Health Economics Analysis of for the Legit.Health Medical Device

Executive Summary

The Legit.Health medical device delivers quantifiable value through clearly delineated, mutually exclusive benefit categories of clinical and healthcare economics outcomes. This analysis identifies six distinct categories of value generation:

1. Direct Cost Savings: operational savings that directly reduce healthcare expenditure
2. System Capacity Enhancement: efficiency gains that increase healthcare system throughput
3. Clinical Quality Improvement: enhancements in diagnostic accuracy and treatment outcomes
4. Early Detection Value: prevention and early intervention benefits
5. Patient-Direct Benefits: value captured directly by patients through improved access and convenience
6. Risk Mitigation: reduction of clinical and operational risks

We present two pricing models, one that includes all six categories (Comprehensive Model) and another that excludes Patient-Direct Benefits and Risk Mitigation (Conservative Model):

• Conservative Model: yielding a value of $107.33$ EUR per patient annually. This model excludes Patient-Direct Benefits and Risk Mitigation.

$$\begin{aligned} \text{Conservative} &= \text{Direct Savings} + \text{Capacity} + \text{Quality} + \text{Early Detection} \\ &= 45.31 + 25.19 + 19.85 + 31.74 = 107.33\text{ EUR} \end{aligned}$$

The total annual value generated per patient is calculated under two models:

• Comprehensive Model: yielding a value of $146.43$ EUR per patient annually, includes all six categories:

$$\begin{aligned} \text{Comprehensive} &= \text{Direct Savings} + \text{Capacity} + \text{Quality} + \text{Early Detection } \boxed{ + \text{ Patient} + \text{Risk}} \\ &= 45.31 + 25.19 + 19.85 + 31.74 + 15.38 + 4.95 = 146.43\text{ EUR} \\ \end{aligned}$$

The following table shows a breakdown including the sub-components of each category, with value for both models:

Category	Sub-Component	Value (EUR)	Comprehensive	Conservative
Direct Savings
	Referral Optimization	12.43	✓	✓
	Documentation Efficiency	11.65	✓	✓
	Remote Care Cost Savings	5.45	✓	✓
	Avoided Second Opinions	7.32	✓	✓
	Objective Severity Assessment	8.45	✓	✓
	Subtotal	45.31	✓	✓
Capacity Enhancement
	Consultation Throughput Increase	14.28	✓	✓
	Waiting List Reduction	10.91	✓	✓
	Subtotal	25.19	✓	✓
Clinical Improvement
	Diagnostic Error Reduction	19.85	✓	✓
	Subtotal	19.85	✓	✓
Early Detection
	Melanoma Stage Migration	15.89	✓	✓
	Non-melanoma Skin Cancer	8.95	✓	✓
	Chronic Condition Management	6.90	✓	✓
	Subtotal	31.74	✓	✓
Patient Benefits
	Reduced Travel Costs	6.82	✓	✗
	Lost Productivity Recovery	5.31	✓	✗
	Treatment Adherence Improvement	3.25	✓	✗
	Subtotal	15.38	✓	✗
Risk Mitigation
	Medico-legal Protection	4.95	✓	✗
	Subtotal	4.95	✓	✗
Grand Total		146.43	146.43	107.33

Our pricing recommendation captures 30% of generated value, **offering a ROI of **233%** for organisations using Legit.Health, consistent with healthcare technology industry standards:

The comprehensive model, at a price of 43.93 EUR per patient per year:

$$\begin{aligned} \text{Target Price} &= 146.43 \times 0.30 = 43.93 \text{ EUR/patient/year} \\ \text{ROI} &= \frac{146.43 - 43.93}{43.93} \times 100\% = 233\% \end{aligned}$$

The conservative model, at a price of 32.20 EUR per patient per year:

$$\begin{aligned} \text{Target Price} &= 107.33 \times 0.30 = 32.20 \text{ EUR/patient/year} \\ \text{ROI} &= \frac{107.33 - 32.20}{32.20} \times 100\% = 233\% \end{aligned}$$

The analysis employs rigorous economic methodology to ensure each benefit is counted exactly once, creating a defensible value proposition for healthcare system stakeholders.

