Telehealth increases utilization instead of replacing office visits

Using direct-to-consumer telehealth, where a patient was direct access to a physician on the phone or through videoconferencing, may be a tool to increase access to care. According to a study published in the March 2017 issue of Health Affairs, it also increases utilization and spending.

The assumption with telehealth, according to RAND Corporation associate policy researcher J. Scott Ashwood and his coauthors, is commercial insurance plans can save money by replacing visits to a physician or even the emergency departments with virtual visits costing between $40 and $50. Ashwood and his coauthors had two concerns with this assumption: 1) Per-episode costs would be greater because more follow-up care would be recommended, and 2) the convenience of telehealth would lead to greater utilization of services.

The study found the first worry was unfounded. The second concern, however, appears to be a real issue.

Commercial claims data from 2011 to 2013 was used for the study, covering more than 300,000 patients in California’s health maintenance organization (HMO) plan for public employees (which had begun offering telehealth services in 2012) and focusing on the “most common set of conditions” treated via direct-to-consumer telehealth.

Looking at spending per episode, telehealth would win the savings argument, costing an average of $79 per acute respiratory infection episode versus $146 for an office visit or $1,734 for an emergency department (ED) visit. However, those benefits are outweighed by 90 percent of the telehealth visits representing new utilization rather than replacing office or ED visits.

“The savings from substitution were outweighed by the increase in spending for the new utilization, and per enrollee spending on acute respiratory infection treatment was higher among telehealth users, compared to nonusers. This pattern of greater spending for telehealth users remained even after we accounted for time costs to patients for traveling to and completing health care visits,” Ashwood and his coauthors wrote.

The policy implications of these findings could be to increase patient cost-sharing in telehealth services, justifying to patients that they’ll save on travel costs and time.

Despite the study serving to debunk savings claims by telehealth providers, Ashwood and his coauthors concluded that telehealth still has merit and benefits for the healthcare system, and costs shouldn’t be the only consideration in deciding whether to include those services to a population.

“Even if direct-to-consumer telehealth services do not save money, telehealth is clearly a service of value to customers and may yield benefits in other metrics, such as employee satisfaction,” Ashwood and his coauthors wrote. “Furthermore, as direct-to-consumer telehealth services grow in popularity and become a standard offering, employees may come to expect the services to be part of their benefits package. If this becomes the case, the strategy of cost-conscious employers and health plans should be to offer the services while simultaneously attempting to limit overuse.”