Telehealth Savings: Promise vs. Reality

March 16, 2017

Laptop smartphone handsAteev Mehrotra and coauthors from RAND and CalPERS published a Health Affairs article on direct-to-consumer telehealth, in which a patient directly accesses a medical professional through phone or video. While direct-to-consumer telehealth is pitched as saving money, they found utilization for these services were actually mostly new usage and therefore led to greater spending.

In a related Boston Globe article, Mehrotra said:

This form of telemedicine has been promoted as a way to decrease health care spending. Our study does not support that. We found that spending actually increased. It really challenges that common perception … At its heart, we’re arguing a very, very basic point. When you make something more convenient, more people use it.

The study looked at the care for 300,000 CalPERS employees between 2011 and 2013 on acute respiratory infections—the most common condition treated through telehealth.

They studied what fraction of the telehealth visits represented new utilization (care that otherwise would not have happened) versus replacement (the patient used telehealth instead of going to a doctor’s office). Of the visits they studied, 88 percent represented new utilization and, in total, there was a net $45 per person increase in acute respiratory infection spending among the direct-to-consumer telehealth users.

Telehealth is rapidly growing, in part because of its promise to save employers and health care providers money. It may not be a wasteful investment, and it may in fact be critically important in increasing access for people in regions where health care specialists are hard to find, such as rural or inhospitable areas. But, the researchers say, it is important to empirically assess the common assumption that telehealth saves money. 

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