Telemedicine Technology Could Mean Big Savings for Employers, Insurers

Telemedicine could potentially deliver more than $6 billion a year in health care savings to U.S. companies, but only if the technology is widely-adopted.

According to analysis by global professional services company Towers Watson, achieving this level of savings would require all employees and their dependents to use the technology-enabled interactions available today in place of face-to-face visits to the doctor, urgent care center or emergency room for appropriate medical problems.

“While this analysis highlights a maximum potential savings, even a significantly lower level of use could generate hundreds of millions of dollars in savings,” said Dr. Allan Khoury, 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.”

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Thirty-seven percent of employers surveyed said that by 2015 they expect to offer their employees telemedicine consultations as a low-cost alternative to emergency room or physician office visits for non-emergency health issues, and another 34 percent are considering offering telemedicine for 2016 or 2017. Currently, 22 percent of employers offer such programs. The percentage of employers offering telemedicine is expected to rise from 22 percent to 37 percent, a 68 percent increase.

These percentages are based on Towers Watson’s 2014 Health Care Changes Ahead Survey of U.S. employers with at least 1,000 employees.

It is expected that the use of telemedicine will continue to increase, driven by lower costs of telemedicine technology itself and by more insurance companies supporting telemedicine to cut costs. However, even among employers that offer such programs, utilization is low. Khoury says that vendors generally claim per-member utilization of less than 10 percent.

“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,” said Khoury.

Source: Towers Watson