Telehealth services: Are they truly cost effective?

20170309070000, Brenda Lau
If telehealth services are implemented wisely, it still represents a cost-effective way for patients and insurers.
Innovative technology permeates into daily life at every turn; from Siri to Snapchat; Youtube to Yelp; Paypal to Photoshop. So it comes as no surprise when healthcare is also technologically revolutionised in the form of telehealth.

Encompassing the use of information technology to provide health-related services from a distance, telehealth includes instruments, apparatus, machines and communication software. For instance, a device that controls a pacemaker from a distance or a mobile app that is able to diagnose certain types of diseases.

The technology has existed for more than a decade, but has only recently boomed due to the availability of smartphones and laptops. Many countries have adapted the service, including Singapore - in 2015, the Ministry of Health (MOH) of Singapore issued guidelines to govern the delivery of telehealth services.

Singapore's expansion of telehealth services for the future

Much recently in September 2016, the Health Sciences Authority (HSA) also issued draft guidelines on the classification of telehealth devices as medical devices. The guidelines are expected to be finalised this year.

In addition, Singapore's recent 2017 budget has included allocations for nursing homes and GP clinics across the country adopt digital ways. Electronic medical record systems, real-time Integrated Health Information Systems and an automated inpatient pharmacy have already been implemented in hospitals.

The country is now looking to expand telehealth services for discharged patients and the elderly in the community especially when it foresees an ageing population. Focus has also been put on customised robotics to improve patient care and address manpower shortages, providing a better working environment.

However, although telehealth is convenient for patients - especially the elderly - and the possibility that it may cost less than an in-office visit is attractive to employers and insurance companies, a new study suggests that it does not necessarily reduce healthcare spending.

Rather, the increased convenience and easy access to a physician, prompts patients to seek care for minor illnesses, which they usually would not visit a doctor's office for.

Telehealth visits not as cost-effective as thought to be

The study noted that on average, a telehealth visit costs about USD79, compared to USD146 for an office visit, but a virtual visit also generates additional medical use.

"What we found is contrary to what [telehealth] companies often say," said Lori Uscher-Pines, one of the study’s authors who is a policy researcher at the Rand Corp., a nonprofit think tank based in Santa Monica, California. "We found an increase in spending for the payer."

The team found that only 12% of telemedicine visits replaced a physical visit, whereas 88% represented new demand. This was based on a 2011-13 utilisation data of 300,000 people enrolled in the Blue Shield of California Health Maintenance Organisation.

They only looked at virtual visits for respiratory illnesses, including sinusitis, bronchitis, pneumonia and tonsillitis, among others, as a respiratory illness often result in more follow-up appointments, lab tests and prescriptions, which usually increases spending in the long run. They recognised this as a limitation.

For telehealth physicians, this translates into possible liability concerns, thus many schedule a face-to-face appointment with a doctor after a virtual visit, the study stated. This then contributes to increased spending.

The researchers estimate that annual spending for respiratory illnesses increased about USD45 per telehealth user, compared to patients who did not undergo virtual consultations.

Telehealth still a way to save costs if implemented wisely

Many other studies however, find that telehealth decreases overall healthcare spending and Uscher-Pines said that the results of these studies were not surprising. The other studies also found that telehealth triggers new use and additional costs, with 58% representing new demand.

However, Uscher-Pines said if telehealth services would replace only the costlier visits and insurers could increase telehealth visit costs for patients to prevent unnecessary use, it still represents a pathway to cost savings as they are more affordable per visit than a trip to a physician's office.

The recognition of the value of virtual doctor visits is also needed and a way to increase the value of these visits is to target specific groups of patients, such as those who visit emergency rooms for less urgent illnesses, the researchers said.

"You could take these people in the emergency department and offer them this cheaper option. That would be a direct replacement," Uscher-Pines said. MIMS

Read more:
Experiences in Telemedicine
Telepharmacy in Singapore: A Boon or a bane?
Help your patients connect with you in the era of digital healthcare

Sources:
http://www.lexology.com/library/detail.aspx?g=def79694-287e-423a-b623-b56c518b2cfa
http://www.tnp.sg/news/views/transforming-healthcare-towards-future
http://californiahealthline.org/news/are-virtual-doctor-visits-really-cost-effective-not-so-much-study-says/