Telemedicine A Tool For Employers To Reduce Cost

Telemedicine services can save employers a lot of money, but their costs aren’t always straightforward. How can companies then make the most of them while mitigating potential risks?

Telehealth continues to be one of the fastest-growing trends in the aftermath of the COVID-19 pandemic. The telehealth market proved vital by expanding access to care, decreasing disease exposure, and reducing patient demand on facilities throughout 2020.

But just how much has telehealth grown over the last two years? According to data provided in a 2021 study by CivicScience, “Nearly 4 in 10 American adults (39%) have now used remote healthcare services.” This is an exponential increase compared to the 11% reported back in the 2019 survey conducted by McKinsey & Company. It signals an irreversible trend that was accelerated by the unprecedented events of the last year.

What does this mean for employers?

It means saving time and money. Employers can reduce costs and cut down on missed work time related to health issues by providing their employees with telehealth services that allow them to see a physician virtually instead of going to the ER or visiting the doctor for non-emergencies. It also means helping their staff in remote locations to access healthcare benefits they wouldn’t typically have.

Unfortunately, depending on the telehealth provider, there could be hidden costs associated with their benefits package that reduce the value of the telemedicine program for the company and staff alike. Those hidden costs create a problem for employers.

That’s because telemedicine pricing varies widely between providers and calculating their actual cost and benefit can be tricky. Telehealth and telemedicine are often and erroneously used as synonyms. The reality is that they are two distinct services which can cause confusion among company owners.

What’s the difference between telemedicine and telehealth?

To keep it simple: telemedicine is a subset of telehealth.

Whereas telehealth is a broad term that encompasses any health care delivered via telecommunications technology, telemedicine only refers to remote clinical services. And if this still sounds too complex, simply try thinking about telemedicine as a remote doctor’s visit, where a physician uses a telecommunications platform to provide care to a patient in a distant location.

Rather than physically visiting a doctor’s office or hospital, telemedicine allows people to speak with a healthcare provider in real-time using video, email, and online portals about their symptoms or medical problems. Telehealth’s scope is much broader, including apps that allow patients to upload food logs, hypertension, and blood sugar levels, view test results, make appointments, and even request medication refills.

Does telemedicine help employers control health insurance costs?

Yes, telemedicine can assist employers in lowering the expense of their healthcare plans.

According to a 2017 study, the average cost of a telemedicine consultation was $79, while a traditional doctor’s appointment could gravitate around $146 (and a staggering $1,734 for an emergency room visit). As a result, insurers are not required to pay providers as much for telemedicine claims. These reductions enable insurance companies to maintain premiums lower for both employers and employees, resulting in decreased premium payments for both parties.

However, there are various elements to consider when determining the actual cost of telemedicine. For example, after rolling out telehealth or telemedicine benefits with a copay, many employers have realized that to encourage their employees to use the services they must completely subsidize or waive the fee. Low-wage workers had a hard time justifying paying $40 or $50 on a phone or computer call, but they decided to use it because their employer subsidized it.

In other words, employees’ willingness to use Virtual Healthcare Services is a crucial deciding factor. When it comes to changing the staff’s attitude toward telehealth, it mostly comes down to making everything as easy and accessible as possible. Considering the staff’s preferences and willingness by age, race, and health status will be critical to deciding which telehealth services are most appropriate and for whom.

Other aspects to consider

Employers should look into usage limits (such as potential additional fees depending on the length of the telemedicine consultation) and ask if there are any onboarding fees or miscellaneous costs. And this is, perhaps, the most critical aspect to consider. No one likes hidden fees, but as employees become more comfortable using telehealth technology after the pandemic, they will ask for enhanced telehealth coverage.

And since health insurance group plan premiums can be expensive for small to mid-sized companies, employers appreciate any method to keep them in check. In 2019, the average annual premium for an employer-sponsored family plan was $20,576; businesses typically paid roughly $14,561 for each family plan employee. At that price point, even a slight decrease in premium can save employers a lot of money.

Telemedicine: What does the future hold beyond the pandemic?

Large companies have increased their digital health benefit offerings and it seems that virtual care is bound to play a more significant part in the future. Of course, this has a lot to do with the fast-paced adoption rate of telehealth in general. From simple food logs to remote chronic-condition management, employees appear to be moving away from being reactive to more hands-on with preemptive medicine built around telehealth services.

And of all telehealth services, the ones related to mental health are taking center stage. Undoubtedly fueled by the COVID-19 pandemic, the preexisting mental health crisis in the US has made younger employees, in particular those between the ages of 18 and 24, more open to using emerging mental telehealth solutions, such as apps and online tools, than the average consumer.

Looking beyond 2021, the use of mental health services in America is predicted to be an inflator of medical expenses; it could also result in long-term savings in total health expenditures. Besides these financial implications, companies should consider incorporating mental telehealth services into their benefits packages because this has been somewhat of a blind spot for them. According to a PwC’s Health Research Institute survey, only 8% of employers reported the companies they work for offered these kinds of services.

As employers continue to embrace digital health solutions as part of their benefits package, proven demonstrable outcomes will have the most staying power with employees. Whether the offered telehealth services can be tailored to meet their needs, whether their medical information is secure, whether these solutions their employers provide can connect to other services, the outcome remains the same: telehealth will explode in the years to come.

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