Methodology

The methodology follows established health economics principles to identify, quantify, and monetize distinct value streams generated by the Legit.Health medical device. In this sections, we outline key methodological considerations, strengths, and limitations.

Limitations

While this analysis employs rigorous methodology and conservative assumptions, several limitations should be acknowledged when interpreting these value estimates.

Only applicable to Spanish Healthcare System

The analysis is calibrated to Spanish healthcare system costs, workflows, and epidemiological patterns. Key parameters include:

• Cost Structure: Spanish consultation fees (€37-74), specialist referral costs, and treatment expenditures may differ significantly in other European countries or healthcare systems with different reimbursement models
• Epidemiology: Skin disease prevalence rates (2.5% psoriasis, 1.8% BCC annual incidence) reflect Spanish population data and may vary in regions with different sun exposure patterns, demographic composition, or genetic predisposition
• Healthcare Delivery: Baseline efficiency metrics (8-minute documentation time, 95-day waiting lists) are specific to the Spanish context and may not reflect conditions in better-resourced or more constrained healthcare systems

Learning curve and Adoption Dynamics

The analysis assumes steady-state operation and does not fully account for temporal dynamics:

• Learning Curve: Initial adoption may yield lower efficiency gains until users achieve proficiency, delaying full value realization by 3-6 months
• Technology Evolution: The model assumes current device performance levels. Future AI improvements could increase value, while competitive technologies could erode it
• Healthcare System Adaptation: Some benefits (e.g., capacity enhancement) assume the system redirects freed capacity to additional patients. If freed resources are not productively redeployed, capacity value may not materialize
• Discount Rate: The analysis presents annual per-patient value without applying multi-year discount rates for long-term benefits like melanoma stage migration

Implication for Adoption: Short-term ROI may be lower than modeled due to adoption curves, but sustained use should approach or exceed projected values as proficiency increases.

Excluded Value Streams

To maintain analytical rigor and avoid speculative claims, several potential value streams are excluded:

• Quality-Adjusted Life Years (QALYs): We do not monetize the patient quality-of-life improvements from reduced disease burden, faster treatment, or improved outcomes, which could add substantial value in health economic frameworks
• Indirect Productivity: Beyond patient travel time savings, we exclude broader societal productivity gains from reduced absenteeism, disability, and caregiver burden
• Research and Training Value: The device generates standardized clinical data that could support research, quality improvement, and medical education, but these benefits are not quantified
• Competitive Differentiation: Healthcare systems may gain reputational or competitive advantages by offering advanced diagnostic technology, but these intangible benefits resist quantification

The value stated represents a conservative floor. Comprehensive health economic analyses incorporating QALYs and societal perspective could justify substantially higher valuations.

Strenghts

Mutually Exclusive Categories

Each benefit is assigned to exactly one category, preventing double-counting. For example, improved diagnostic accuracy (72% to 86%) generates multiple downstream effects: reduced second opinions, fewer diagnostic errors, and improved treatment decisions. Rather than counting these as separate benefits, we carefully allocate each effect to a single category—second opinion savings go to Direct Cost Savings, while the diagnostic quality improvement itself is captured in Clinical Quality Improvement. This rigorous categorization ensures that no value stream is counted twice, creating a defensible and conservative value proposition.

Conservative Assumptions

Attribution factors and efficiency rates use validated lower bounds from our clinical validation studies. When research indicates a range of outcomes (e.g., 44-53% remote resolution rate), we use the midpoint (48.5%) rather than the upper bound. Device attribution factors (e.g., 0.62, 0.76) account for the reality that the device is one contributor among many to improved outcomes, ensuring we claim only the proportion of benefit reasonably attributable to our technology rather than the entire system improvement.

Evidence-Based Values

All calculations derive from clinical validation studies conducted according to regulatory standards and published healthcare economics data from authoritative sources. Every claim is traceable to specific performance claims (D62, DCH, DZC, etc.) from our clinical validation portfolio or to peer-reviewed literature and official healthcare cost databases. This grounding in empirical evidence distinguishes our analysis from theoretical projections and enables independent verification by healthcare procurement committees.

