Making the business case for telemedicine: an interactive spreadsheet

Telemedicine Journal and E-health : the Official Journal of the American Telemedicine Association
Michael J McCue, Susan E Palsbo

Abstract

The objective of this study was to demonstrate the business case for telemedicine in nonrural areas. We developed an interactive spreadsheet to conduct multiple financial analyses under different capital investment, revenue, and expense scenarios. We applied the spreadsheet to the specific case of poststroke rehabilitation in urban settings. The setting involved outpatient clinics associated with a freestanding rehabilitation hospital in Oklahoma. Our baseline scenario used historical financial data from face-to-face encounters as the baseline for payer and volume mix. We assumed a cost of capital of 10% to finance the project. The outcome measures were financial breakeven points and internal rate of return. A total of 340 telemedicine visits will generate a positive net cash flow each year. The project is expected to recoup the initial investment by the fourth year, produce a positive present value dollar return of more than $2,000, and earn rate of return of 20%, which exceeds the hospital's cost of capital. The business case is demonstrated for this scenario. Urban telemedicine programs can be financially self-sustaining without accounting for reductions in travel time by providers or patients. Urban telemedicine programs ca...Continue Reading

References

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Citations

Oct 6, 2010·Current Neurology and Neuroscience Reports·Bart M Demaerschalk
Dec 21, 2007·Telemedicine Journal and E-health : the Official Journal of the American Telemedicine Association·Takashi Hasegawa, Sumio Murase
Jun 24, 2008·Telemedicine Journal and E-health : the Official Journal of the American Telemedicine Association·Shamima KhanCharles D Peterson
Nov 3, 2010·Telemedicine Journal and E-health : the Official Journal of the American Telemedicine Association·Bambang ParmantoDavid M Brienza
Nov 11, 2014·Telemedicine Journal and E-health : the Official Journal of the American Telemedicine Association·Charles R Doarn, Ronald C Merrell
Oct 25, 2011·Journal of Stroke and Cerebrovascular Diseases : the Official Journal of National Stroke Association·Eric R AndersonMichael Frankel
Apr 3, 2019·International Journal of Environmental Research and Public Health·Bocong Yuan, Jiannan Li
Jul 1, 2015·Pediatrics·UNKNOWN COMMITTEE ON PEDIATRIC WORKFORCEWilliam B Moskowitz

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