Use of virtual care services appears to be a substitute for in-person visits rather than a driver of additional medical costs, according to new data.
RT’s Three Key Takeaways:
- Cost Stability: Researchers found that the expansion of telemedicine during and after the COVID-19 pandemic did not result in a statistically significant increase in healthcare spending or the total number of medical visits.
- Care Substitution: The study suggests that telemedicine primarily functions as a substitute for in-person care rather than an expansion that reaches previously underserved populations.
- Regulatory Impact: These findings may influence the debate over whether the Centers for Medicare & Medicaid Services (CMS) should permanently extend telemedicine flexibilities that are currently set to expire in 2027.
UCLA-led research indicates that the use of telemedicine has not significantly increased medical visits or healthcare spending across various payer types, according to a study published in JAMA Network Open.
The findings could address concerns among lawmakers that the telemedicine expansion initiated during the COVID-19 pandemic would lead to unsustainable utilization and spending increases. Following the 2020 pandemic declaration, the Centers for Medicare & Medicaid Services (CMS) introduced payment parity for virtual visits, waived geographic restrictions, and eliminated out-of-pocket cost sharing. While these CMS flexibilities were extended after the pandemic ended, they are currently scheduled to expire in 2027.
“Our findings suggest neither prediction came true on a national scale,” said John N Mafi, associate professor-in-residence of medicine at the David Geffen School of Medicine at UCLA. “As telemedicine use grew, visits and spending in heavy users tracked closely with patterns in lighter users. 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.”
Researchers analyzed multi-payer medical claims data from more than 3 million US adults enrolled in Medicare fee-for-service, Medicare Advantage, Medicaid, or commercial insurance between January 1, 2019, and December 31, 2023. The study found that telemedicine visits decreased by 2.4% and spending dropped by 0.5%, though these changes were not statistically significant.
The analysis also examined various subgroups, including urban and rural populations, as well as different insurance types. While rural areas saw a 3.4% increase in visits and a 3.8% increase in spending, and urban populations saw a 4.4% decrease in visits, none of these fluctuations reached statistical significance.
“Our analysis runs only through late 2023, when telemedicine use was still settling into a new equilibrium,” said Katherine Kahn, distinguished professor of medicine at the David Geffen School of Medicine at UCLA and senior natural scientist at RAND. “Much more work is needed to understand telemedicine’s longer-term effects on quality of care, health outcomes, and spending, and whether those effects differ across the diverse populations who depend on it.”
The study was funded by Arnold Ventures with additional support from the National Institutes of Health and the National Institute on Aging.
