preserving sight for those accessing follow-up care is more than sufficient to offset the relatively small costs of screening people who will not access the necessary treatment. The benefit still exceeds the cost of a screen by a factor of 30, so even with more than 70% of the benefit lost to lack of follow-up care, it is still very much in the interest of the state to support a screening program.

It is also important to address problems with access to treatment. The unrealized benefit associated with the lack of follow-up care can be estimated by comparing the estimated net benefit of the screening program with 100% access to follow-up care with the estimated net benefit when less than 30% actually access needed fol- low-up care. If 100% of all referred patients were able to access the follow-up care necessary to preserve their vision and arrest retinopathy, the per-screen benefit to the state would increase by over $2,000 as more of the benefit was realized. For screens completed to date, this works out to nearly $103 million that will need to be spent by the state over the lifetime of the patients who were screened through EADRSI, but who were not able to access necessary follow-up care. Any action that increases access to specialty care for these safety-net patients is likely to have a strong return to the state (Table 15.3).

The methodology behind the Newman study was purposely, and appropriately, conservative. While patients were referred to specialists for pathologies other than diabetic retinopathy, benefits considered in the study were limited to those achieved through addressing and treating diabetic retinopathies. Providers related anecdotes of

patientswhosediabeticself-managementimproved following screening, but the resulting savings are difficult to measure and were not included in the study. Savings to the state were limited to avoided costs associated with Medi-Cal, SSP, IHSS, CAPI, and blindness rehabilitation provided through the Department of Rehabilitation. The study did not include savings to other levels of government or to programs providing paratransit services, library services, guide dogs, or nursing home care. It did not consider benefits to individuals (preserved vision, earning power, and quality of life), benefits to the general economy (preserved productivity and taxes paid), or personal medical costs avoided.

Even without considering these additional savings, using a conservative methodology – and with less than a third of referred patients accessing follow-up care – screening for diabetic retinopathy in the safety-net population provides a strong return to the state.

15.5State Support of Screening in the Safety Net

Safety-net providers receive support from the government in the form of fee-for-service or managed-care reimbursements from Medi-Cal (California’s Medicaid program) and Medicare, other funding programs, and grants. County and city programs provide additional funding. Safetynet clinics receive additional funds from private foundations, charitable donations, sliding scale fees paid by patients, and payments from private insurers.

Fig. 15.1 Medical coverage for EADRSI patients

Reimbursements for store-and-forward telemedicine have been gradually increasing in California. Beginning in 2005, the California legislature authorized Medi-Cal reimbursements for teleophthalmology by store and forward. In 2009, the legislature expanded the definition of teleophthalmology to include screens read by optometrists and provided funds for reimbursements beginning in November 2010. Reimbursements for telemedicine screening are available through some managed Medi-Cal plans, and the Public-Private Partnership of Los Angeles County added screening through the EyePACS network to its list of reimbursable services during the program’s introduction.

Clinic screening behavior has been influenced by reimbursement policy. Many providers regularly refer patients with Medi-Cal coverage to traditional eye exams for which reimbursement is available, leaving screening through EADRSI dominated by patients without insurance. Patients with Medi-Cal coverage have been greatly underrepresented in EADRSI screening: they comprise just over 5% of all screens, but over 30% of the patients served at participating clinics (Fig. 15.1).

from CHCF during the term of EADRSI, the network provided fundus cameras to screening sites unable to provide their own cameras, trained photographers at each capture site, and provided ongoing technical support. As grant funding ended in early 2011, the network was expected to be self-supporting and sustainable.

The economics of the screening network can be assessed through cost-volume-profit analysis. From the perspective of the network, the $5 per case fee paid by the network to the consulting reader represents a variable cost, while the $15 fee paid by the originating safety-net provider to the network more than covers the cost of the reader, and leaves a contribution to covering the network’s fixed costs. The network incurs fixed costs associated with the provision of training and technical support, maintenance of infrastructure, and general administration. Revenues in excess of costs go into a fund to cover fundus camera depreciation and purchase new cameras to expand screening opportunities to more safetynet patients.

Telemedicine programs are generally capital intensive. The largest fixed cost incurred by the network is depreciation, although the lack of cash flow associated with this cost makes it easy to overlook in the short run. While some providers purchased their own fundus cameras, most receive the use of a camera for agreeing to use the network’s readers. Improvements in technology are resulting in lower replacement costs but are also decreasing the useful life of cameras as newer models have greater resolution and ease of use. One estimate holds that the contribution of 300 screens per year is necessary to cover the depreciation on one camera.

