Surprise! Telehealth Doesn't Increase Overall Utilization and Cost As Much as We Thought

"Given concerns that telemedicine's convenience will lead to more visits, the relatively small increase in visits that we observed was somewhat surprising."

The Impact Of Telemedicine On Medicare Utilization, Spending, And Quality 2019-2022

While telemedicine use has fallen, rates through 2022 are still substantially higher than pre-pandemic. Has telehealth’s growth increased healthcare service utilization and spending overall, or lowered quality? What policy makers have feared isn’t bearing out, not according to a new study published in Health Affairs. The study involved traditional fee-for-service (FFS) Medicare beneficiaries and their use of health system telehealth services.

Some temporary pandemic-era waivers that increased telehealth adoption have ended while others remain. Select Medicare expansions will end on Dec. 31, 2024, unless Congress extends them. Policy makers want to know if telehealth utilization will negatively impact healthcare quality and cost long term before making permanent coverage changes.

While a new study showed increases that were relatively small, the authors note that future impacts could change as telehealth technology, optimization, and patient demand shifts.

Study definitions and methodologies

The study used Medicare data from more than 5.5 million patients assigned to one of 576 health systems. The researchers focused on systems because they tend to make telemedicine investment and deployment decisions at the organizational level.

The study divided these systems into quartiles, comparing high-telemedicine health systems (health systems in the highest quartile of telemedicine use) with low-telemedicine health systems (those in the lowest quartile of use).

Other definitions include:

• Health system: “A jointly owned or managed group of provider organizations . . . with at least one acute care hospital, ten primary care physicians, and a total of fifty physicians.”
• Patients: FFS original Medicare beneficiaries continuously enrolled between 2019–22 who also had a 2019 primary care visit.
• Outpatient telemedicine visits: Those received in clinics and outpatient hospital settings.

“Surprising” results in utilization and cost

Compared to low-telemedicine health systems, patients of high-telemedicine health systems had “modest” increases in office visits, care continuity, and prescription drug adherence; fewer ED visits; no differences in testing or preventive service; and a small spending increase due largely to inpatient services and drug costs.

Specifically, and compared to “low” systems, “high” systems annually had:

• more telemedicine visits per person: 2.5, representing 26.8% of visits, versus 0.7, or 9.5% of visits;
• more outpatient visits (telemedicine and in person): 2.2%;
• less non-COVID ER visits per 1,000 patients: 2.7%;
• higher per-patient spending: 1.6% or $248; and
• better metformin and statins adherence.

The conclusion? “Given concerns that telemedicine’s convenience will lead to more visits, the relatively small increase in visits that we observed was somewhat surprising.”

The authors propose several reasons — e.g., limited health system capacity to expand services; lower patient demand due to access barriers and skepticism. They also do not rule out more significant impacts in the future.

Future impacts: Regulations, technology and demand

Policy makers want a greater long-term understanding of telemedicine’s impact on overall cost and quality but are willing to tolerate small spending growth.

Small growth was among the study’s main findings, with the study authors: “Whether our findings support or refute these concerns hinges on interpretations of the estimated spending impact (a 1.6 percent relative increase) and the clinical benefits of the changes we observed in visits, care continuity, and adherence.”

While adding that telemedicine’s impact “could change as technology improves, health systems optimize telemedicine services, or patient demand grows," the study suggests that “it will be difficult to justify a return to restricting telemedicine payment in Medicare.”