Monitoring Tech Could Boost Per-SNF Revenues by $3.6 Million
The average post-acute care (PAC) facility in the U.S. could increase its profits by 13% and its revenue by 22% by installing contact-free continuous monitoring (CFCM) in just some of its existing beds, according to a white paper from consulting firm Frost & Sullivan (F&S)
The Israel-based medical device company EarlySense, which provides contact-free and continuous health monitoring products, commissioned the report. The white paper was the second of two F&S reports commissioned by EarlySense; the first focused on the use of CFCM technology in hospitals.
The potential revenue boost equates to an increase of about $3.6 million per facility. But if the technology was applied in a similar way across all U.S. PAC facilities, the industry as a whole could see a revenue bump of about $40 billion, F&S estimated.
Expenses also might increase, however. Before CFCM, expenses at such a facility were estimated at $10.57 million; after CFCM, they were estimated at $12.69 million, a 20.1% change, the report said. Still, the facility’s net profit would also go up significantly after the technology was installed. For the 106-bed facility, net profit before CFCM was estimated at $1.31 million. After installation, the net profit grew to $1.8 million.
The cost ran about $5 per patient day for the service, according to the report; this figure was provided by EarlySense, F&S analyst and report author Charlie Whelan told Skilled Nursing News.
CFCM technology transmits real-time data on movement level, heart rate, and respiratory rate that are captured from the patient’s bed. Care staff then receives instant alerts when any values deviate from pre-set parameters.
PAC facilities that implement the technology see reduced rehospitalization rates, F&S said, and this could prove significant as SNFs and other PAC providers try to differentiate themselves to snag provider partnerships.
More Complex Patients
Hospitals often bypass SNFs and discharge people straight home — particularly the low-acuity patients who don’t need special care, such as ventilation or dialysis, Whelan said. And though this means a general drop in the number of Americans going into PAC settings, the complexity of care in these settings will increase amid this trend.
These patients generally come with greater reimbursement rates, Whelan explained, which in turn leads to the projected revenue increase.
“This transition could be expected to add $7.66 billion in profits to the post-acute industry which could be used, in part, the [sic] make investments in staff, infrastructure and technology,” the report said.
As PAC providers work to improve their quality standards to obtain higher reimbursements under the Skilled Nursing Facility Value-Based Purchasing (SNFVBP) program, CFCM could be a crucial tool, the report said.
“After putting CFCM in place, we saw a 31% reduction in readmissions,” Marsha Moor, former coordinator of teletechnologies at Brooks Rehabilitation, a 150-bed SNF in Jacksonville, Fla., said in the report. “In patients with [urinary tract infection], there was an early indication of them going septic, so you could put process improvement in place.”
Beginning in fiscal 2019, skilled nursing operators stand to lose 2% of their Medicare reimbursements under the SNFVPB program should they not meet certain readmission goals. The technology’s ability to reduce readmission rates could put SNFs that use it in the top quartile of the SNFVBP program, the report argued, which would let them earn back the 2% Medicare case rate reduction under the new rules.
For such facilities, revenue would be 21% higher than a same-sized facility — with the same patient payor mix — that did not adopt CFCM.
Written by Maggie Flynn