Telemedicine, whether offered by insurers, hospitals or direct-to-consumer, continues to grow with more and more organizations offering virtual visits to patients. It’s a technology with broad support, one of the few things that seem to be able to unite both sides of the political aisle, for instance.
But that doesn’t mean everyone is in agreement about the particulars of the technology: how and when it should be used, how it should be reimbursed and what are realistic expectations for cost savings.
At the Connected Healthcare Conference next week in Boston, Dr. Andrew Watson, the current president of the American Telemedicine Association and a surgeon and vice president at UPMC, will go head to head with Dr. Ateev Mehrotra, an associate professor of health care policy and medicine at Harvard Medical School and a hospitalist at Beth Israel Deaconess Medical Center, in a debate on telemedicine. The question? Whether the technology’s costs outweigh its benefits.
Does overutilization cancel telemedicine savings?
“Telemedicine savings are very interesting,” Watson told MobiHealthNews. “The main place people save is on the side of cost avoidance. So if you go to a face-to-face live video for urgent care, you don’t have the incumbent expense of having to bear a provider and a facility fee — you can be more efficient seeing your patients, and our own analysis has shown you save about $120 per patient per encounter.”
Mehrotra, who has done policy research on telehealth, thinks that in many cases the technology doesn’t produce savings, for a couple of reasons.
“I’ve really tried to challenge this idea that telemedicine is going to save money,” he said. “In some prior work, we have focused on direct-to-consumer telemedicine. We argue that telemedicine is increasing healthcare spending, not decreasing it.”
One reason it might not save money is because making care easier to access can lead to more people accessing it. If all those people have serious conditions that would otherwise have required an office visit, this is a good thing. But, Mehrotra says, that’s not how it pans out.
“We have seen that 90 percent of telemedicine visits for direct to consumer are new utilization — people who otherwise would not have gotten care,” he said. “The majority of those conditions are for acute respiratory illnesses, sinusitis, bronchitis, ear infections, etc. The clinical data says that antibiotics or anything else we provide in a clinical setting will not make the patient get better sooner. They are getting no value from coming to that visit, except the psychological value. Which I don’t deny, that’s useful to the patient, but from a societal perspective when we say, is this additional $80 visit going to make this person live longer or improve the quality of their life? The answer is no.”
Watson says data from UPMC — the second largest payer-provider in the US — hasn’t shown that to be a real concern.
“That’s the old fallacy of supply-induced demand,” he said. “People always bring that up, that if you turn it on they will come. That has not been shown to be true. If you look at the history of telemedicine billing, of claims, of the total cost of care, it really hasn’t being shown that there has been a significant jump. That was much more of a 2005, 2010 argument and the literature will show. And the payers certainly know as well; they’re not having the same issues as they may have thought.”
Parity laws and value-based care
Another reason telemedicine might not save money is because of the increasing popularity of telemedicine parity laws, which require that payers reimburse for a telemedicine visit at the same rate as an in-person visit. Mehrotra said those laws are a big mistake from a savings perspective.
“Telemedicine parity laws, at least the form that say ‘Hey you should reimburse this telemedicine visit at the same rate as an in-person visit,’ make it very difficult for telemedicine to save money,” he said. “When people talk about teledermatology, for example, they say an in-person dermatology visit costs $180 and a teledermatology visit costs $90, that’s a 50 percent savings. And that’s true, that will accumulate, but if you have telemedicine parity laws you make it impossible to save money in that manner.”
But all of that mainly applies to the fee-for-service world. Part of Watson’s defense of telemedicine is that his organization, UPMC, is one of the largest payer-providers in the US and is largely value-based.
“We in the field of remote monitoring look at utilization of care and also the total cost of care,” he said. “And we have confidence that remote monitoring will bring those down as well, because we truly are avoiding the incentives for billing and incentives for spending by avoiding hospital visits for observations and the like. So it’s really important for value-based care. These types of risk arrangements or aggregated costs can be optimized using telemedicine or care at home.”
Other criticisms of telemedicine
Mehrotra isn’t opposed to telemedicine in general, of course. He just feels there are some widely-held beliefs about the technology that need to be questioned. Among those is the question of savings, but also the general quality of care.
“While I think that there’s a lot of evidence that telemedicine can be equal quality in many circumstances, I think people have expanded that too far, and at least in some work that we have ongoing we’ve documented that in D2C telemedicine there are serious quality gaps in terms of antibiotic prescribing,” he said. “There are circumstances where it isn’t working, so we need to identify what are those circumstances.”
Additionally, pro-telemedicine arguments tend to focus on rural and underserved populations, he said, but the data about who is really benefiting isn’t consistent with that, and that in turn contributes to overutilization.
“You hear lawmakers, they say ‘telemedicine is going to increase access for underserved patients.' Or employers say ‘telemedicine’s going to be great because there will be employees who live in rural areas who get care.’ But when you offer it to everybody, the vast majority of people who get telemedicine visits live in urban areas close to doctors," he said. "If there’s a target population where you want to increase access for, offer it to that population. Because as soon as you offer it to everyone, you’re going to have this problem of induced demand or the woodwork effect, which is that people who otherwise would not have sought care will get care.”
For Watson’s part, he believes that most of the opposition to telemedicine he sees comes not from academic arguments like Mehrotra’s, but from the industry’s inherent fear of change.
“We’ve been down this road before. We’ve been down this road in multiple different areas,” he said. “If you look at antibiotics, if you look at DNA, if you look at hand-washing, if you look at laparoscopy, if you look at EHRs, innovation came along and people said no to it. ... People are hung up on the cultural change moreso than the value. … These days it’s easier to have the conversation, but there’s still an enormous amount of resistance to cultural change, which eventually will die off like everything else. People also said ‘no’ to electric cars, by the way.”
Hopefully the debate can highlight for both sides some areas in which to move forward.
“If I came to you and said ‘Drugs are good or bad’ or ‘Surgery’s good or bad’, you’d say ‘Which surgery? Which patients? Which drug?’” Mehrotra said. “And I think we need to move to that conversation with telemedicine. Understanding when it’s really valuable for improving clinical outcomes and when it’s not. Because that’s what the policy makers want to know about, but we’re not giving them the answers.”
Partners Chief Digital Health Officer Alistair Erskine will moderate the debate, which will be held Thursday, October 18 at 4:40 p.m. on the Commonwealth Main Stage.
Connected Health Conference
Join PCHAlliance and the Partners Connected Health Symposium in Boston Oct. 17-19.