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Employee healthcare costs continuing to rise? Reduce them by up to 25% with telehealth!

Updated: Oct 27, 2023

The buzz among employers is currently surrounding the fact that healthcare costs continue to rise with no end in sight. Employers must choose between skimping on quality to save on cost while risking losing their best workplace performers. When we ponder why employer healthcare costs are constantly rising, unfortunately, the reasons are very complex, and none offer a simple solution. Although no one single change can stop healthcare costs from rising, benefit designers and policymakers are exploring various programs that can be implemented to better serve employees, and lower costs for employers, all without sacrificing quality healthcare.

One program that is top of mind for employers is direct-to-consumer virtual urgent care and virtual primary care offered as a benefit to their employees

One program that is top of mind for many employers is direct-to-consumer telehealth including virtual urgent care and virtual primary care offered as a benefit for their employees. When considering the implications of employees not having access to quality care, we need to consider things like missing work for appointments, delaying medical care because of the time it takes to get into a primary care provider, and going to the ER for non-emergency visits because employees feel like they are left with no other option. These implications barely scratch the surface of why costs are rising, but luckily new technology could usher in a way to better manage employee health with on-demand services. The overarching goal of these programs would be to provide 24/7 access to quality medical care for employees which would in turn reduce absenteeism and non-emergency ER visits, both of which would save the employer money while not sacrificing the employee's quality of care or access to medical treatment.

In June of 2023, the American Journal of Medical Care aimed to prove whether the offering of direct-to-consumer telehealth would increase the use of care while lowering healthcare costs for the organization. Their findings “suggest that DTC telemedicine staffed by an academic health system and offered directly to employees reduced the per-episode unit costs and only marginally increased utilization, suggesting lower cost overall.” Although the utilization only marginally increased, there are certain ways we can aim to drive utilization among employees that we will touch on later in this post. For now, I’d like to highlight the findings regarding cost per episode. “Visits that took place through Penn Medicine OnDemand had a mean seven-day per-episode cost of $379.76 among employees and beneficiaries. This figure is far lower than the mean seven-day per-episode cost of $493.49 for non-virtual encounters. This represents a difference of $113.73, or 23 percent.” This suggests that telehealth, coupled with in-person care, could produce long-term cost savings for employers. The goal would be for providers to see patients on demand with telehealth for acute conditions like sinus infections, allergies, etc., and then streamline patients' access to in-person care if they determine it is needed.

Let’s circle back to the idea of telehealth utilization only increasing marginally. I would like to note that the findings indicate that interest and research for the telehealth program increased by 10% during this study. This suggests that people were interested in the program and the details of how to receive care but did not initiate a visit for themselves or their family members. This could be for several reasons such as the patient not needing any medical care during the time of the study, the patient wanting to see what others thought of the program, or the patient was just simply not interested in virtual health care. Although utilization itself only increased marginally, interest in the program overall increased among employees. There are a few ways to increase interest that could translate to increased utilization such as email marketing to employees that explains the program, lunch and learns on how to access the telehealth care, and so much more. If you are an employer considering on-demand telehealth, but you fear low utilization, just know there are ways to drive engagement among employees that will translate to usage.

So does it make sense economically for an employer to implement a DTC telehealth program? Absolutely! The findings in this study challenged the common misconceptions about telehealth such as the idea that better access to care would mean more expensive care with more employees using it. It has been proven over time, not just in this study but in others as well, that virtual care can be a great way to effectively manage chronic conditions and triage patients to in-person care when necessary. The integration of telehealth, even with additional in-person care on top, leads to an overall reduction in cost when compared to in-person care alone. The savings when it comes to telehealth is a chain reaction- when you eliminate the need for providers to be in a physical office and reduce their overhead costs, you are allowing payers to potentially negotiate lower rates, which will then cost the employers and employees less.

In conclusion, the findings from the UPenn study illustrate a promising future for telehealth in the workplace. Implementing solutions like this will not only give employees 24/7 access to quality care, but it will also result in substantial cost savings on medical care for employees and their dependents. The healthcare landscape is ever-changing, but telehealth stands to be one of the most powerful tools to enhance health outcomes for patients while simultaneously helping the financial wellbeing of businesses and their workforce. Look out for more studies like the one from UPenn because telehealth is here to stay, and it is proving to be a win-win for everyone involved.

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