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Cost Containment Strategy #2: How Telemedicine Creates Cost Savings

By Edward Rittenberg, CFP ®  

Year after year, our clients ask us to help them evaluate opportunities to contain benefits costs while maintaining valued coverage and continuity for employees—the benefits balancing act. While there is no silver bullet to solve these employer woes, there are cost-containment strategies you should consider, with the expert guidance of a trusted benefits consulting partner. 

In this blog series, we’ll explore several of these benefits cost-containment strategies that are currently available in the Middle Tennessee marketplace.

Telemedicine 101

Telemedicine uses technology to facilitate communication between a doctor and patient, who are not in the same physical location, to conduct evaluation, diagnosis and treatment. Also referred to as “virtual visits,” telemedicine has gained traction over the past 15 years, and by 2020, there could be an estimated 45.6 million virtual consultations performed in the U.S.

Telemedicine has continued to increase in popularity with employers and employees because it provides:

  • Remote Access: Access to health care in remote, rural, and underserved areas, as well as access for employees who frequently travel out of state.
  • Routine Care Treatment: Diagnosis and treatment for routine care illnesses like colds, flu, allergies, pink eye, and upper-respiratory infections.
  • Around-the-Clock Care: Physicians available 24/7/365, allowing employees to access care when they need it.
  • Increased Productivity: Patients avoid taking time off work for doctor appointments, which reduces absenteeism and increases productivity.

How Telemedicine Creates Cost Savings

Telemedicine offers employers potential for significant savings compared to urgent care and emergency department visits. On average, telemedicine prices range from approximately $0.50 to $6 per employee per month for access plus $40 per visit. According to UnitedHealthcare, the cost of a video-based virtual visit is less than $50. Compare that to the costs for comparable services at an urgent care facility at $160 or the emergency room at $650.

According to Teladoc, a telemedicine provider with the largest market share, around 70 percent of telemedicine consultations take place before and after primary care provider (PCP) business hours or on weekends when unnecessary non-urgent emergency room and urgent care clinic utilization is at its highest. Ninety-two percent of telemedicine consultations are resolved after the first call between the patient and physician. The most frequently prescribed medications via telemedicine services are antibiotics used to treat illnesses like the flu, sinus infections, or pink eye. These stats provide evidence that a telemedicine program can be a complementary addition to your employer-sponsored plan.

While telemedicine cannot replace the in-person relationship with a primary care provider, telemedicine services can help ensure your employees who need non-critical medical attention after hours, or even when they are traveling out of state, receive the care they need in a convenient, immediate manner.  The benefits for you, the employer, may be felt in decreased absenteeism and increased productivity, if employees are able to return to work more quickly feeling better.

Telemedicine Considerations

While telemedicine has many benefits, there are several potential drawbacks you should be aware of and that should be communicated to employees as a part of a telemedicine program.

  • Physical Testing/Diagnosis: Though virtual visits can be thorough, in-person diagnoses and tests often provide more accurate data for diagnoses and treatment.
  • Continuity of Care: A patient’s primary care physician (PCP) will not be alerted of any tele-visits. The only way the PCP will learn about the care received is if the patient tells his or her PCP.
  • Health Savings Account (HSA) Compliance: If offering telemedicine to employees at no cost, consider whether you have an HSA, as you’ll need to follow specific guidelines to remain compliant. To remain compliant, ensure you are offering telemedicine at a reasonable market rate, and speak with your benefits consultant.

Before utilizing an independent telemedicine company’s services, encourage your employees to investigate whether their PCP offers telemedicine. Several local PCPs now offer this service at competitive prices.

Implementing a Successful Telemedicine Program

There’s a good chance your current group health plan already covers telemedicine services. Many carriers have adopted telemedicine in the past few years, but we find that many companies have extremely low utilization among employees. As with most employee benefits offerings, telemedicine utilization is directly correlated to employee awareness and education of a telemedicine program. If employees understand when and how to use your telemedicine program, you may very well see utilization climb steadily and the cost savings reflected over time.

If you’d like to understand the impact of implementing and promoting a telemedicine program as a part of your company’s benefits offerings, it is best to work with a consultant who will run a telemedicine financial impact analysis as well as help you communicate the benefits to your employees.

Telemedicine is one of many cost-containment strategies you many want to consider. Interested in learning more? Contact Paradigm Group to discuss telemedicine and other cost-containment tactics to control your health care spend.

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