Telehealth adoption did not drive up healthcare visits, costs

Telehealth adoption was not linked to increased healthcare utilization or spending, according to a new study. The findings suggest that extending Medicare telehealth flexibilities beyond their current 2027 expiration date has low near-term spending risk.

Published in JAMA Network Open, the study examined the impact of telehealth adoption on healthcare visits and spending. Medicare telehealth flexibilities, which supported widespread telehealth adoption during the COVID-19 pandemic and after, are set to expire on Dec. 31, 2027. Although expanding telehealth access has bipartisan support in Congress, many lawmakers have expressed concerns that making the flexibilities permanent will drive up healthcare costs. 

The new research, led by the University of California, Los Angeles, aims to inform the debate on the future of the flexibilities.

For the study, the researchers used multi-payer medical claims data from MedInsight's research database. They examined data for 3.04 million individuals who participated in 120 million visits and incurred $178.4 billion in spending between 2019 and 2023.

Researchers found that telehealth visits fell 2.4% and spending declined by 0.5% during the study period. They noted that the findings "crossed the null," that is, the changes observed were not statistically significant and could be due to chance.

While the findings do not rule out small changes due to chance, they do rule out large changes, leading researchers to conclude that nationwide telehealth adoption did not result in large spending increases. Thus, continuing current telehealth coverage is "unlikely to meaningfully increase near-term spending," the researchers wrote.

The researchers also performed subgroup analyses that showed urban populations had 4.4% fewer visits and 2.3% lower spending following high telehealth adoption, versus 3.4% more visits and 3.8% higher spending among rural populations.

The findings further show 2.5% lower spending among people covered by Medicaid, 5.3% lower spending among dual-eligible individuals and 3% less spending among those with Medicare Advantage, compared to 1.1% higher spending for commercially insured individuals and 1% higher spending for Medicare fee-for-service-insured individuals.

"As telemedicine use grew, visits and spending in heavy users tracked closely with patterns in lighter users," said John N. Mafi, M.D., associate professor-in-residence of medicine at the David Geffen School of Medicine at UCLA, in the press release. "That is reassuring for anyone worried about ballooning costs, but more sobering for anyone hoping telemedicine would close longstanding gaps in access. At least so far, it looks more like a substitute for in-person care than a true expansion of it."

Anuja Vaidya has covered the healthcare industry since 2012. She currently covers healthcare IT and innovation, including artificial intelligence, digital healthcare, EHRs and interoperability.