Telemedicine visits significantly cheaper than in-person, research finds

In the wake of the Covid-19 pandemic, much of the medicinal world has entirely changed its environment. Hospitals and doctor’s offices have begun experimenting with the online format in an attempt to maximize efficiency and ease for those involved.

Researchers at the Perelman School of Medicine at the University of Pennsylvania found that the per-visit costs for the telemedicine program averaged $380. Comparatively, in-person encounters in primary care offices, emergency departments, or urgent care clinics cost $493. (a 23% difference per patient). The online format used by Penn has been called ‘OnDemand.’

“The conditions most often handled by OnDemand are low acuity — non-urgent or semi-urgent issues like respiratory infections, sinus infections, and allergies — but incredibly common, so any kind of cost reduction can make a huge difference for controlling employee benefit costs,” said the study’s lead researcher, Krisda Chaiyachati, MD.

“This research shows the clear financial benefits when hospitals and health systems offer telemedicine services directly to their own employees.”

The study analyzed 11,000 total visits by Penn Medicine employees using the company-sponsored insurance plan, comparing 5,413 visits to Penn’s OnDemand telemedicine service with 5,413 in-person visits.

“The program made care easier, and it lowered the costs of delivering each episode of care,” said David Asch, MD, MBA, a professor of Medicine, and the study’s senior author. “People who might otherwise have let that sore throat go without a check-up may seek one when it’s just a phone call away.”

Researchers watched demand increase 10% in telemedicine services over the study period, accompanying a 23% decrease in unit cost (providers’ salaries, equipment needed for calls, etc). The service is simultaneously easier for employees to use and less expensive for employers overall.

Although employers increasingly offer telemedicine options to their workforce, many health systems have been slow to adopt the approach. While past research argued employer-offered telemedicine did not lower the costs of care, health systems are uniquely positioned for their telemedicine offerings to drive savings.

Some advantages of telemedicine:

• Leverage own providers
• Make in-system/in-network referrals
• Better organize follow-up care

Comfort with telemedicine services increased with the pandemic, resulting in health systems delivering telemedicine more efficiently than ever before. In addition, patients and specialists now have a better understanding of what can be accomplished over telemedicine.

Related: Growing demand for employee mental health access: Is telehealth the answer?

“The data we analyzed pre-date the pandemic. It was a time when people were just putting a toe in the water and wondering, ‘Let me see if telemedicine could treat my needs,’” Chaiyachati said.