Video visits, telemedicine today are like retail clinics were in the 1990s

By Jonah Comstock
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teladocacquisitonAs telemedicine continues to grow in adoption and support, two of the most high profile telemedicine CEOs -- Teladoc's Jason Gorevic and Doctor on Demand's Adam Jackson -- shared the stage at the Digital Healthcare Innovation Summit with Dr. Allan Khoury, a Towers Watson senior health management consultant with a focus on the burgeoning field. The panel discussed telemedicine adoption and the sense that the field has finally arrived in important ways, but also shared some recent and forthcoming return-on-investment data.

"We’ve seen really phenomenal growth," Gorevic said. "Over 100 percent growth this year. Yesterday, we did 1,200 telemedicine visits, with an average response time of 11 minutes. We’ll do more than a half a million telemedicine visits next year. The data is pretty clear there’s this massive wave building and I think we're really just at the beginning of that wave."

Khoury likened the current state of telemedicine to the state of urgent care in the 1970s and retail clinics in the 1990s. 

"In the 1970s we had urgent care," he said. "The medical establishment said ‘sure, it’s convenient, it decreases costs compared to emergency room. But what about continuity of care? What about quality of care?’ Now there’s 10,000 urgent cares in the country and they’re part of the medical establishment. Convenient care went through the same transition and there were the same comments. ... Now we have publications that show convenient care doesn’t disrupt continuity and has good quality, and there are 1,500 convenient care centers in the country. When you look at telemedicine the comments are the same. Everyone believes it’s unbelievably efficient, it saves money. It’s hard to imagine it won’t follow the same pathway as other innovative ways to deliver healthcare. "

Gorevic talked about two recent ROI studies Teladoc has been involved in. In one, the Rand Corporation evaluated data from 375,000 CalPERS members whose health plan included telemedicine through Teladoc. They found that there was no evidence of misdiagnosis and that people who visited a doctor in-person were twice as likely to need a follow-up visit as people who used video visits. People who went to the emergency room were three times as likely.

"It turns out that not only is it more efficient care, but in fact everything points to it being highly effective and very likely even more effective in many cases than in-person care for the same type of thing," Gorevic said.

Teladoc is also in the process of publishing a large matched pair study by a Harvard researcher, Gorevic said.

"He found 25 percent of the people who used our services would have ended up in the emergency room," he said. "So that’s a massive impact. And the second thing he found -- exactly what the RAND study did — there’s a much higher propensity for follow-up care at a traditional site as a telemedicine video. He found the savings was about $700 every time someone uses the Teladoc service. And that’s way more than we expected it to be."

Jackson's data showed that for Doctor on Demand, users saved anywhere from $7 to $15 for every $1 spent when they used the service, which charges a flat $40 monthly rate. Finally, Khoury shared some data Towers Watson gathered from claims analysis on telemedicine services.

"We took a pretty aggressive, even cynical look at cost savings from telemedicine, with some pretty sophisticated assumptions," he said. "We looked at ICD codes and we found that 15 percent of ER visits are potentially divertible to telemedicine. But we found that those ER visits might cost $700, not $1,400. So we put these kinds of corrected numbers into our ROI model. But even with this somewhat aggressive look we found that for a typical employer, if 7 percent of employees or dependents use a telemedicine service, you’ll hit an ROI of 1. More than that, you’ll save more than 1."

He said that with such a low adoption threshold to see savings, employers should -- and likely would -- adopt telemedicine measures for their employees.

"We tell employers, this is very low risk," he said. "You will save some money. Maybe not enough to take two points off your medical care cost, but you will save some money and the 20 percent of employees who use this will love you for having this in place. Basically, by the end of this year a third of employers will be offering this service.  What we found, right now, if you can do telemedicine, if you can see video, employers can save $6 billion. That’s 15 percent of ER visits, 15 percent of primary care visits, and 37 percent of urgent care visits because that’s all about upper respiratory infections on evenings and weekends."