Healthcare entities offering employees direct-to-consumer telemedicine could cut costs nearly 25%
Healthcare employees who utilize telemedicine visits at their institution in lieu of in-person appointments reduce their health system's employee care costs by almost 25%.
That’s according to new data published in the American Journal of Managed Care comparing the two visit types among a total of 10,826 encounters for 7,793 beneficiaries recently [1].
For the study, researchers at the Perelman School of Medicine at the University of Pennsylvania analyzed costs incurred by employees who utilized the institution’s telemedicine program, called Penn Medicine OnDemand, to expenses associated with in-person visits (primary care offices, emergency department, urgent care clinics, etc.) for the same or similar conditions. Overall, the team observed a $113 difference in costs per patient per appointment, with OnDemand visits costing an average of $380 per encounter and in-person visits costing an average of $493.
The study’s lead researcher, Krisda Chaiyachati, MD, an adjunct assistant professor of medicine at Penn Medicine, noted that the telemedicine visits included in the assessment were frequently to address non-urgent issues such as respiratory infections, sinus infections and allergies. In-person visits for these kinds of conditions are common and avoidable, offering a ripe opportunity to reduce associated expenses by utilizing virtual care, Chaiyachati suggested, adding that “any kind of cost reduction can make a huge difference for controlling employee benefit costs.”
“This research shows the clear financial benefits when hospitals and health systems offer telemedicine services directly to their own employees," Chaiyachati said in prepared remarks.
While the institution’s direct-to-consumer offering to its employees resulted in a 10% increase in telemedicine utilization, it still provided overall cost savings of approximately 23% compared to costs associated with in-person visits.
“The program made care easier, and it lowered the costs of delivering each episode of care,” the study’s senior author David Asch, MD, MBA, said in the same news release. “But making care easier makes for more care: People who might otherwise have let that sore throat go without a checkup may seek one when it’s just a phone call away.”
The analysis was conducted using data from visits that occurred prior to the COVID-19 pandemic. However, telemedicine encounters increased substantially during the height of the pandemic, and the authors believe that the savings they observed during the period of their study would likely be higher now that the public has gotten more comfortable with virtual health visits.
“These days, people seem willing to jump in for an appropriate set of conditions. The good news is that we made care easier while saving money, and we think the savings could be higher in the future,” Chaiyachati said.
The study abstract is available here.
In addition to her background in journalism, Hannah also has patient-facing experience in clinical settings, having spent more than 12 years working as a registered rad tech. She began covering the medical imaging industry for Innovate Healthcare in 2021.