Cost savings from a telemedicine model of care in northern Queensland, Australia

Patients with cancer who live in rural and remote areas of Australia and other countries with large rural populations travel long distances to major centres to receive specialist care.1,2 Some of these patients require overnight accommodation for themselves and their escorts. In Australia, all or part of the travel costs and part of the accommodation costs are usually borne by jurisdictional governments.3 Telemedicine has the potential to provide specialist consultations to patients in their home towns and minimise the need for distant travel, although evidence for the relative costs and benefits of telemedicine is mixed.4-7

Townsville Cancer Centre (TCC) provides tertiary cancer care to people living in northern Queensland, Australia. As people living in this area must travel long distances to receive cancer care, the Medical Oncology department at TCC embarked on a teleoncology model of care for its rural satellite sites in 2007.8 Questionnaire-based satisfaction surveys carried out in 2009 found this model was acceptable to patients and health professionals.9

The Townsville teleoncology model involves videoconference sessions in which medical oncologists consult with patients who may be supported during the videoconferences by local health care professionals. Referrals to the teleoncology service are managed by a coordinator at TCC. The need for local health care professionals to be present during videoconferences is determined by the complexity of the cases. This means that, in some cases, patients attend videoconferences alone. Consultations may involve review of new cases, follow-up of existing cases or urgent review for acutely ill patients, usually within 24 hours of request. New cases usually take up to 30–40 minutes and reviews take about 10–20 minutes.

We aimed to conduct a cost–savings analysis of the teleoncology model of care at the TCC compared with the usual care model. This analysis was performed from the perspective of savings to the Townsville and other participating hospital and health services.

Demographic details of patients managed by means of teleoncology between 1 March 2007 and 30 November 2011 were collected from the oncology database of the TCC. Data collected included age, sex, ethnicity, type of consultation and diagnosis.

There were 605 consultations with 147 patients between TCC and six satellite centres from 1 March 2007 to 30 November 2011. The remoteness of the centres, and distribution of patients and consultations per centre are shown in Box 2. Ninety-two per cent of all consultations were with patients in Mt Isa and Proserpine. Patients were about equally distributed by sex, with 69 men (47%) and 78 women (53%), and 24 (16%) were Indigenous. A wide variety of cancer types were seen, with breast cancer being the most common (31%), followed by lung cancer (18%), gastrointestinal cancers (8%), genitourinary cancers (7%), melanoma (8%) and other cancers (16%). There were 54 consultations in the first year of the project (2007–2008). This number increased to 129 in 2008–2009, 136 in 2009–2010, and 286 in 2010–2011. The number of new patients enrolled increased each year (25 in 2007–2008; 31 in 2008–2009; 37 in 2009–2010; and 54 in 2010–2011).

Over the period of the study, four patients from Mt Isa required urgent consultations, which were performed either on the day of or within 24 hours of referral. Before the teleoncology clinics began, these patients would have required transfer to TCC. There have been no interhospital transfers from Mt Isa since the teleoncology clinics began. Details of savings realised are shown in Box 3.

Our analysis showed that total cost of the teleoncology project in the first year was $115 825, while savings were $59 195. In the second year, there were only running costs of $45 457 while, as a result of an increased number of consultations, the savings were $157 929. In the third year (2009–2010), four new centres were started, and the total cost of the establishment and running of the centres was $221 302 against savings of $164 795. In 2010–2011, the cost of running the existing centres was $59 692, while savings amounted to $380 475 as a result of a significant increase in the number of consultations. Overall, the total cost of the teleoncology project over 56 months was $442 276, while the estimated expense avoided was $762 394; this represents a net saving of $320 118.

The break-even point (the point at which costs equal savings) varied depending on distance, patient numbers and the complexity of cases managed. For example, in Mt Isa, the establishment and running costs in the first 12 months were $75 926. At a travel cost of $1000 for a patient and escort, excluding overnight accommodation, savings were generated after 76 consultations. This means that smaller towns and towns closer to the major centres with low patient numbers will take longer to generate savings, or may not generate savings at all. Overall, under the TCC teleoncology model, initial costs were negated after 105 consultations at Mt Isa.

The TCC model of cancer care is one example of the use of telemedicine to facilitate the provision of specialist cancer services to rural patients. It reduces travel for patients and doctors, reduces interhospital transfers and provides access to ongoing medical education for staff working in remote areas by improving access to specialist oncologists.12 However there are drawbacks such as possible depersonalisation, excessive dependence on technology and increased clinical risk (eg, supervision and management of side effects of chemotherapy remotely), although early safety analysis results from our model show promising results.13,14

Evidence for cost-effectiveness of telemedicine services in comparison with conventional face-to-face consultations is mixed. A 2012 systematic review concluded that there was no conclusive evidence that telemedicine and telecare interventions were cost-effective compared with conventional health care over 20 years.4 However, the studies in this systematic review varied in their methods of cost analysis, patient travel distances, number of patients served, types of specialties involved and extent of services provided, making it difficult to arrive at firm conclusions.

Studies in Kansas in the United States reported that the telemedicine cost for cancer care was lower than the face-to-face clinic cost and that the cost of telemedicine clinics had declined over the years due to increase in patient numbers.6,15 Similarly, a study from Queensland, Australia, reported savings from paediatric telemedicine clinics.7 In contrast, a US cost analysis reported no cost benefit for a telemedicine model that provided various specialty services to eight rural centres in Arizona; this was attributed to low patient numbers.5

Like the previous studies from Kansas6 and Queensland,7 our study shows significant savings to the health system. We found that small changes in cost were unlikely to affect the outcome because there were large net savings. Therefore, a simple one-way sensitivity analysis was adequate for the purpose our study. The major contributor to cost savings was avoiding travel by patients and their escorts and specialist oncologists. In comparison with other studies, the models in the earlier Kansas6 and Queensland7 studies and in our study served patients from very long distances and in larger numbers.

In our model, in Mt Isa, all the medical oncology services were able to be provided locally by telehealth, which avoided interhospital transfers and led to further cost savings. However, our findings may not be generalisable to models with smaller patient numbers and with patients travelling smaller distances. Since July 2011, more than 80% of our consultations have been eligible for a Medicare rebate by the Australian government. While we did not include this in our cost analysis, these rebates would provide further financial benefit to the hospital and health services from the telehealth model.

At TCC, the number of consultations doubled every year. Mt Isa and Proserpine had large increases in the number of consultations as these centres also provided increasingly complex chemotherapy treatments over time. Other centres, where such large growth did not occur, may not generate savings because of smaller patient numbers. For these centres, the decision to continue the service should be based on equity of access and social justice, not on economic grounds. At smaller rural centres, sharing of the system by more than one specialty will be likely to improve the savings further.

In conclusion, the Townsville teleoncology model saves money for participating health service districts while providing cancer care to rural northern Queensland closer to patients’ homes. The main driver of net savings is avoidance of travel costs for patients and their escorts and for specialists. Ideally, net savings should be redirected to further improving rural infrastructure and capabilities.