Direct-to-consumer telehealth services empowers spending via more utilization

In spite of the fact that direct-to-consumer telehealth services might be growing access to care through the presence of virtual care encounters, the potential cost savings from the technology isn’t being identified and is truly driving up healthcare spending by serving new care. This is what the finding of RAND Corporation researchers who observed claims information for 300,000 beneficiaries enrolled in a health policy from CalPERS

The researchers write in this month’s issue of the journal Health Affairs, “We estimated that 12% of direct-to-consumer telehealth visits replaced visits to other providers, and 88% represented latest utilization.”
In accordance to Scott Ashwood, associate policy researcher at RAND and lead author of the study, “Most visits turn out to be new visits,” instead of replacing what otherwise would be traditional patient encounters with clinicians. And because several visits are “new use,” on average it really increases the time clinicians spent with patients, says Ashwood.
Furthermore, researchers discovered that net annual spending on acute respiratory sickness increased $45 each telehealth user. As an outcome, the authors assert that “direct-to-consumer telehealth might increase access by making care easier for few patients, but it might also increase utilization and healthcare spending.”
Ashwood adds, “The convenience is something that consumers are actually responding to. Direct-to-consumer telehealth appears to be increasing charges for these conditions.”
RAND researchers reported similar findings about retail clinics last year—they assumed that 58% of visits to retail clinics for low-severity sicknesses were new uses of medical services, instead of substitutes for visiting a doctor’s office or ED (emergency department).
Lori Uscher-Pines, co-author of the new report and a policy researcher at RAND says, “Given that direct-to-consumer telehealth is even more convenient in contrast to traveling to retail clinics, it might not be surprising that an even greater share of telehealth services depict new medical use. There might be a dose response with respect to convenience and use—the more convenient the site, the lower the threshold for seeking care and the higher the use of medical services.”
Ashwood concludes, “If you make care convenient, then individuals are going to utilize it. Giving individuals access to care—by itself—is not bad. But, if you also need to save money, then you are going to require thinking creatively about how to do that.”
In accordance to the suggestions of Ashwood, the insurers increase the cost of co-pays for telehealth services to make clients “think twice about picking up the phone if they merely have a sore throat.” He claims that another strategy could be to target particular populations like motivating people who’re high consumers of ED care to use direct-to-consumer telehealth instead.