Tiered Pricing Model

The comprehensive and conservative models offer flexibility for different stakeholder requirements and risk tolerances. Healthcare systems prioritizing system-level benefits can adopt the conservative model (€107.33 value, €29-36 pricing), while those recognizing patient experience and risk mitigation can justify the comprehensive model (€146.43 value, €40-48 pricing). This dual-model approach accommodates varying organizational priorities and procurement frameworks while maintaining analytical rigor across both scenarios.

Transparent Methodology

Clear documentation of assumptions and calculations enables stakeholder validation. Each value component shows its calculation formula, source data, and attribution logic. Procurement committees can independently verify our mathematics, challenge specific assumptions, and adjust parameters based on their local context (e.g., different consultation costs, wage rates, or patient volumes). This transparency builds trust and facilitates informed decision-making rather than requiring acceptance of black-box valuations.

Value Breakdown

Direct Cost Savings

Operational savings that directly reduce healthcare expenditure

Referral Optimization

The device reduces inappropriate specialist referrals through improved primary care decision-making, consolidating the benefits of enhanced triage accuracy and primary care empowerment into a single value stream:

$$\begin{aligned} \text{Referral Optimization} &= \text{Avoided Referrals} \times \text{Cost Differential} \\ &= 0.49 \times 2.4 \times (74.00 - 56.95)\text{ EUR} \\ &= 0.49 \times 2.4 \times 17.05 = 20.04\text{ EUR} \times 0.62 = 12.43\text{ EUR} \end{aligned}$$

This represents the combined impact of improved triage accuracy¹ and enhanced primary care management capability², avoiding duplication while capturing the full referral optimization value.

Documentation Efficiency

The automated report generation reduces documentation time by 63%³, from 8 minutes to 3 minutes per consultation. This efficiency gain inherently improves regulatory compliance through standardized, complete documentation:

$$\begin{aligned} \text{Documentation Value} &= \text{Time Saved} \times \text{Rate} \times \text{Annual Reports} \\ &= 5 \text{ min} \times \frac{93.84\text{ EUR}}{60} \times 2.4 \times \text{Factor} \\ &= 7.82 \times 1.49 = 11.65\text{ EUR} \end{aligned}$$

The value encompasses both time savings and compliance benefits, recognizing that automated documentation inherently improves regulatory adherence without requiring separate accounting.

Remote Care Cost Savings

According to our clinical studies, when using the Legit.Health medical Artificial Intelligence, 44-53% of consultations can be resolved remotely⁴⁵, avoiding in-person visit costs:

$$\begin{aligned} \text{Remote Savings} &= \text{Remote Resolution Rate} \times \text{Avoided Visit Cost} \times \text{Efficiency} \\ &= 0.485 \times 37.00\text{ EUR} \times 0.304 = 5.45\text{ EUR} \end{aligned}$$

This calculation focuses specifically on cost savings from avoided in-person consultations, distinct from capacity or patient convenience benefits.

Avoided Second Opinions

According to our clinical studies, Legit.Health improves diagnostic concordance between 72% to 86%⁶, which reduces confirmatory consultations:

$$\begin{aligned} \text{Second Opinion Savings} &= \text{Avoided Consultations} \times \text{Consultation Cost} \\ &= 0.14 \times 2.4 \times 37.00\text{ EUR} \times 0.62 = 7.32\text{ EUR} \end{aligned}$$

This value represents direct cost savings from reduced redundant consultations due to improved initial diagnostic confidence.

Objective Severity Assessment

The device provides standardized severity scoring (ICC 0.7-0.9)⁷, optimizing treatment decisions and resource allocation:

$$\begin{aligned} \text{Treatment Optimization} &= \text{Variability Reduction} \times \text{Annual Treatment Cost} \times \text{Efficiency} \\ &= 0.40 \times 845\text{ EUR} \times 0.025 = 8.45\text{ EUR} \end{aligned}$$

Objective assessment prevents both over-treatment and under-treatment, generating cost savings through appropriate resource utilization.

