Telehealth drives up healthcare
utilization and spending
By Maria
Castellucci | March 7, 2017
Modern Medicine
Telehealth, which is frequently
touted as an effective strategy to decrease healthcare spending, may actually
be driving up costs, according to a new study by the RAND Corp.
The report, published Monday in the journal Health Affairs, found that although telehealth appointments are cheaper than in-person and emergency room visits, the online and virtual resources encourage vast new utilization, ultimately driving up healthcare spending.
The findings are a surprise wake-up call as employers increasingly look to offer telehealth services to their workers. About 90% of large employers said they would offer telehealth services as part of their employee health plans in 2017, according to a 2016 survey from the National Business Group on Health.
The study's researchers used 2011-13 claims data from the California Public Employees' Retirement System to dive into telehealth costs. The authors compared the cost and use of telehealth visits and in-person visits for patients seeking treatment for acute respiratory infections, one of the most comment conditions treated via telehealth services.
The researchers found that only 12% of direct-to-consumer telehealth visits replaced a visit to another provider.
The convenience of telemedicine is encouraging people to seek care when they normally wouldn't, said Scott Ashwood, lead author of the report and associate policy researcher at RAND Corp. “You don't even have to go anywhere … you just have to pick up the phone.”
An individual may be less inclined to go see their primary-care doctor or visit the ER if they have the common cold or a high fever. But the easy access and low cost of telemedicine may motivate people to seek a clinical consultation, Ashwood said.
On average, a telemedicine appointment costs about $79 compared to $146 for a doctor's visit and $1,734 for an ER visit, the study found.
RAND Corp. found a similar trend taking place among retail clinics. A study in November 2016 found ERs near retail clinics didn't experience a reduction of visits from patients with low-acuity illnesses.
To discourage telemedicine overutilization, the authors suggested increasing patient cost-sharing for the consultations. This could encourage people to consider more critically what conditions they will seek care for, Ashwood said. “If I have to pay more out of pocket to pick up the phone, maybe I don't,” he said.
The authors also suggested health plans reach out to patients who frequently use the ER and encourage them to use telemedicine services instead. Ashwood said patients with chronic conditions that frequently use the ER for care will effectively decrease spending if they use telemedicine instead.
“We are seeing patients responding (to telemedicine) so there is a benefit to respond to certain populations,” Ashwood said.
The report, published Monday in the journal Health Affairs, found that although telehealth appointments are cheaper than in-person and emergency room visits, the online and virtual resources encourage vast new utilization, ultimately driving up healthcare spending.
The findings are a surprise wake-up call as employers increasingly look to offer telehealth services to their workers. About 90% of large employers said they would offer telehealth services as part of their employee health plans in 2017, according to a 2016 survey from the National Business Group on Health.
The study's researchers used 2011-13 claims data from the California Public Employees' Retirement System to dive into telehealth costs. The authors compared the cost and use of telehealth visits and in-person visits for patients seeking treatment for acute respiratory infections, one of the most comment conditions treated via telehealth services.
The researchers found that only 12% of direct-to-consumer telehealth visits replaced a visit to another provider.
The convenience of telemedicine is encouraging people to seek care when they normally wouldn't, said Scott Ashwood, lead author of the report and associate policy researcher at RAND Corp. “You don't even have to go anywhere … you just have to pick up the phone.”
An individual may be less inclined to go see their primary-care doctor or visit the ER if they have the common cold or a high fever. But the easy access and low cost of telemedicine may motivate people to seek a clinical consultation, Ashwood said.
On average, a telemedicine appointment costs about $79 compared to $146 for a doctor's visit and $1,734 for an ER visit, the study found.
RAND Corp. found a similar trend taking place among retail clinics. A study in November 2016 found ERs near retail clinics didn't experience a reduction of visits from patients with low-acuity illnesses.
To discourage telemedicine overutilization, the authors suggested increasing patient cost-sharing for the consultations. This could encourage people to consider more critically what conditions they will seek care for, Ashwood said. “If I have to pay more out of pocket to pick up the phone, maybe I don't,” he said.
The authors also suggested health plans reach out to patients who frequently use the ER and encourage them to use telemedicine services instead. Ashwood said patients with chronic conditions that frequently use the ER for care will effectively decrease spending if they use telemedicine instead.
“We are seeing patients responding (to telemedicine) so there is a benefit to respond to certain populations,” Ashwood said.
