Does telecare reduce medical expenditure for heart failure patients?

This paper examines the effect of tele-home-care on medical expenditure for heart failure patients using survey data from Nishi-aizu Town, Fukushima Prefecture, Japan, (2002-2006). In town´s telecare system, users at home transmit vital data such as ECG, blood pressure, and pulse to the town´s health center via the peripheral device, and nurses monitor the data. This study focuses on heart failure which is the second popular chronic disease next to high blood pressure in the town. Medical expenditures of the following groups are compared: the treatment group consists of 199 selected from 523 telecare users according to years of use, while 209 nonusers (control) were selected from 3,525 residents, and their medical expenditures obtained from the National Health Insurance scheme were used a dependent variable in estimation. Individual characteristics of the two groups, including age, sex, income, and health conditions, were obtained from replies to the questionnaire and receipts of the National Health Insurance and used for explanatory variables. Heart failure patients were identified by their record of related diseases having treated. We use system GMM, a rigorous estimation method aimed to solve the causality problem. This analysis demonstrates that tele-home-care use itself, duration of, and frequency of telecare use reduce the medical expenditures of heart failure patients.