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Telehealth may increase overall health spending and utilization despite lower cost per episode, says Health Affairs

The authors estimated that 12 percent of telehealth visits replaced visits to other providers, while 88 percent represented new utilization.

Jeff Lagasse, Associate Editor

For health plans and employers, one of the key attractions of telehealth is the potential savings involved in replacing physician office and emergency department visits with less expensive virtual visits. But new findings published in the journal Health Affairs suggest that telehealth may increase overall healthcare spending by increasing utilization.

In fact, in looking at commercial claims data on more than 300,000 patients from 2011 to 2013, the authors estimated that 12 percent of telehealth visits replaced visits to other providers, while 88 percent represented new utilization.

The findings come as the growth of telehealth seems to be accelerating. There were an estimated 1.25 million direct-to-consumer telehealth visits in 2015, and telehealth company Teledoc reported that provided roughly 600,000 visits that year -- about double the previous year. A recent survey of large employers showed that 90 percent of them plan to offer some kind of telehealth option in 2017.

[Also: UW Health to launch telehealth services later this year, American Well to partner]

The potential for utilization increase was one of the authors' primary areas of concern, and in fact they found that there was a net $45 per person increase in acute respiratory infection spending among direct-to-consumer telehealth users.

Reimbursement for a telehealth visit, as expected, was lower than that for a physician office or ED visit. However, the authors found that telehealth visits may be more likely to result in follow-up appointments, testing or prescriptions, so although the telehealth visit is less costly, the per-episode cost could be greater than in other settings.

The findings are consistent with research on other attempts to inject convenience healthcare  -- such as retail clinics, where about 60 percent of visits represent new utilization. The research suggests that there may be a correlation between the convenience of a service and the utilization increase it heralds; telehealth visits, after all, take the convenience factor one step further by eliminating the need for travel altogether.

[Also: 20% of consumers would swap doctors for one that offered telehealth services, American Well says]

When facing the decision of whether to cover direct-to-consumer telehealth services, there are a few things employers and health plans should consider, the authors said. The first is that, while telehealth doesn't seem to be reducing overall spending currently, it has the potential to, if a greater percentage of visits represented substitutions for visits in other settings. This could be accomplished, the authors said, by increasing patient cost sharing for telehealth visits, or by focusing on outreach to patients who are frequent users of ED care, for example.

Another thing to consider is that the benefits of telehealth depend on the conditions treated, and the population affected. In this study the authors focused on acute respiratory infections, the most common type of ailment treated by telehealth providers. These conditions are often self-limiting in the sense that care doesn't improve health in many cases. For something like diabetes or mental illness, an increase in utilization might be construed as a net positive, since those types of conditions are typically undertreated.

Costs are only one consideration when contemplating whether to offer telehealth, the authors said. Another is employee satisfaction, and if they come to expect telehealth as part of their benefits package, it may be worth it to include telehealth as an offering while attempting to limit overuse.

Twitter: @JELagasse

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