System Capacity Enhancement

Efficiency gains that increase healthcare system throughput

Consultation Throughput Increase

The device reduces consultation time by 42%³, enabling 70% more patients to be seen within existing resources:

$$\begin{aligned} \text{Throughput Value} &= \text{Capacity Increase} \times \text{Per-Patient Value} \times \text{Device Attribution} \\ &= 0.70 \times 74.00\text{ EUR} \times \frac{2.4}{13.2} \times 0.76 = 14.28\text{ EUR} \end{aligned}$$

This capacity enhancement is calculated independently from waiting list benefits to avoid overlap, focusing on the value of additional patients served.

Waiting List Reduction

84.37% reduction in waiting days⁸, from 95 to 15 days, creates system-wide value:

$$\begin{aligned} \text{Wait Reduction Value} &= \text{Days Saved} \times \text{Daily Opportunity Cost} \times \text{Capture Rate} \\ &= 80 \times \frac{42.85\text{ EUR}}{240} \times 0.76 = 10.91\text{ EUR} \end{aligned}$$

The calculation is calibrated to exclude throughput benefits already accounted for, focusing on the economic value of reduced wait times.

Clinical Quality Improvement

Risk mitigation and accuracy enhancement in clinical outcomes

Diagnostic Error Reduction

The device improves diagnostic accuracy from 72% to 86%⁶, significantly reducing medical liability and improving patient safety:

$$\begin{aligned} \text{Error Reduction Value} &= \text{Error Rate Reduction} \times \text{Liability Cost} \times \text{Attribution} \\ &= 0.14 \times 7420\text{ EUR} \times \frac{1}{52.3} = 19.85\text{ EUR} \end{aligned}$$

This value captures the clinical quality improvement aspect of enhanced diagnostic accuracy, distinct from operational benefits like reduced second opinions which are accounted for separately in direct cost savings.

Early Detection Value

Prevention and early intervention benefits.

Melanoma Stage Migration

Early detection shifts melanoma diagnoses to less costly stages⁹¹⁰¹¹, generating substantial economic value:

$$\begin{aligned} \text{Stage Migration Value} &= 0.003 \times [(88268 - 1689) \times 0.15 + (28456 - 3489) \times 0.25]\text{ EUR} \\ &= 0.003 \times [12987 + 6242]\text{ EUR} = 15.89\text{ EUR} \end{aligned}$$

The model accounts for the probability of stage shift and associated cost differentials between early and advanced melanoma treatment.

Non-melanoma Skin Cancer

For basal cell carcinoma (BCC) and squamous cell carcinoma (SCC), early detection enables less invasive treatment:

$$\begin{aligned} \text{NMSC Value} &= \text{BCC Incidence} \times \Delta\text{Cost}_{BCC} + \text{SCC Incidence} \times \Delta\text{Cost}_{SCC} \\ &= 0.018 \times 320\text{ EUR} + 0.007 \times 450\text{ EUR} = 8.95\text{ EUR} \end{aligned}$$

Chronic Condition Management

Early intervention in psoriasis, eczema, and hidradenitis suppurativa prevents disease progression:

$$\begin{aligned} \text{Chronic Value} &= \sum_{condition} \text{Prevalence} \times \text{Avoided Escalation Cost} \\ &= 0.025 \times 180 + 0.015 \times 120 + 0.004 \times 650 = 6.90\text{ EUR} \end{aligned}$$

Early detection and intervention in chronic inflammatory conditions reduces the need for systemic therapies and hospitalizations.

Patient-Direct Benefits

Value captured directly by patients through improved access and convenience.

Note: This category is excluded from the conservative pricing model as benefits accrue to patients rather than healthcare systems.

