Telemedicine's Rapid Growth Offers a Low Cost Alternative


Employers are moving quickly to implement telemedicine services -- telephonic or video access to providers -- as a low-cost, convenient alternative to an office visit for some types of non-acute care. According to Mercer's 2015 National Survey of Employer-Sponsored Health Plans, offerings of telemedicine services jumped from 18% to 30% of all large employers in 2015. And, since an additional 35% said they were considering it, another big increase is likely this year. Among the nation’s largest employers -- those with 20,000 or more employees -- 44% already offered telehealth services in 2015.

What's driving this growth? One factor may be another benefit trend: the rise of the high-deductible consumer-directed health plan. Employers have learned that the higher deductible can be a real deterrent for employees and are looking for ways to help them stretch their health care dollars. Access to telemedicine provides them with a real, and financially substantive, “shopping” choice. Where a traditional office visit might cost $125, a telemedicine visit typically costs about $40.

Then there’s the convenience factor. When you’re not feeling well, it’s nice to have the option of consulting with a physician without getting off the couch. And, in the internet era, consumers are increasingly comfortable with accessing services through their phones, tablets, and laptops.

For employers, telemedicine offers an opportunity to save as well as to provide a valuable benefit for employees. If an employee can get the help he or she needs through a telemedicine visit instead of a trip to the ER, that’s a considerable savings. But when asked about their objectives, 85% say that the most important reason for offering telemedicine is to provide employees with a more affordable, convenient source of care.

Of course, savings for both employer and employee will hinge on utilization, and, as with any new program, it will take a while for those numbers to grow. Among employers offering telemedicine in 2014, only about a fourth (26%) reported a utilization rate of 5% or higher in 2014.  

But that could grow quickly if telemedicine truly meets a consumer need. A recent article reports that a major telemedicine provider released data showing that it facilitated 575,000 remote visits between patients and providers during 2015 -- a 92% increase over 2014!

So if you’ve been taking a wait-and-see approach to telemedicine, it may be time to more seriously explore this fast-growing benefits solution.

Beth Umland
by Beth Umland

Director of Research, Health, Mercer

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