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Telehealth can reduce costs and help improve access to care — is your business ready?

Third-party apps, new mobile technology, and government policies are poised to drastically expand telehealth access in the coming years. That’s good news: Research shows that telehealth has the potential to save U.S. companies approximately $6 billion a year.1 And 93% of consumers who’ve used telehealth say that it lowered their health care costs.2 However, only 15 percent of doctors use telehealth with their patients.3 So while embracing telehealth presents great cost-saving opportunities, it’s important for employers to fully understand the telehealth landscape to get the most out of their health care benefits.

Telehealth can help employees keep up with doctor’s appointments without taking time off work. It typically takes two hours to see the doctor for 20 minutes, including 37 minutes of travel, 64 minutes at the clinic, and 20 minutes with the doctor.

Telehealth helps employees keep up with much-needed care

In many ways, health care still operates on a 9-to-5, Monday through Friday, schedule. This can present a real dilemma for working people, who have to take time off work for health appointments. This can also lead to delayed or missed care because employees can’t or don’t want to take the time off:

  • More than 2 in 3 people say they’ve delayed seeking care for a health problem, often because they’re too busy4
  • 3 out of 5 people say they feel uncomfortable leaving work for a preventive appointment5
  • 9 out of 10 would cancel or reschedule a preventive appointment because of job pressure6
Consider this: Are you losing money because you don't offer telehealth? 75% of health care dollars go toward chronic diseases. Telehealth programs are an effective way to manage chronic conditions. In one study of people with cardiovascular disease, a telehealth program lowered monthly health care costs by $576 per person compared to usual in-person care.

Telehealth expected to become more widely available

Changing financial incentives are set to significantly expand telehealth access, offering employees a convenient alternative to in-person office visits. Here’s why: The Centers for Medicare & Medicaid Services (CMS) — the largest health care payer in the U.S. — has historically limited reimbursement for many telehealth services. Some services aren’t covered at all, while others are only covered in specific situations — for patients in rural areas who are staying in a hospital, for example. So it’s easy to see why some doctors wouldn’t want to offer telehealth: In many situations, they wouldn’t get paid for it.7

Starting in 2020, certain types of Medicare plans will be allowed to offer telehealth services as an alternative to in-person visits, provided that in-person visits are still an option. The rule also expands the type of telehealth services covered by Medicare.8 “These are exciting changes which will increase access to care, give patients new choices, and foster the type of innovations we need to strengthen Medicare and ensure its sustainability into the future,” CMS Administrator Seema Verma said. “And we know that, given Medicare’s size, whatever we do affects the entire health care market.”9

Third-party apps aim for convenience, but is the care effective?

One way the market is looking to capitalize on the consumer interest in telehealth is through third-party mobile apps. Experts estimate that ultra-high-speed 5G internet will be available in cities by 2020 and in less populated areas by 2023, making for a better mobile experience.10

But there are big drawbacks to third-party apps. In most cases, providers can’t access patient medical records, so they’re not aware of existing health conditions and medications. This can lead to serious problems — one study found that doctors on a third-party telehealth app were more likely to prescribe antibiotics for respiratory infections, even though most respiratory infections do not respond to antibiotics.

The truth is that some third-party telehealth care apps won’t do much to help support overall health. “Telehealth has to be integrated fully into a total care system,” Mario Gutierrez, executive director of the Center for Connected Health Policy, told Wired magazine. “It can’t just be a one-off. That’s not health care.”11

Telehealth can prevent costly visits to the emergency department. A telehealth program in Houston resulted in a 6.7% reduction in unnecessary emergency department visits and a cost savings of $2,468 to the health system for each emergency department visit avoided.

It pays to carefully consider your telehealth options

When done right, telehealth can be an effective way for doctors, payers, and employers to manage costs. It can help providers deliver care sooner, potentially resulting in fewer procedures, shorter hospital stays, and healthier outcomes. But current employee-sponsored coverage levels vary widely. Most private insurance payers currently limit telehealth reimbursement to certain types of interactions. And third-party apps carry their own set of issues. For employers, understanding their telehealth coverage must be part of their overall health care strategy.

Learn more about telehealth at Kaiser Permanente >

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  • 1

    “Current Telemedicine Technology Could Mean Big Savings,” MarketWatch, Aug. 11, 2014, marketwatch.com/press-release/current-telemedicine-technology-could-mean-big-savings-2014-08-11.

  • 2

    “The 2016 HealthMine Digital Health Report: State and Impact of Digital Health Tools,” HealthMine, 2016.

  • 3

    Carol K. Kane and Kurt Gillis, “The Use of Telemedicine by Physicians: Still the Exception, Rather Than the Rule,” Health Affairs, December 2018, healthaffairs.org/doi/10.1377/hlthaff.2018.05077.

  • 4

    “Telehealth Index: 2017 Consumer Survey,” American Well, americanwell.com/resources/telehealth-index-2017-consumer-survey-2.

  • 5

    “By the Numbers: The Conflict Between Work and Health,” Zocdoc, October 11, 2016, zocdoc.com/about/news/unsick-day-by-the-numbers.

  • 6

    See note 5.

  • 7

    “Fact Sheet: Telehealth,” American Hospital Association, February 2019, aha.org/system/files/2019-02/fact-sheet-telehealth-2-4-19.pdf.

  • 8

    “Value-Based Insurance Design Model (VBID) Fact Sheet CY 2020,” Centers for Medicare & Medicaid Services, January 18, 2019, cms.gov/newsroom/fact-sheets/value-based-insurance-design-model-vbid-fact-sheet-cy-2020.

  • 9

    “Remarks by Administrator Seema Verma at the Alliance for Connected Care Telehealth Policy Forum for Health Systems,” Centers for Medicare & Medicaid Services, November 15, 2018, cms.gov/newsroom/press-releases/remarks-administrator-seema-verma-alliance-connected-care-telehealth-policy-forum-health-systems.

  • 10

    Shara Tibken, “Why 5G Is Out of Reach for More People Than You Think,” CNet, October 25, 2018, cnet.com/news/why-5gs-out-of-reach-for-more-people-than-you-think.

  • 11

    Megan Molteni, “Telemedicine Could Be Great, if People Stopped Using It Like Uber,” Wired, March 6, 2017, wired.com/2017/03/telemedicine-great-people-stopped-using-like-uber.

*”83% of patient issues are resolved in 1 telehealth visit,” Assessment of the Feasibility and Cost of Replacing In-Person Care with Acute Care Telehealth Services, Dale H. Yamamoto, Red Quill Consulting, December 2014, connectwithcare.org/wp-content/uploads/2014/12/Medicare-Acute-Care-Telehealth-Feasibility.pdf.