Telehealth could increase costs in some cases

A new study of commercial claims data on acute respiratory infections found that nearly 9 in 10 telehealth visits represented new utilization, rather than substitutes for in-person encounters.

Telehealth could increase costs in some cases

Knowing that your doctor is just a click away can, apparently, drive the healthcare costs up instead of delivering the promised cost savings.

A new study published in Health Affairs tracked three years of commercial claims data on acute respiratory infections and found that nearly 9 in 10 telehealth visits represented new utilization, as opposed to substitutes for in-person encounters. That's good news for patients, but not for payers which planned to save costs when agreeing to reimburse for virtual visits.

The study's authors acknowledge that the per-episode cost of a telehealth visit represents about half the cost of an office visit, but a lot more of those visits were not substituting regular office 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," the authors write.

In practical policy terms, the authors suggest a few strategic considerations for providers in light of these findings:

First, since telehealth services save patients costs on travel time, they think payers may be able to raise patient costs to reduce the impact of increased utilization.

Second, for some patient populations, greater utilization may provide more of a cost benefit than it does to the population in the study, particularly for undertreated conditions. For instance, an increase in utilization for patients with diabetes or mental illness might be perceived as a net positive.

And third, with telehealth becoming a more widespread, the study authors think payers could explore ways to limit the potential for unnecessary use of the service.

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