Reduced Travel Costs

Remote consultations eliminate transportation expenses for patients:

$$\begin{aligned} \text{Travel Savings} &= \text{Avoided Visits} \times \text{Average Travel Cost} \\ &= 1.16 \times (4.20 + 1.68)\text{ EUR} = 6.82\text{ EUR} \end{aligned}$$

Lost Productivity Recovery

Patients recover productive time previously lost to healthcare visits:

$$\begin{aligned} \text{Productivity Value} &= \text{Time Saved} \times \text{Average Wage} \times \text{Visits} \\ &= 2.5 \text{ hours} \times \frac{23.56\text{ EUR}}{\text{hour}} \times 0.9 = 5.31\text{ EUR} \end{aligned}$$

Treatment Adherence Improvement

Visual tracking and objective monitoring improve treatment adherence by 13%:

$$\begin{aligned} \text{Adherence Value} &= \text{Adherence Gain} \times \text{Clinical Outcome Value} \\ &= 0.13 \times 25.00\text{ EUR} = 3.25\text{ EUR} \end{aligned}$$

Risk Mitigation

Legal and regulatory protection value.

Note: This category is excluded from the conservative pricing model as it represents contingent rather than realized value.

Medico-legal Protection

Comprehensive documentation and objective assessment reduce liability exposure:

$$\begin{aligned} \text{Legal Protection} &= \text{Risk Reduction} \times \text{Average Settlement} \times \text{Probability} \\ &= 0.35 \times 45000\text{ EUR} \times \frac{1}{3178} = 4.95\text{ EUR} \end{aligned}$$

The device provides defensible documentation and objective clinical assessments that protect against malpractice claims.

Total Value Calculation

The total annual value generated per patient is summarized below, with breakdowns for both comprehensive and conservative models:

Category	Value (EUR)	Conservative Model
Direct Cost Savings	45.31	45.31
System Capacity Enhancement	25.19	25.19
Clinical Quality Improvement	19.85	19.85
Early Detection Value	31.74	31.74
Patient-Direct Benefits	15.38
Risk Mitigation	4.95
Total	146.43	107.33

The following table shows a breakdown including the sub-components of each category, with value for both models:

Category	Sub-Component	Value (EUR)	Comprehensive	Conservative
Direct Cost Savings
	Referral Optimization	12.43	✓	✓
	Documentation Efficiency	11.65	✓	✓
	Remote Care Cost Savings	5.45	✓	✓
	Avoided Second Opinions	7.32	✓	✓
	Objective Severity Assessment	8.45	✓	✓
	Subtotal	45.31	✓	✓
System Capacity Enhancement
	Consultation Throughput Increase	14.28	✓	✓
	Waiting List Reduction	10.91	✓	✓
	Subtotal	25.19	✓	✓
Clinical Quality Improvement
	Diagnostic Error Reduction	19.85	✓	✓
	Subtotal	19.85	✓	✓
Early Detection Value
	Melanoma Stage Migration	15.89	✓	✓
	Non-melanoma Skin Cancer	8.95	✓	✓
	Chronic Condition Management	6.90	✓	✓
	Subtotal	31.74	✓	✓
Patient-Direct Benefits
	Reduced Travel Costs	6.82	✓	✗
	Lost Productivity Recovery	5.31	✓	✗
	Treatment Adherence Improvement	3.25	✓	✗
	Subtotal	15.38	✓	✗
Risk Mitigation
	Medico-legal Protection	4.95	✓	✗
	Subtotal	4.95	✓	✗
Grand Total		146.43	146.43	107.33

Return on Investment Analysis

Healthcare System ROI

$$\text{ROI} = \frac{\text{Total Value} - \text{Price}}{\text{Price}} \times 100\%$$

Comprehensive Model (€146.43 value)

$$\begin{aligned} \text{At €40:} \quad \text{ROI} &= \frac{146.43 - 40}{40} \times 100\% = 266\% \\ \text{At €48:} \quad \text{ROI} &= \frac{146.43 - 48}{48} \times 100\% = 205\% \end{aligned}$$

Conservative Model (€107.33 value)

$$\begin{aligned} \text{At €29:} \quad \text{ROI} &= \frac{107.33 - 29}{29} \times 100\% = 270\% \\ \text{At €36:} \quad \text{ROI} &= \frac{107.33 - 36}{36} \times 100\% = 198\% \end{aligned}$$

