Telemedicine: Does It Help Control Healthcare Costs?

Citizens and policymakers alike are exploring ideas to reduce the cost of health insurance. amidst an aging population and lack of healthcare access, especially for rural communities. Telemedicine may be one way to extend cost-effective, high-quality healthcare to more people.

Telemedicine let physicians and nurse practitioners to evaluate, diagnose, and treat injuries or illnesses from a distance using personal communication devices.

Telemedicine began in the 1950s as a way for Americans in hard-to-reach rural communities to work with high-quality care providers that may not be located near them. Over the phone, specialists could evaluate and advise local doctors on new treatment plans for patients living too far to receive service.

According to ChironHealth, "... it (telemedicine) is becoming an increasingly important part of the American healthcare infrastructure."

Who uses telemedicine?

Patients and healthcare providers alike are showing more comfort with receiving healthcare virtually. Some estimate telemedicine usage is growing at 18.4% per year and will continue to do so through the year 2020. 

Dr. Nitin Goyal, an orthopedic surgeon and founder of a digital health startup, says, "Over the past decade, telehealth advancements have improved tremendously, as has patient adoption." But that's not the whole picture. Goyal says three components within telemedicine are leading the industry's growth -- telebehavioral health, virtual chronic disease management, and specialty telemedicine. 

• Telebehavioral Health

  • Counseling, psychology, and psychiatry conducted through digital technology make up the bulk of telebehavioral health. Patients can connect with their counselors, social workers, psychologists, and psychiatrists over the phone or internet.

• Virtual Chronic Disease Management

  • More than 40% of Americans have a chronic disease such as diabetes, depression, or heart disease. Chronic diseases account for the overwhelming majority of healthcare expenses. Telemedicine offers a fantastic opportunity to expand preventative treatment, and save money through more efficient care.

• Specialty Telemedicine

  • Some specialties lend themselves more naturally to telemedicine than others, such as pediatrics, OB/GYN, and urgent care. Many pediatric office visits for asthma or diabetes can be replaced with virtual appointments.

What are the benefits of telemedicine?

Telemedicine allows patients to receive treatment without the hassle of driving to the doctor's office while ill. It means not having to take time away from work to load up the car with a sick family member. For people who live in more remote locations, it can mean the difference between receiving high-quality care and no care at all. 

Providers also benefit from fewer missed appointments and improved office efficiency that can help their bottom line. Providers can also offer better follow-up care and keep a closer eye on chronically ill patients.

What are the costs of telemedicine?

In the aggregate, telemedicine is proving to be a big cost-saver for private-pay patients and insurers alike when calculated on a cost-per-visit basis. A study from Red Quill Consulting says that the average telemedicine visit costs $40-$50, while the average in-office patient visit costs $136-$176. Many insurance plans allow participants to use telemedicine services for free as a way to reduce in-person visits.

According to the American Telemedicine Association (ATA), "Telehealth also improves efficiencies, helps to reduce costs, and enables healthcare providers and hospital systems to do more good for more people."

Conducting a cost/benefit analysis of telemedicine.

Not everyone agrees with the ATA, however.

Telemedicine shows excellent promise as a solution to high healthcare costs and low coverage. In an article entitled Are Virtual Doctor Visits Really Cost-Effective?, the Kaiser Health News Service, concluded that "While telehealth services may boost access to a physician, they don't necessarily reduce healthcare spending."

The convenience of the technology causes some patients to seek a physician's care for minor illnesses or injuries that they would previously have treated themselves with over-the-counter drugs. 

For now, it seems that using common sense about when to approach a physician and when to take care of things yourself is still the best way to save money, regardless of whether your doctor sees you in person or online.

Is telemedicine right for you?

Telemedicine works best for consumers who can use it to save time and money, along with those who would not otherwise have access to care due to distance. 

To determine when telemedicine is your best choice, talk to your insurance agent and your healthcare provider.