There is flexibility in setting the level of fixed costs based on the priorities of network management, as the network can provide varying levels of technical support, process and quality moni-

Network

The EyePACS screening network was coordinated by UC Berkeley and ultimately connected 60 screening sites with 55 certified readers for more than 53,000 screens. With financial support

tion. Expectations around the useful life and replacement cost of fundus cameras and plans for expansion can be adjusted as network priorities change and technology evolves. Estimates of the fixed costs of running a screening network declined substantially over the course of the

Fig. 15.2 Network cost per screen effect of increasing screening volume

EADRSI, with UC Berkeley estimating that just over 12,000 cases per year would cover administrative fixed costs.

Like most telemedicine applications, the EyePACS network enjoys economies of scale, so an increased volume of screens will result in decreased average cost of a screen. This can be illustrated by combining an estimate of the network’s fixed costs with an estimated depreciation allowance and the fee paid to readers for each case. This yields a relationship showing the decline of the network’s average costs with increases in screening volume. For example, a network producing 1,000 screens per year would have to charge more than $260 per screen to break even, but this could fall to less than $14 at a screening volume of 30,000 screens per year. This is shown in Fig. 15.2 below.

15.7Screening Economics for Providers

Economic analysis from the perspective of providers participating in the screening program centers on the costs they incur in delivering this service. Prior to this screening program, most providers had been referring patients to external eye specialists for diabetic eye exams and had not been incurring direct screening costs. For the purpose of analysis, these costs can be divided into three categories based on cost behavior:

•Variable costs of screening: The cost for one additional screen includes staff time for data entry, image capture, and any patient education delivered during the screening session. Read fees paid to external consultants should be included here as well. A detailed time study conducted with experienced photographers found that the screening process averaged just over 21 min of staff time from setting up the camera and greeting the patient through uploading the case and securing the equipment. The combination of read fees ($15 per case) and photographer time valued at the average for medical assistants ($7 per case) results in a lower-bound estimate of $22 per case for an efficient screening operation that does not include patient education, pupil dilation, or an allowance for missed appointments (Fig. 15.3).

•Normal administrative overhead costs: Screening sites also have to maintain an organizational environment that supports screening, with overhead costs including the administrative time necessary for scheduling of staff, recruitment and appointment setting for patients, quality control and oversight, and management of information flows. Administrative costs and activities vary widely between providers, with no standard approach to administration having emerged among screening sites. At a minimum, providers reported that these activities absorbed 10% FTE, with up to 25% FTE reported by

Data Entry,

3.1

Uploading, 7.3

Image Capture,

7.7

Fig. 15.3 Screening tasks by time spent time noted in minutes

some providers. Combining the minimum time estimate with the mean hourly wage for Medical and Health Services Managers yields an estimate of just under $13,000 per year for administrative overhead. Additional time was often spent addressing emerging issues around completing referrals to specialists, getting patients into repeat screens, or coordinating with broader disease management efforts.

first year of the program. There do appear to be economies of scale, so increasing screening volume would decrease the average cost per screen.

There was limited reimbursement to cover these costs, but provider noted other benefits from the program. Several providers reported that there was a greater organizational emphasis on diabetic care, often extending to other specialty care. Patients themselves were more motivated to manage their diabetes once they were able to see lesions in their own retinas. Many providers also reported a more positive opinion of telemedicine in general. At many sites, medical assistants were excited to be involved in the program, and morale was elevated. One provider reported that it was easier to provide screens internally than it had been to ensure that patients made and kept appointments for conventional diabetic eye exams.

15.8Patient Sensitivity to Fees

Patients represent one source of resources to sustain a screening program, but charging co-payments for services is likely to reduce patient acceptance of screening. Most patients screened through EADRSI (66%) were uninsured, and little to no reimbursement was available to help providers cover screening costs. Many providers passed

ing implementation and through the early screening period. Again, these activities varied widely between providers and could include training and staffing, site preparation, recruitment of specialists, and development of protocols for screening activities from patient recruitment through referral management. Typically, implementation activities were reported to have lasted 2–4 months, with estimates suggesting that administrative time requirements were doubled during this period. Pulling these together, an efficient clinic that

screened 1,000 patients annually, incurred 10% FTE in normal annual administrative costs, and invested 20% FTE for 3 months of start-up activities would have invested nearly $42,000 in the

did represent a barrier to access, and some patients were reported to refuse the screen when asked to pay. When a screening fee was in place, these fees ranged from $10 to $25, with fees waived when necessary.

It was possible to estimate patient sensitivity to these fees for this population. The extent of the effect of these fees on patient demand for screens was estimated by using data from two sites that used intermittent external grant funding to cover screening costs, with co-payments required when no grant funding was available. In each case, the provider was able to deliver screens at no charge to patients for several months, charged a $15 fee for 9 months when the grant lapsed, and then waived the fees again when grant funding