Pricing Structure Recommendation

Standard Pricing Model (Comprehensive)

Based on €146.43 total value per patient:

Per-patient (capita)

• Volume Tier (>10,000 patients): €40 per patient/year
• Standard Tier (2,500-10,000 patients): €44 per patient/year
• Premium Tier (<2,500 patients): €48 per patient/year

Per-Report

Asuuming 2.13 reports per patient yeary:

• Volume Tier: €19 per report
• Standard Tier: €21 per report
• Premium Tier: €23 per report

Conservative Pricing Model (Core Value Only)

Based on €107.33 value per patient:

Annual Subscription

• Volume Tier (>10,000 patients): €29 per patient/year
• Standard Tier (2,500-10,000 patients): €32 per patient/year
• Premium Tier (<2,500 patients): €36 per patient/year

Per-Report (2.13 reports/patient/year)

• Volume Tier: €14 per report
• Standard Tier: €15 per report
• Premium Tier: €17 per report

Clinical Validation Summary

Performance Claim	Clinical Benefit	Economic Value
D62, DCH, DZC	Referral optimization	€12.43
BI_2023	Documentation efficiency	€11.65
LHF, 4BO	Remote care enablement	€5.45
8V3, UC7	Diagnostic accuracy	€19.85
5RB	Objective severity scoring	€8.45
ZM8	Melanoma early detection	€15.89
KPQ	Waiting list reduction	€10.91
DAO_2022	Capacity enhancement	€14.28

Conclusion

This value-based pricing analysis demonstrates that the Legit.Health medical device generates €146.43 per patient annually through six distinct, non-overlapping benefit categories. The methodology ensures each economic impact is counted exactly once, providing a rigorous and defensible value proposition.

The recommended pricing of €40-48 (comprehensive) or €29-36 (conservative) per patient annually ensures healthcare systems achieve exceptional ROI while the manufacturer captures fair value for innovation. With returns exceeding 200% even under conservative assumptions, the economic case for adoption is compelling.

The analysis is grounded in extensive clinical validation studies demonstrating measurable improvements in diagnostic accuracy, waiting times, and care delivery efficiency. By structuring benefits into mutually exclusive categories, this framework provides transparency and confidence for healthcare procurement decisions while supporting evidence-based investment in medical technology innovation.

Referencies

Footnotes

1. Legit.Health Clinical Validation Study. Performance Claims D62, DCH, DZC. Clinical Benefit 8PL: Improved Referral Precision. ↩

2. Legit.Health Clinical Validation Studies. Performance Claims WL4, WOI. 49-55% increase in PCP management. ↩

3. Legit.Health Clinical Validation Study BI2023. _Clinical Benefit 4CH: Documentation Automation. 63% reduction in documentation time demonstrated. ↩ ↩²

4. Legit.Health Clinical Validation Study IDEI2023. Performance Claim LHF. _44% remote resolution. ↩

5. Legit.Health Clinical Validation Study IDEI2023. Performance Claim 4BO. _53% remote resolution rate. ↩

6. Legit.Health Clinical Validation Study SAN2024. Performance Claims 8V3, UC7. _Top-1 diagnostic accuracy of 86.93%. ↩ ↩²

7. Legit.Health Clinical Validation Study BI2024. _Clinical Benefit 5RB: Objective Severity Assessment. ICC 0.7-0.9. ↩

8. Legit.Health Clinical Validation Study DAODerivation_O_2022. Performance Claim KPQ. _84.37% reduction in waiting list days. ↩

9. Legit.Health Clinical Validation Study MCEVCDAO_2019. Performance Claim ZM8. _93% sensitivity for melanoma detection. ↩

10. Marcellusi A, et al. Health utilities and costs associated with melanoma by stage. Eur J Health Econ. 2023;24(8):1289-1303. ↩

11. Instituto de Salud Carlos III. Costs of cutaneous melanoma by tumor stage. Spanish NHS data 2019-2023. ↩