Direct-To-Consumer Telehealth May Increase Access To Care But Does Not Decrease Spending

Ashwood JS, Mehrotra A, Cowling D, Uscher-Pines L
Source: Health Affairs
Publication Year: 2017
Demographic Group: Adult
Intervention Type: Technology/innovation
Study Design: Other Study Design
Type of Literature: White

The use of direct-to-consumer telehealth, in which a patient has access to a physician via telephone or videoconferencing, is growing rapidly. A key attraction of this type of telehealth for health plans and employers is the potential savings involved in replacing physician office and emergency department visits with less expensive virtual visits. However, increased convenience may tap into unmet demand for healthcare, and new utilization may increase overall healthcare spending. We used commercial claims data on over 300,000 patients from three years (2011–13) to explore patterns of utilization and spending for acute respiratory illnesses. We estimated that 12 % of direct-to-consumer telehealth visits replaced visits to other providers, and 88 % represented new utilization. Net annual spending on acute respiratory illness increased $45 per telehealth user. Direct-to-consumer telehealth may increase access by making care more convenient for certain patients, but it may also increase utilization and healthcare spending.

Insights Results

Overview of article

  • This study assesses 2 key concerns with the use of direct-to-consumer telehealth: 1) Increase in spending (due to increased follow-up appointments, testing, and prescriptions); and 2) Increase in spending (due to new utilization of services from convenience of direct-to-consumer telehealth)
  • Direct-to-consumer telehealth allows patients to have access to a physician via telephone or videoconferencing. This form of communication is rapidly growing and has potential cost savings by replacing costly visits to physician offices and emergency departments. Patients can also avoid time and travel costs through direct-to-consumer telehealth

Methods of article

  • Authors used claims and enrollment data for the period 2011–13 for approximately 300,000 enrollees in the California Public Employees’ Retirement System (CalPERS) Blue Shield of California health maintenance organization plan. CalPERS is a large California public employee benefit organization
  • Authors evaluated per episode costs and the utilization and spending associated with acute respiratory infection visits among 2 sets of enrollees, users and nonusers of direct-to-consumer telehealth, in 2011–13


  • Spending per acute respiratory infection episode was lower for direct-to-consumer telehealth visits than either physician office or ED visits. Average per episode spending was $7 for telehealth visits, $146 for physician office visits, and $1,734 for ED visits. Additionally, overall, there was a decrease of 10 non-telehealth visits
  • The study found that cost savings from substitutions were outweighed by the increase in spending from new utilization. Authors estimated that there was a net $45 per person increase in acute respiratory infection spending among the direct-to-consumer telehealth user cohort
  • The study found that the net effect of telehealth was in increase in time spend by $21
  • Overall, the study findings do not support the concern that despite virtual visits’ being less costly tan in-person visits, per episode costs of a telehealth visit could be greater than an in-person visit) as the savings from substitution were outweighed by the increase in spending for the new utilization, and per enrollee spending on acute respiratory infection treatment was higher among telehealth users compared to nonusers

Key takeaways/implications

  • Moving forward, employers and health plans should consider several implications: 1) The fact that telehealth visits are less expensive suggests that they have the potential to decrease spending, despite the study’s findings that direct-to-consumer telehealth is not reducing overall spending. There is room for more substitution for visits to other settings that could save them money; 2) Costs are only one consideration in deciding whether to offer telehealth to a population; and 3) The benefits of direct-to-consumer telehealth depend on the conditions treated and the population affected
  • In conclusion, the study found that per episode spending was lower if the patient had a direct-to-consumer telehealth visit, compared to an in-person visit, the convenience of telehealth led to greater use of care and therefore increased healthcare spending
  • Limitations to this study include only evaluating 1 direct-to-consumer telehealth company in a population of patients in California, focus on utilization patterns among a limited population who used direct-to-consumer telehealth and a similar matched cohort, potential selection bias, and a focus on the most common set of conditions treated via direct-to-consumer telehealth