Telehealth use led to modest care improvements, spending increases

Though telehealth utilization resulted in improvements in some healthcare utilization and quality measures, it was also linked to a 1.6 percent increase in healthcare spending, according to new research published in Health Affairs.

Amid the ongoing debate about the future of telehealth policy and reimbursement, researchers from Harvard University and  RAND Corp. sought to assess telehealth’s effects on healthcare utilization, quality, and spending. Telehealth usage has dropped from the pandemic’s peak in 2020 but remains higher than pre-pandemic levels. Data from Epic Research shows that telehealth use encompassed less than 1 percent of all visits in the last three quarters of 2019, jumping to 31.2 percent in the second quarter of 2020 and then dropping to 5.8 percent in the third quarter of 2023.

Regulatory flexibilities that spurred greater use of telehealth during the pandemic are set to expire at the end of the year, placing rising pressure on lawmakers to create more permanent policies that support telehealth access while minimizing risk.

To evaluate the link between greater telehealth use and utilization, spending, and quality, researchers compared data from traditional Medicare patients receiving care at health systems that used more telehealth services during the COVID-19 pandemic with data from patients in health systems that provided more in-person services. They used the National Bureau of Economic Research’s 2018 Health Systems and Provider Database to identify health systems, dividing them into quartiles based on telehealth use in 2020.

The researchers assigned 5.51 million beneficiaries with continuous enrollment in traditional Medicare in 2019 to one of 576 health systems.

In 2020, patients assigned to health systems in the highest quartile of telehealth use, or high-telehealth health systems, had an average of 2.5 telemedicine visits per capita, translating to 26.8 percent of all visits. This is higher than the average of 0.7 telemedicine visits per capita, or 9.5 percent of visits, among patients assigned to health systems in the lowest quartile of telehealth use, referred to in the study as low-telehealth health systems.

Compared to patients assigned to low-telehealth health systems, researchers observed an increase of 0.21 visits per patient per year in total outpatient visits among patients assigned to high-telehealth health systems from baseline to the pandemic period, representing a relative increase of 2.2 percent. Based on this finding, researchers estimated that 16.7 percent of the total outpatient visits constituted additional utilization. According to the researchers, this implies “that the remaining 83.3 percent of telemedicine visits substituted for in-person visits.”

Additionally, researchers found that the relative change in outpatient visits from 2019 to 2021-22 between high- and low-telehealth health system groups was more significant among patients without chronic illness or frailty.

Further, the study shows that patients assigned to high-telehealth health systems had a decrease of 14.4 non-COVID-19 emergency department (ED) visits per 1,000 patients per year, representing a 2.7 percent relative decrease compared to those assigned to low-telehealth health systems. The high-telehealth health system group of patients also experienced increases in drug adherence for metformin and statins.

However, there were no significant changes in imaging services or laboratory tests per capita per year between patients in both groups.

The study revealed that telehealth does affect healthcare spending, albeit slightly. Spending for patients of high-telehealth health systems increased by $248 in 2021-22, a relative increase of 1.6 percent, compared to spending for patients of low-telehealth health systems. The study noted that the increase was driven largely by inpatient admissions and pharmaceuticals but offset by decreases in outpatient hospital spending.

“Given the small improvements in access and quality (in particular for chronic disease medications), combined with modest increases in spending along with patients’ and clinicians’ preferences, we believe that it will be difficult to justify a return to restricting telemedicine payment in Medicare,” the researchers concluded.