An article in the September issue of policy journal Health Affairs looked at a CMS demonstration project involving care coordination with Robert Bosch Healthcare's Health Buddy telehealth appliance. Researchers from Stanford University and economic consulting firm Analysis Group found that the Health Buddy system helped trim spending by 7.7 percent to 13.3 percent, or $312-$542 per person each quarter, on Medicare patients with various chronic diseases at two multispecialty clinics in the Pacific Northwest.

"These results suggest that carefully designed and implemented care management and telehealth programs can help reduce healthcare spending and that such programs merit continued attention by Medicare," they write.

Not surprisingly, Dr. Jasper zu Putlitz, president of Palo Alto, Calif.-based Robert Bosch Healthcare, the global telehealth business of German industrial conglomerate Bosch, is thrilled. "This study is a real breakthrough," he tells MobiHealthNews. "It's one of the few CMS demonstration projects that actually showed impact."

The researchers, led by Laurence C. Baker, chief of health services research at Stanford, also found evidence of better outcomes in the form of lower mortality rates, but suggested that more study is needed. Their analysis relied on claims data and did not account for the cost of the technology, but they are optimistic that they were on to something big.

So is zu Putlitz, who took the top job at Bosch Healthcare at the beginning of 2011. "The very idea that Health Buddy can save lives is very intriguing to me," he says.

With this study now out there, the next step, according to zu Putlitz, is convincing healthcare payers, purchasers and providers that this kind of telehealth technology is worthy of the investment, particularly for Medicare enrollees.

Zu Putlitz says it's somewhat unrealistic to expect commercial insurers to cover the up-front cost of monitoring technology such as Health Buddy since members switch plans so often. The same goes for employers, because companies downsize and people do change jobs. "That’s less of an issue for Medicare," the Bosch Healthcare boss notes. He also says a similar opportunity exists in European markets, where healthcare is largely government-funded.

He is particularly excited about the new Center for Medicare and Medicaid Innovation, created by the 2010 Patient Protection and Affordable Care Act. The same health reform law gives CMS the power and some money to expand successful pilot programs without waiting for further congressional authorization. "We give them a little bit of what I call a luxury problem," zu Putlitz says of the results of the study, which involved Medicare patients at Wenatchee Valley Medical Center in Wenatchee, Wash., and the Bend Memorial Clinic in Bend, Ore.

He adds that Bosch is prepared to ramp up telehealth programs in a hurry, should the demand arise. "Bosch has a lot of experience with large telehealth deployments," zu Putlitz says. The company has done larger-scale rollouts with CMS in the Bronx, N.Y., and with the Department of Veterans Affairs. "We can do it. We are ready," according to zu Putlitz.

Health Buddy, which Bosch acquired when it purchased entrepreneur Steve Brown's Health Hero Network in 2007, is one of two telehealth systems Bosch currently markets. The other is ViTelCare T400, a home monitor for more acute and intensive cases, that Bosch picked up in a 2009 acquisition. The company is marketing the latter more to hospitals as a way to monitor recently discharged patients, particularly since Medicare next month will stop paying for certain preventable readmissions within 30 days of hospital discharge.

"ViTelCare is a little more immediate," zu Putlitz says. It provides continuous monitoring and allows for faster interventions in case of a problem, whereas Health Buddy is intended for once-daily home use. "Hospitals really appreciate the opportunity to have an intense exchange of information

With both systems, the key to success in combating chronic illness is combining technology with proper care management and patient education to encourage lifestyle changes, zu Putlitz notes. "Vital-sign monitoring will only take you so far," he says.

With this in mind, zu Putlitz says Bosch Healthcare is testing peripheral devices and health management programs that incorporate predictive analytics for "smart" management of clinical populations. (Bosch is 93 percent owned by a charitable foundation that operates Robert Bosch Hospital in Stuttgart, Germany, which effectively gives the healthcare division its own, real-world laboratory, zu Putlitz says.)

In the next year or two, Bosch Healthcare will introduce some advanced sensors to advance care management, zu Putlitz promises. "You will see much smarter medical logic for managing patients and patient populations," he says.