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DTC Telehealth Prompts Use of Medical Services, Not Savings

Direct-to-consumer telehealth is gaining momentum and affecting the volume of in-office visits and the use of medical services, but is not affecting care costs.

Direct to Consumer Telehealth Prompts use of Medical Services

Source: Thinkstock

A new study from RAND found that 12 percent of telehealth use replaced office and emergency room visits while 88 percent represented new use of medical services.

The team of RAND policy researchers examined claims information from 300,000 beneficiaries enrolled in a health plan that offered direct-to-consumer telehealth to members in 2012, and focused on care for acute respiratory infections such as sinus infections and bronchitis, the most common conditions people seek care from telehealth providers.

Telehealth offers consumers a new way to receive care with higher conveniences and lower costs but is underutilized in healthcare. The research team determined that telehealth visits were lower cost than in-office visits but those savings were minimal compared to the cost of spending for new medical services.

“The study found that for each episode of acute respiratory infection, the cost of telehealth services were about 50 percent lower than a physician office visit and less than 5 percent the cost of a visit to an emergency department,” the researchers said. “However, the savings from substitution was outweighed by increased spending on the new use of medical services. The study estimates that net annual spending on acute respiratory illness increased by $45 per telehealth user.”

Spending for each acute respiratory infection visit was lower through direct-to-consumer telehealth visits than for either physician office or ED visits. Average spending per telehealth visit was $79, $146 for in-office visits to a physician, and $1,734 for emergency department visits. Compared to a physician’s office or ED visit, there was lower spending on average for services like pharmaceutical, imaging, testing, through telehealth visits.

The use of telehealth is growing rapidly, as the study highlighted that there were over 1.2 million reported visits in 2015. The researchers also expect telehealth to be offered by 90 percent of  large employer groups. Expectations for telehealth include ease of use and extreme flexibility of care based on location.  

“Like some other new patient care models that promise to cut costs and reduce the hassle of receiving medical care, it appears that in some cases, direct-to-consumer telehealth may increase spending rather than trimming costs,” said J. Scott Ashwood, lead author of the study.

The research team suggested insurers looking to increase parts of direct-to-consumer telehealth that substitutes higher-cost care should raise the cost of co-pays for the service. Another suggested strategy the team said would be the development of better tools that encourage consumers to use telehealth tools instead of emergency department care.

Healthcare consumers in an Accenture survey reported that 70 percent of consumers wanted to use digital services for better cost-to-convenience value, but only a fifth of consumers were actually offered it by their providers. An American Well survey found that 20 percent of consumers would outright switch healthcare providers if the new provider offered telehealth tools of any sort.  

Telehealth networks across the US are growing and developing larger systems to support it. Northwell Health of New York expanded their telehealth platform to offer more direct-to-consumer services. American Well took some of its own advice by establishing a telehealth partnership with Samsung to further consumer-to-clinical telehealth.  

“Given that direct-to-consumer telehealth is even more convenient than traveling to retail clinics, it may not be surprising that an even greater share of telehealth services represent new medical use,” said Lori Uscher-Pines, co-author of the report. “There may be a dose response with respect to convenience and use -- the more convenient the location, the lower the threshold for seeking care and the greater the use of medical services.”

Proponents of telehealth services must address the issue of cost, and the research team concluded that out-of-the box strategies would be the best bet in order to do so.

“Creative strategies such as increasing patient cost sharing, targeted patient outreach, and 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.”

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