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Service costs and benefits

The implementation and operation of integrated eCare services causes costs: investments for hard- and software, time taken to adapt care delivery processes, to train service staff, to deliver the service and others. Costs not only concern the service provider, but also other stakeholders involved, such as reimbursement bodies, service users and their relations.

On the other side of the equation integrated eCare services deliver numerous different benefits, e.g. in terms of more efficient service delivery, reduced social and health care use, avoided hospital admissions and better quality of service, ultimately leading to better care delivered to older people.

Only when the costs and benefits to the different stakeholders with a role in a service are duly balanced, a service will be able to operate continuously and sustainably over an extended period of time. In other words: the business model must be right.

To achieve this goal for INDEPENDENT, services undergo - among other things - a rigorous cost-benefit analysis. The results will be more than a snapshot of the individual services mainstreamed in the course of the project. They will be a resource for stakeholders interested in engaging in integrated eCare delivery, to help better understanding service concepts, to provide reliable data and ultimately to support decision making.

The approach - business case modelling

A business case modelling approach is used to support the creation of viable business models in INDEPENDENT. Business case modelling is in this context understood as an analytic process following different stages in the deployment cycle of a service, from requirements analysis to service implementation. The main purpose is to inform the deployment cycle as far as requirements from the business side are concerned and to ensure that these requirements are met to the greatest possible extent. This includes the analysis of service costs and benefits to different actors, the consideration of financing means and the re-modelling of the service concept to ensure economic viability.

For a full description of the approach used in INDEPENDENT, see [Meyer, I., S. Müller, et al. 2011].

In methodological regard the approach is built around a cost-benefit analysis (CBA) that was chosen over alternative approaches (such as cost-effectiveness analysis and cost-utility analysis) because it allows to adopt a multi-stakeholder perspective, i.e. costs and benefits can be analysed separately for different actors. This is of particular advantage in the fragmented environment met with in integrated care service provision, where many different actors (from patients and informal carers to service providers, the IT industry and others) are involved, whose costs and benefits need to be balanced individually to achieve a viable and sustainable service model.

The approach is supported by a software tool for cost-benefit analysis developed by project partner empirica for the European Space Agency (ESA), called ASSIST – Assessment and evaluation tools for Telemedicine. The ASSIST tool was originally developed for cost-benefit analysis in the context of telemedicine but was adapted for use in integrated eCare projects in the course of the CommonWell project and is now being applied in INDEPENDENT.

Further reading

Meyer, I., S. Müller, et al. (2011). AAL markets – knowing them, reaching them. Evidence from European research. Handbook of Ambient Assisted Living. Technology for Healthcare, Rehabilitation and Well-being. J. C. Augusto, M. Huch, A. Kameaset al, IOS Press. 11.