Can Telemedicine Cut Your Health Care Costs?

December 15, 2016

Some call it “Docs in a Box,” and it’s already reducing health care costs dramatically. Telemedicine is new technology that lets doctors see patients via Skype-like computer programs. Millions of Americans have used telemedicine already, and up to 70 percent of doctor visits can be handled this way at a much lower cost than in-person visits.

Telemedicine Provides Health Care by Remote Delivery

Do you hate going to the doctor? You aren’t alone. Often, you have to drive miles to get to the office, spend more time looking for parking, then wait in the reception room for what seems like hours before you get face-to-face with your physician. 

Today, you can get many health care services in the privacy of your own home or at a site near you thanks to telemedicine — the remote delivery of medical services. The technology used to bring you telemedicine includes Internet, wireless, satellite and telephone media. 

Telemedicine has been around for a few years and is no longer just a small component of health care. The U.S. has some 200 telemedicine networks, with 3,500 service sites. Nearly a million patients use remote cardiac monitors, and the Veterans Health Administration delivers hundreds of thousands of consultations annually using telemedicine.

Cost Savings from Telemedicine are Documented

In the last few years, a number of scientific studies have been conducted to research the cost-effectiveness of telemedicine. Each study has determined that telemedicine saves money — for patients, health care providers and insurance companies. 

For example, UPMC Health Plan, headquartered in Pittsburgh, Penn., made efforts to convert to patient-centered medical sites. Over a two-year study, the plan achieved significant savings in medical and pharmacy costs, as well as fewer hospital admissions and emergency room visits. 

A second study was conducted of the Hospital at Home model used by Presbyterian Healthcare Services in Albuquerque, New Mexico. Under this program, patients were given acute hospital-level care in their own homes. Researchers found that the Hospital at Home program saved 19 percent of costs compared to patients with similar problems treated in hospitals.

Even Greater Cost Savings Have Been Documented Abroad

The 19-percent savings shown in research studies of telemedicine in the U.S. are dwarfed by the savings documented in other countries. For example, the use of telemedicine in India has saved up to 90 percent of the cost of caring for similar patients in the United States when treating those with severe and chronic kidney disease. 

One treatment option is peritoneal dialysis, a home-based procedure where a tube is inserted permanently into a patient’s stomach and flushed out regularly. The alternative is hemodialysis in medical centers, preferred in the U.S. because the tube can cause infections and patients may not have access to doctors to treat the infections.

Per-patient hemodialysis costs in America for chronic kidney disease is $180,000. In India, patients are treated at home with peritoneal dialysis with excellent results. Their care is overseen using a unique remote monitoring system, and the average cost of treatment is reduced to $12,000 per patient.

Doctors and Patients Question Level of Care

While many are enthusiastic about the use of telemedicine, others fear that in a frenzy to reduce patient costs, health care personnel and insurers may use it inappropriately. 

Dr. Carl Spengler, an emergency room physician at the Governor Juan F. Luis Hospital & Medical Center in St. Croix, Virgin Islands, expresses cautious approval of telemedicine. 

“Telemedicine does have its place,” Spengler says, “especially in isolated, underserved areas. But the patients, the doctors and especially the companies providing this type of medicine need to know its limitations and be sure not to exceed them.” 

Spengler notes that telemedicine is only appropriate for patients who have no need for emergency treatments or interventions. Used appropriately, he says, telemedicine gives patients a convenient, fast way of meeting with medical providers, while avoiding overbooked primary care doctors and emergency departments. 

“As time goes on,” Spengler says, “telemedicine will evolve in more ways than we can imagine, improving the medical safety net for the general public.”