Our friends at Health Affairs recently published a fantastic study by the RAND Corporation looking at the impact of direct-to-consumer telehealth on healthcare spend. The conclusion was that while employers/payers offering telehealth as a covered benefit may increase access to care, it didn’t decrease spending.
Naturally, with telemedicine/telehealth being touted as a method of helping to contain rising healthcare costs, this is the headline publications latched on to. But, the published study contained some very interesting points that shouldn’t be lost.
If you are a reader of scientific, peer reviewed research, you can skip over this section. For everyone else (also known as most of the population), it’s important to note that this study is highly specific. It focuses exclusively on one type of online care – telehealth, meaning direct video/phone consultations – for a very specific population and one condition – acute respiratory infections.
This type of specificity is necessary in research because reducing variables is how researchers obtain meaningful data. When research hits the mainstream, it’s easy for people to lose the intensity of focus and begin applying the findings on a broad scale. That’s how we wind up with headlines like Scientists Say Smelling Farts Prevents Cancer. Spoiler alert: that’s not accurate.
The most interesting finding in this study isn’t that telehealth doesn’t decrease overall spending, it’s that the increase in spend came from people seeking care who might otherwise not have gone to the doctor at all. In a per-episode analysis, telehealth visits decreased costs. However, the researchers found that offering telehealth as a covered benefit increased utilization of healthcare services relative to a control group. This means more people sought care (or at least submitted a claim) for acute respiratory infections when telehealth was made available to them.
The study’s authors estimated that within their parameters, 90% of telehealth visits were new utilization. And that’s a good thing. Having health insurance lowers some of the financial barriers to seeking care, but doesn’t necessarily equate to access. Seeking care early on before conditions become more difficult to treat or complications arise can translate to cost savings down the line that are not factored into this particular study.
Cost Saving Potential
It’s easy to focus on the findings that within the study’s parameters, offering direct-to-consumer telehealth did not lower healthcare spend. However, the authors are quick to point out that the lower cost per episode suggests telehealth does hold the potential to reduce healthcare costs. Moreover, they note that the study focused solely on acute respiratory infections, and other uses of telehealth – including chronic disease management or behavioral health – could offer significantly greater cost savings.
The study notes that unlocking the value of telehealth remains within reach. The cost to payers, like employers and insurance plans, is just one factor in the overall value proposition online care brings to the healthcare industry. Health systems, healthcare providers and patients all stand to benefit from the shift to telehealth and virtual care.
And as the authors say, “Creative strategies such as…the integration of telehealth into overall care may make it possible to use this emerging and popular service as a way to increase the value of care.”
About the Author
Rebecca Hafner-Fogarty, MD
In addition to being a primary care physician and serving as Chief Medical Officer of Zipnosis, Dr. Hafner-Fogarty has extensive experience in medical regulation, serving on the MN Board of Medical Practice from 1998-2003, 2004-2010, and 2012-2016. She served as board president in 2009 and has also been involved in medical regulatory activities at the national level.