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How Telemedicine is Reducing the Cost of Healthcare

When an employee uses the emergency room instead of visiting a primary care physician or PCP, this is a phenomenon commonly referred to as PCER–short for “Primary Care Emergency Room.”

Sometimes people don’t have a PCP–either because they live in a place with a PCP shortage, or because they believe they are generally healthy and don’t need a doctor. (I have also heard someone say they knew they weren’t healthy but didn’t want to find out the details!) Whatever the reason, not having a relationship with a family practitioner can cause this PCER phenomenon, resulting in emergency room visits for something that is not an emergency, because they do not have a regular doctor to visit. Of course, the concern with this behavior is that emergency room visits cost much more than a doctor’s office visit.

As a result, many employers provide encouragement and incentives to avoid the ER, imposing higher co-pays for ER visits than for urgent and primary care. Coupled with employee education about the true costs of these services, this is a useful strategy.
But there is another arrow in the benefits quiver that employers can use to combat the costly PCER phenomenon: telemedicine.

Talking to a medical doctor, either by phone, tablet or computer, with or without a visual component such as Facetime, can remove the need for many non-emergency ER visits. Telemedicine providers can advise individuals on home care, make recommendations for where and when to seek in-person care and even prescribe some medications. The textbook example is something like an ear infection, which can be diagnosed based on a description of symptoms, and treated with a prescription called into the nearest pharmacy. Saving not only the cost of an emergency room visit but the time and irritation factor of driving, parking and waiting, makes telemedicine a win-win for both employer and employee.

And the cost savings are significant. Every emergency room visit that is replaced with a telemedicine visit saves your health plan anywhere from $309 to more than $1,500. The average telemedicine visit costs $38 versus $114 for a face-to-face consultation. Multiply these numbers over all your employees and you can see why telemedicine is gaining traction across many industries. In 2017, close to 60% of American employers offered telemedicine as an option on their health plan.

So what’s the downside?

Believe it or not, the biggest frustration I’ve heard from employers I work with is lack of engagement. If the employer is paying to provide a service, it can be discouraging when only a small portion of workers utilize telemedicine.

Almost always, this challenge results from a lack of understanding on the employees’ part and misguided concerns related to privacy and confidentiality. These challenges are easily overcome through a dedicated communications campaign to dispel the myths and confusion surrounding the program. Once employees understand how much time and money they can save, participation and engagement will increase.

Here in Vermont, we have a PCP shortage: the perfect setting for telemedicine to flourish. Many employees live in remote areas far from the nearest clinic or hospital. Having the option to speak to a doctor at any time of day or night without leaving the house is a valuable benefit.

Skeptics of telemedicine have suggested it might lead to higher costs, as people are forced to follow up with an in-person doctor visit after the telehealth call. This duplication of cost has not played out in the real world, however. Recent studies suggest the rate of follow-up visits is similar between telehealth and in-office visits.

With all the benefits and advantages, however, telemedicine should never be a total replacement for a PCP. Everyone should regularly see a doctor. But in places where it may take weeks or months to get a face to face visit, or for instances when the clinic is closed, telemedicine rounds out an employees’ option for seeking care. As young ‘digital native’ employees enter the workforce, they expect this option as part of a total benefits package. Knowing it can be a cost-saving tool in your health plan makes telemedicine a truly worthwhile addition to your benefits line-up.

Offering an innovative benefits plan design is only the first step. Discover how to increase your employees’ utilization and effectiveness by checking out this recent post: 6 Ways to Improve Benefits Implementation and Utilization.