Banner Health achieves 27 percent cost savings through joint pilot telehealth program with Philips

May 4, 2015

45 percent reduction in hospitalizations of chronically ill patients drives savings within first six months of program participation


Andover, MA – Working together to address the shift toward value-based care and increased penalties for readmissions, Royal Philips (NYSE: PHG, AEX: PHIA) and Arizona-based Banner Health today announced the successful results of their at-home telehealth pilot program for patients with multiple chronic conditions. The Intensive Ambulatory Care (IAC) pilot program, part of the overall telehealth program at Banner, focuses on the most complex and highest cost patients – the top five percent of patients who account for 50 percent of health care spend. The IAC program, first launched in 2013, aims to improve patient outcomes, care team efficiency, and prevent IAC patients from entering the acute care environment, where costs are significantly higher.


As part of the pilot, Philips and Banner assessed the results of 135 patients[1] to determine the effectiveness of the IAC program in meeting its clinical and financial goals. An analysis of the results of each patient’s first six months demonstrated that the program:


  • Reduced costs of care by 27 percent. This cost savings was driven primarily by a reduction in hospitalization rates and days in the hospital, as well as a reduction in professional service and outpatient costs.


  • Reduced acute and long term care costs by 32 percent. This cost reduction was primarily due to a significant decrease in hospitalizations.  


  • Reduced hospitalizations by 45 percent. Prior to enrollment in the IAC program, there were 11.5 hospitalizations per 100 patients per month; after enrollment, the acute and long-term hospitalization rate dropped to 6.3 hospitalizations per 100 patients per month.
    • Acute short term hospital stays decreased from 7.7 hospitalizations per 100 patients per month to 4.9.
    • Long term care, home health or other facility stays decreased from 3.9 hospitalizations per 100 patients per month to 1.4.
    • Average number of days in the hospital per 100 patients per month also trended down from 90.2 to 65.8.


“The results of our at-home telehealth pilot with Philips have been dramatic and are indicative of the exponential success such a program could have by engaging patients in their own care and building a strong support system around them,” said Dr. Hargobind Khurana, senior medical director of Health Management, Banner. “As we continue to expand this program, we anticipate seeing further proof that telehealth programs can address readmissions rates, reduce costs, and improve the health and quality of life for patients with multiple chronic diseases.”


Banner recently enrolled its 500th patient into the IAC program in which intensivist PCPs, nurses and a broader care team collect and analyze objective and subjective health data to identify early stages of deterioration and prevent adverse events. By providing patients with near-instant access to caregivers – including social workers, pharmacists, and health coaches – Banner has delivered patient-centered care and improved patient satisfaction.


“Telehealth is opening up choices for patients and providers, giving them the freedom to transform how, when and where proactive care is delivered to patients,” said Derek Smith, senior vice president, Hospital to Home, Philips. “By focusing on those patients who generate the greatest health care spend, we’re able to help these individuals get better care in the comfort of their own homes, while also helping health systems achieve the financial reductions they need.”


For more information on the full suite of Philips clinical telehealth programs, visit  


[1] This number represents the patients enrolled in the IAC program who had data available beginning one year prior to entering the IAC program, and 6 months of data after entering the program.

For further information, please contact:

Kathy O’Reilly

Philips Group Communications

(o) 978-659-2638 (m) 978-221-8919

Twitter: @kathyoreilly



About Royal Philips:

Royal Philips (NYSE: PHG, AEX: PHIA) is a diversified health and well-being company, focused on improving people's lives through meaningful innovation in the areas of Healthcare, Consumer Lifestyle and Lighting. Headquartered in the Netherlands, Philips posted 2014 sales of EUR 21.4 billion and employs approximately 108,000 employees with sales and services in more than 100 countries. The company is a leader in cardiac care, acute care and home healthcare, energy efficient lighting solutions and new lighting applications, as well as male shaving and grooming and oral healthcare. News from Philips is located at


About Banner Health:

Headquartered in Arizona, Banner Health is one of the largest nonprofit health care systems in the country. The system owns and operates 28 acute-care hospitals, Banner Health Network, Banner – University Medicine, Banner Medical Group, long-term care centers, outpatient surgery centers and an array of other services, including family clinics, home care and hospice services, pharmacies and a nursing registry. Banner Health is in seven states: Alaska, Arizona, California, Colorado, Nebraska, Nevada and Wyoming. For more information, visit




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