Should telemedicine consultations be given away for free? After all, at $40 a visit, remotely diagnosing and treating patients using technology could drastically lower healthcare costs by replacing a $1,200 emergency room visit for routine care. The cost difference is a compelling argument for free telemedicine.
A 2014 analysis by Willis Towers Watson indicates that telemedicine could save U.S. employers $6 billion per year.
Would free telemedicine visits for health plan members flood the healthcare system with unnecessary consultations that would actually drive costs up? Would the convenience of a telemedicine visit when compared to driving to a physical location result in overuse by patients? Or would it fulfill its promise of saving money by drastically reducing the number of unnecessary visits to emergency rooms at $1,200, urgent care centers at $190, doctor’s offices at $125, and walk-in clinics at pharmacies at $85?
The fact is telemedicine can replace visits for a laundry list of ailments such as coughs, colds, fever, abdominal cramps, acid reflux, arthritis, joint pain, eye infections, respiratory infections such as laryngitis, bronchitis, sinusitis, or skin problems triggering dermatology visits. It is also being used for psychiatry and other virtual behavioral health visits.
Unanswerable questions about use and misuse make offering and promoting telemedicine by plans and employers a balancing act.
Telemedicine is nearly ubiquitous, but consumer interest is low
Nevertheless, employers are adopting telemedicine in high numbers. Telemedicine will be offered by 96 percent of large employers by 2018, according to a survey by the National Business Group on Health. This is corroborated by the 22nd annual Willis Towers Watson Best Practices Survey showing that 94 percent of employers already offer their employees telemedicine or are planning to or considering it by 2019.
At the same time, consumers are showing little interest. Teladoc reported that employee utilization rates are at just 6.1 percent.
Pros and cons
Dr. Allan Khoury, a senior health management consultant with Willis Towers Watson, wrote that employers should consider giving away telemedicine for free. It could be a cost-effective catalyst to increase use.
Plus, telemedicine is becoming even more useful as apps and accessories for smartphones turn them into remote diagnostic tools. For example, companies such as CliniCloud are creating devices that make it possible to check vital signs, hear heart and lung sounds, and perform other routine diagnostic tests remotely and get results immediately.
The cautionary note that telemedicine could lead to overuse of telemedicine comes from Rand study in which researchers examined 300,000 claims from 2011 to 2013 for 300,000 beneficiaries of California pension fund and health benefits manager CalPERS. Focusing on acute care such as respiratory infections, the study examined the records of those who received care from telehealth providers, as well as those who received care from a physician’s office or a hospital emergency department.
The study’s findings revealed that telehealth services were about 50 percent lower in cost than a physician office visit, and less than 5 percent the cost of a visit to an emergency room. However, increased annual spending by $45 per telehealth user outweighed the savings from telemedicine instead of traditional care.
A press release announcing the Rand study noted, “While direct-to-consumer telemedicine services do increase patients’ access to convenient health care, researchers say new strategies such as higher copays or targeted marketing may be needed if telehealth is to fulfill its potential as a cost-saving strategy.”
It is noteworthy that Anthem just announced it will stop covering emergency room visits in Indiana in cases for which the insurer deems are non-emergencies. Expect that more plans will impose rules and incentives to better manage the use of acute care choices. As part of that effort, they may remind their members that telemedicine is an option.
Still, if we follow the Rand study implications, hypochondriacs could call telehealth professionals endlessly and drive up costs. On the other hand, judicious use by plan members could cut a lot of fat out of health care costs for mundane health care visits.
One thing is clear. Telemedicine is not yet fully integrated into our health care system. Consumers need incentives to try it. And, plan sponsors need the proper claims management to assure its use is necessary.
Welcome to the Yin and Yang of telemedicine.
[Photo Credit: Ian Hooton, Getty Images]