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ABSTRACT
The use of direct-to-consumer telehealth, in which a patient has access to a physician via telephone or videoconferencing, is growing rapidly. A key attraction of this type of telehealth for health plans and employers is the potential savings involved in replacing physician office and emergency department visits with less expensive virtual visits. However, increased convenience may tap into unmet demand for health care, and new utilization may increase overall health care spending. We used commercial claims data on over 300,000 patients from three years (2011-13) to explore patterns of utilization and spending for acute respiratory illnesses. We estimated that 12 percent of direct-to-consumer telehealth visits replaced visits to other providers, and 88 percent represented new utilization. Net annual spending on acute respiratory illness increased $45 per telehealth user. Direct-to-consumer telehealth may increase access by making care more convenient for certain patients, but it may also increase utilization and health care spending.
Direct-to-consumer telehealth companies such as Teladoc, American Well, and Doctor on Demand offer patients with minor illnesses around-the-clock access to a physician via telephone or videoconferencing on their smartphone, tablet, or laptop. The growth in direct-to-consumer telehealth appears to be accelerating. There were a reported 1.25 million direct-to-consumer telehealth visits in 2015,1 and Teladoc reported that in that year it provided roughly 600,000 visits-a volume almost double that of the previous year.2 A recent survey of large employers indicated that 90 percent of them plan to offer a direct-to-consumer telehealth option to their employees in 2017.3
One of the key attractions of direct-to-consumer telehealth for employers is the potential cost savings. Direct-to-consumer companies argue that they save money for health plans, employers, and patients by replacing costly visits to physician offices and emergency departments (EDs) with a $40-$50 telehealth visit. Furthermore, patients who use direct-to-consumer telehealth can avoid time and travel costs, including time off from work, that are associated with seeking in-person care.4 However, the impact of direct-to-consumer telehealth on spending has not been rigorously assessed until now.
While it is clear that the reimbursement for a direct-to-consumer telehealth visit is lower than that for a physician office or ED visit, there are two potential concerns. The first is that if the direct-to-consumer telehealth visit is more likely to result in...