Telemedicine’s $6 billion savings potential

August 15, 2014

If all currently deployed telemedicine applications were to replace physician, emergency department, and urgent care visits today, it would save $6 billion annually in healthcare costs, according to a new study by global professional services company Towers Watson.

If all currently deployed telemedicine applications were to replace physician, emergency department, and urgent care visits today, it would save $6 billion annually in healthcare costs, according to a new study by global professional services company Towers Watson.

“While this analysis highlights a maximum potential savings, even a significantly lower level of use could generate hundreds of millions of dollars in savings,” says Allan Khoury, MD, a senior consultant at Towers Watson. “Achieving this savings requires a shift in patient and physician mindsets, health plan willingness to integrate and reimburse such services, and regulatory support in all states.”

Primary care physicians (PCPs) can benefit from the growth of telemedicine, experts say. “For PCPs, it can be a great way to recruit and retain patients,” Jonathan Linkous, chief executive officer of the American Telemedicine Association (ATA), told Medical Economics previously. “Think about how many people wouldn’t go to a bank that doesn’t have an ATM.” 

Learn how to integrate telemedicine into your practice

Telemedicine, also known as telehealth, is the ability to use telecommunication and technology to provide clinical healthcare. Its applications include everything from video consultation to mobile monitoring devices. Telemedicine includes real-time interactive services, remote monitoring, and “store-and-forward,” which entails capturing medical data and using electronic means to forward that information to other physicians.

 

Towers Watson’s 2014 survey of U.S. employers also found that:

  • 37% of employers said that by 2015 they expect to offer their employees telemedicine consultations as a low-cost alternative to emergency department or physician office visits for non-emergency health issues.

  • An additional 34% are considering offering telemedicine for 2016 or 2017.

  • Currently, 22% of employers offer such programs.

Lower technology costs are making telemedicine deployment more affordable, notes Towers Watson. Still, Khoury says that vendors generally claim per-member utilization of less than 10%.

“With both insurance companies and employers encouraging its use, telemedicine is going to have a growing role in the spectrum of health care service delivery. We’re also likely to see that it’s just the tip of the iceberg. Telemedicine is just one piece of a broader telehealth spectrum that includes video, apps, kiosks, virtual visits, wearable devices and other advancements,” Khoury says.

Telemedicine started as a way to connect rural PCPs with specialists. It has now morphed into a broader term and is used to describe live video appointments, real-time remote patient monitoring, storing and forwarding of diagnostic images, and mobile applications.

“Telehealth is not a distinct service, but is an enhancer and a tool for physicians,” says Mario Gutierrez, executive director of the Center For Connected Health Policy. “You are getting a triple benefit of using technology to provide better healthcare and more reach.”

A recent survey by HIMSS Analytics, which collects, analyzes and distributes health information technology data, found two-way video/webcam to be the most widely used telemedicine solution (57.8%) and most widely considered (67.1%) among those making a telemedicine investment.

As of 2012, 308,000 patients around the world were being monitored remotely by providers for congestive heart failure, chronic obstructive pulmonary disease, diabetes, hypertension and mental health conditions, according to a report from consulting firm InMedica. Those numbers are expected to grow to 1.8 million by 2016, driven by a growing need to contain costs, track disease progression, and reduce hospital readmissions, the report says.

Related:

Telemedicine: Patient demand, cost containment drive growth

Telemedicine's next big leap