Costs to Medicare of the IDEATel Home Telemedicine Demonstration: Findings from an Independent Evaluation

Home telemedicine holds promise for cost-effective delivery of monitoring, educational, and therapeutic services to people with chronic illnesses. The authors report that findings from Mathematica's congressionally mandated evaluation of the Informatics for Diabetes Education and Telemedicine (IDEATel) demonstration showed no overall cost savings for Medicare. The demonstration was neither as intensive nor as technologically sophisticated as originally designed. It was clinically effective at only one site and had no cost-reducing effect on the use of expensive services, such as hospital care. Furthermore, the intervention's costs were high—more than $8,000 per person per year—when compared with costs for programs with similar-sized clinical impacts. The demonstration's specific type of home telemedicine intervention was not generalizable to other telemedicine interventions. As a result, findings from the evaluation do not imply that home-based telemedicine cannot increase value for the Medicare program.