22% revenue increase
  • 12.8% net profit margin growth
  • 20% decrease in readmissions

 

A ROI Model for Post-Acute and Contact-Free Continuous Monitoring


Download White Paper: Technology as a Competitive Edge for Post-Acute

To arrive at this ROI model, the authors assume an increase of 20% to the hypothetical facility’s complex patient census, pointing out that medically complex patients are estimated to bill at a rate 63% higher than non-complex patients, over a longer period (the length of stay could increase by as much as 75%).

They also acknowledge that the facility’s expenses would increase by 20%, primarily due to the higher costs associated with more medically complex patients (and not from the costs of the CFCM solution itself). The total number of patients would decrease, but occupancy rates and average daily payment across all patients would increase.

Although they’ve “historically pursued high-profit, low-risk patients,” the authors conclude, post-acute providers “can no longer afford to be selective about their mix of patients. They need to work aggressively to admit every possible patient while managing the risks associated with higher acuity patients.” And continuous monitoring is proving to be a powerful tool for doing just that.

Learn How Post-Acute Can Increase Revenue by 22%

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