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Analysis

Cost Savings for Telemedicine Estimated at $19 to $120 per Patient Visit

By Christopher Cheney  
   May 07, 2019

Diverting patients from emergency departments with telemedicine can save more than $1,500 per visit.

Telemedicine visits generate cost savings mainly by diverting patients away from more costly care settings, new research shows.

The primary market opportunity for telemedicine visits is the value proposition that they can both expand access to patients while also reducing costs compared to alternative care settings.

The new study is based on data collected from 650 patients who used the JeffConnect telemedicine platform at Philadelphia-based Jefferson Health.

"In our on-demand telemedicine program, we found the majority of health concerns could be resolved in a single consultation and new utilization was infrequent. Synchronous audio-video telemedicine consults resulted in short-term cost savings by diverting patients from more expensive care settings."

The cost of a JeffConnect visit was a $49 flat fee.

The bulk of the cost savings from the telemedicine program was generated in diverting patients from emergency departments. Each avoided emergency department visit garnered cost savings ranging from $309 to more than $1,500. Cost savings from other alternate care types was below $114 average savings per visit.

"The net cost savings to the patient or payer per telemedicine visit of $19 to $121 represents a meaningful cost savings when compared with the $49 cost of an on-demand visit. The primary source of the generated savings is from avoidance of the emergency department, as this is by far the most expensive of the alternative care options provided," the researchers wrote.

Offsetting increased utilization
 

About 16% of the JeffConnect patients surveyed said they would have "done nothing" as an alternative to a telemedicine visit—representing potential increased utilization of services. But cost savings outweigh possible higher utilization of services due to telemedicine's easy access, the researchers found.

"A substantial shift would be necessary to outpace the savings from diversion. Conversely, this population of patients who would have done nothing may represent improved access and incorporation of patients into the healthcare system that might not have participated previously. This might actually prevent more costly care further down the line."

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.


KEY TAKEAWAYS

Telemedicine can both expand access and reduce costs.

Most telemedicine episodes of care can be resolved with one visit.

Cost savings outweigh increased healthcare service utilization that is linked to telemedicine's easy access.


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