The use of telemedicine in employer-sponsored health coverage is relatively new and in my research for an International Foundation member, I found some case studies and vendor reports on employer ROI. Below, I share a resource list of reported return on investment (ROI) for employers that implemented telemedicine, a.k.a. telehealth. While these provide a starting point, I hope to see more comprehensive and authoritative research studies on telehealth ROI as telemedicine becomes more widespread.
Appropriate uses of telemedicine services include treatment for allergies, colds and flu, infections and skin problems. According to the International Foundation Employee Benefits Survey 2016, telemedicine is used as a health care cost management technique by corporations (43.8%), public employee plans (27.7%) and multiemployer plans (16.4%).
[Related: Telehealth and Telemedicine Programs | Benefit Bits Video]
Typically, ROI for telemedicine results from diverting participants’ use of more expensive kinds of health care, including emergency room (ER), urgent care and routine physician office visits, to less expensive telemedicine visits, and then comparing the costs of these health care delivery options.
[Related: Health Care Delivery Models E-Learning Course]
Examples of telemedicine ROI:
- Telehealth saves an average of $100 a visit, assuming an office visit costs $140 and a telehealth visit costs $40.
Source: Telehealth Index: 2016 Employer Benchmark Survey, American Well, January 2016.
- Comparing a telemedicine visit for a minor ailment to an in-person visit, Teladoc, a vendor, reports it achieves an average savings of $673 per claim.
Source: Telemedicine’s Price Tag Depends on Vendor Services, The Alliance, January 7, 2016.
- Discount Tire/America’s Tire saved about $192,000 since implementing telehealth, based on an average ER visit costing $1,233 average, urgent care visits at $150 and an e-visit average cost of $50.
Source: How Discount Tire/America’s Tire Uses Telemedicine, Employee Benefit News, October 5, 2015.
- Pepsi Bottling Ventures employees participated in 389 telehealth consults rather than visiting the ER or urgent care centers, saving $200,000 in health care expenses and productivity-loss avoidance in 2012.
Source: Teladoc and Pepsi Bottling Ventures Share Case Study Results Demonstrating 400 Percent ROI Using Telehealth Services, press release, October 2, 2013.
- Crawford & Company’s example illustrates cost savings to an employee with a high deductible health plan seeking treatment for a sinus infection. Assuming the employee hasn’t reached her deductible, the employee’s cost for a primary care physician visit and antibiotic prescription was more than twice as much as using telemedicine. Telemedicine would start saving money for the employer once the employee reaches her deductible and the plan starts paying coinsurance. Employer savings also result from employees taking longer to reach their deductibles.
Source: Telemedicine Helps Employees Access Care at Lower Cost, Business Insurance, June 22, 2015
These ROI figures were derived from estimating telemedicine costs between $40 and $50 per visit and comparing with $140 at a doctor’s office, $150 at urgent care and $1000+ at the emergency room. The dollar impact for your plan depends on what type of claims you’re seeing now and how many claims can be redirected to telemedicine. Communication of the benefit, participant satisfaction and access also factor in to the ROI equation.
The Information Specialist team will continue monitoring new resources on telemedicine. Looking for something specific in the meantime? Members can request up-to-date benefits information at any time and receive it within two business days.
Jenny Lucey, CEBS
Information/Research Specialist at the International Foundation