Economics of a Health System’s Direct-to-Consumer Telemedicine for Its Employees

Economics of a Health System’s Direct-to-Consumer Telemedicine for Its Employees

Employers in the United States have increasingly been offering a direct-to-consumer (DTC) telemedicine benefit for low-acuity or minor illnesses to their employees.1-3 By 2021, more than 95% of employers with 50 or more employees provided some coverage for DTC telemedicine in their largest health plan; more than 75% felt that offering telemedicine was important and nearly 20% either limited or eliminated cost sharing for telemedicine. This study has 2 main findings. First, a telemedicine alternative to in-person care delivered within a medical center free to its employees produced lower immediate per-episode unit cost for care. This favorable per-episode cost might be undermined if OnDemand’s convenience induced care overuse for symptoms that otherwise would have been ignored by employees. A second finding is that encounter rates increased marginally after the introduction of OnDemand among a set of conditions for which inducement of overuse would have been most likely.

Medigy Insights

Employers in the US have increasingly offered direct-to-consumer (DTC) telemedicine benefits to employees for minor illnesses. By 2021, over 95% of employers with 50 or more employees included DTC telemedicine coverage in their main health plans, with 75% recognizing its importance and nearly 20% reducing or eliminating cost sharing for telemedicine. A study reveals two key findings: Firstly, providing telemedicine within a medical center at no cost to employees resulted in lower immediate per-episode unit costs. However, the convenience of OnDemand telemedicine may have led to increased care utilization for symptoms that would have otherwise been ignored. Secondly, encounter rates slightly increased after implementing OnDemand for conditions prone to overuse inducement.


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