By: Barry McNamara

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May 15th, 2015

What is Telemedicine, and is it Right for Our Organization? (Part 1)


what is telemedicineDriven by the convergence of ever-improving technology, healthcare cost drivers, consumer preference and provider/patient convenience, telemedicine is a booming business. Some readers of this post may have been early adopters. Others may be wondering…Exactly what is it? How does it work? What are the opportunities for -- and the obstacles to – adoption for our employee benefit program?

In this post (Part 1 of 2 Part series), we’ll focus on the first two questions, and later discuss impacts on employee benefits management.

What is telemedicine?

Broadly defined, telemedicine is the use of telecommunication and information technologies to provide clinical health care at a distance.

The three general categories of telemedicine, and an example of each, are store and forward (a scanned image is electronically sent to a provider for offline analysis and diagnosis), remote monitoring (a diabetic’s insulin level is tracked and transmitted electronically to their physician) and interactive, real-time delivery of primary care services (think “e-visits” and “virtual office visits”).

Our focus in this post will be on the last -- which offers the greatest near-term benefit to both plan sponsors and their covered members.  

How do telemedecine e-visits work?

The basic e-visit works like this[1]

The patient (or parent, if the patient is a child) calls a toll-free number and speaks with a medically trained service representative or a registered nurse. The rep or nurse walks the caller through completion of a short health profile and then asks for a description of the symptoms, to help determine the medical issue at hand.

telemedecine e-visitIf the issue is deemed to be of an emergency nature, the caller is either referred to a local ER or, in extreme cases, advised to hang up and call 911 immediately. If the issue is not of an emergency nature, the service rep/nurse triages the call, and a board-certified provider (internist, family practitioner, pediatrician, etc.) calls back, usually within a few hours and often in less than 15 minutes.

Based on the triage notes and the physician’s own direct dialog with the patient/parent, the doctor will outline a course of treatment, write a script and have it sent to a local pharmacy (as needed), and outline needed follow-up care, if any. In the majority of cases, the patient/ parent will receive a follow-up call a few days after that initial interaction.

E-visits offer many immediate and obvious benefits:

  • lower plan costs: $50 (e-visit) v. $300 (Urgent Care facility) or $1,000 (Emergency Room)[2]
  • lower employee costs: office visit copay (or none at all) v. an Urgent Care or Emergency Room copay
  • increased employee satisfaction:
  • 24/7/365 access
  • more convenient than, and just as effective as, a face-to-face visit
  • less stressful -- concerns about travel and waiting room time, sick time/paid time off issues, last-minute child care arrangements, etc. are reduced or eliminated

That said, this is a relatively new delivery model, and questions remain. Among them:

  • will the e-visits actually replace Urgent Care/Emergency Room trips (reducing cost), or will they become additional visits (increasing cost)?
  • employees’ comfort dealing with an unknown physician
  • will e-visits ultimately drive better health outcomes?

Related Blog: The 5 Most Requested Features of PPACA Software Vendors

Who is using telemedicine technology?

What is very clear is that telemedicine is booming. A number of national carriers now offer e-visits. Noteworthy national/multi-national employers have adopted it, as has the Veterans Administration. In addition, the Centers for Medicare and Medicaid (CMS) will be reimbursing the Next Generation Medicare Accountable Care Organizations (ACOs)[3] for e-visits. Various reports predict a ten-fold increase telemedicine from 2013 to 2018, and surveys repeatedly show that a majority of adults are willing to use e-visits. Then factor in estimates that more than one-half of all Urgent Care/ER visits are found to be unnecessary. It’s no wonder that an August 2014 analysis by Towers Watson estimated that universal adoption, and use, of telemedicine would drive cost savings of more than $6 billion a year.[4]

Read more at Part 2 of this blog series.

[1] There will be differences in the service model based on who is providing the service. For example, some telemedicine providers support video chat; some have physicians on the front line, answering the initial calls.

[2] Costs are approximate.

[3] “The Next Generation ACO Model is an initiative developed by the Center for Medicare & Medicaid Innovation Center (CMS Innovation Center) for ACOs that are experienced in coordinating care for populations of patients.”  (Source: CMS Next Generation Accountable Care Organization (ACO) Model Fact Sheet -- March 10, 2015)


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Mistakes are expensive, especially when building benefit plans.

We've outlined the 3 most common mistakes employers make when offering benefits in a quick ebook. Get your copy free when you subscribe to our blog.