Medical services costs for telehealth could swell to $106B by 2023, vendor predicts

Dive Brief:

  • Medical services costs for telehealth could increase by 265% in the next three years, going from more than $29 billion in 2020 to $106 billion in 2023, according to a new report from provider-focused telehealth vendor Doximity.
  • The report, based on a survey of more than 2,000 U.S. adults and internal Doximity data, estimates about 20% of all medical visits will be conducted virtually this year.
  • Researchers also looked specifically at patients with chronic conditions, a population driving the majority of healthcare spend. Those patients saw increased telemedicine adoption of 77% amid the pandemic, compared to a 57% increase for patients without a chronic disease.

Dive Insight:

Virtual care skyrocketed in popularity amid the pandemic as patients tried to avoid potential virus transmission in healthcare settings. However, early data shows use has dampened from a peak around April and May. According to data from EHR giant Epic, telemedicine visits made up just 21% of total encounters by mid-July, down from 69% in April.

The Doximity report jibes with others on hundreds of billions in estimated growth. A report from consultancy McKinsey from June forecasts up to $250 billion in healthcare spend could eventually be digitized.

Before the pandemic, the sum annual revenues of U.S. telehealth companies were estimated at $3 billion.

But policy uncertainty complicates efforts to predict the future of the sector. Relaxed regulations from the Trump administration beginning in March exponentially increased patient access by allowing Medicare to reimburse for a much wider range of virtual services, letting physicians use non-HIPAA-compliant platforms and other flexibilities.

It’s unclear how many of these changes will remain beyond the scope of the national public health emergency. CMS proposed making nine new telehealth codes permanent in its physician fee rule for 2021, along with 13 on a trial basis. But greenlighting the most meaningful changes requires Congressional action, and that body is likely deadlocked, at least for the near future, as the November presidential election looms.

It’s also unclear how consumer interest in the service will shift once the threat from the novel coronavirus is downgraded. Telehealth vendors say the biggest hump was getting patients to try the service, and now that many have, they won’t go back as telehealth becomes normalized.

Only 14% of respondents to Doximity’s July survey said they had tried a telehealth visit before COVID-19. But 23% of respondents said they planned to use it again once the pandemic ends.

However, the report had mixed findings on how patients perceive quality. Only 28% of people said they thought virtual visits were the same or better quality to an in-office exam. That percentage jumped to 53% for people with chronic conditions, who may benefit more from consistent and convenient check-ins and remote monitoring of symptoms.

Indeed, there’s clear overlap between specialties using virtual care the most and those treating chronic illnesses, the report found, with endocrinology and rheumatology topping the list.

And physicians are trying to capitalize on consumer need for digital access to the healthcare system. For the past three years, the number of doctors who self-reported telemedicine as a skill was increasing 20% on a year-over-year basis. But that has almost doubled in 2020 so far, increasing 38% from 2019.

Along with being more likely to be in specialties managing chronic conditions, doctors using telemedicine at high rates are more likely to be women, in their 40s and living on the East Coast in areas with larger urban populations.

Along with the survey, researchers analyzed online physician resumes and data from Doximity’s telehealth platform, which is used by more than 100,000 doctors in the U.S. The report published Wednesday is co-authored by Pete Alprin, a professor at University of California, Berkeley in the college of Public Health, and Christopher Whaley, associate policy researcher at the RAND Corporation.

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