An attributable cost model for a telecare system using advanced community alarms

Area of Science:

• Health Economics
• Technology Assessment
• Public Health

Background:

• Telecare schemes are increasingly adopted to support community-dwelling individuals.
• Existing telecare systems have limitations in terms of capital cost and return on investment.
• Evaluating the financial implications of advanced telecare is crucial for widespread implementation.

Purpose of the Study:

• To develop an attributable cost model for a city-based telecare scheme.
• To assess the financial viability and return on investment of a proposed telecare system.
• To determine the distribution of financial benefits across different healthcare and housing sectors.

Main Methods:

• Development of a cost model for a telecare scheme serving 11,618 community alarm users.
• Estimation of capital costs for new telecare equipment (500-1000 Pounds per installation) versus the current system (175 Pounds).
• Analysis of potential savings from reduced hospital bed costs and residential care.

Main Results:

• The proposed telecare system requires significant capital investment, potentially 2.2 million Pounds if equipment costs 500 Pounds per unit.
• A return on investment is projected within 10 years.
• Financial benefits are distributed as 4% to local authority housing, 43% to the National Health Service, and 53% to residential care providers.

Conclusions:

• The proposed telecare system, despite initial capital costs, offers a viable long-term investment.
• Significant cost savings can be realized through reduced hospitalizations and residential care needs.
• The model highlights the potential for telecare to generate substantial financial benefits across multiple public service sectors.