News Feature | August 19, 2014

Telemedicine Could Save Healthcare $6 Billion Per Year

Christine Kern

By Christine Kern, contributing writer

Telemedicine Cost Savings

Towers Watson expects a 68 percent increase in the number of employers offering telemedicine in 2015.

Employers grappling with the ever-changing landscape of healthcare requirements for providing benefits could find large savings in telemedicine – as much as $6 billion, according to a new survey.

Tower Watson survey of 597 employers with a total of 11.3 million full-time staff and found 57 percent are in the process of making changes to their healthcare policies. Changes include adopting an employer wellness plan, making telemedicine available to employees, and using financial incentives to help employees better manage their health.

“While this analysis highlights a maximum potential savings, even a significantly lower level of use could generate hundreds of millions of dollars in savings,” said Dr. Allan Khoury, a senior consultant at Towers Watson. “Achieving this savings requires a shift in patient and physician mindsets, health plan willingness to integrate and reimburse such services, and regulatory support in all states.”

Towers Watson projects that telemedicine is one of the crucial areas where employers will save money since employees will no longer have to leave the office to go to the doctor for non-emergencies.

Not surprisingly, it’s the larger employers who can afford to implement the technology needed. Currently, 22 percent of employers offer some sort of telemedicine, but that number is expected to increase significantly, to 37 percent, for an increase of 68 percent “as a low-cost alternative to emergency room or physician office visits for non-emergency health issues.” Another 34 percent are considering offering it by 2016 or 2017. Those percentages are based on responses from employers with at least 1,000 employees.

Although telemedicine is projected to become more affordable and more widespread, especially as more insurance carriers cover it, leading to wider adoption by more employers, utilization rates remain low among employers who offer it, with vendors indicating a per-member rate of less than 10 percent.

“With both insurance companies and employers encouraging its use, telemedicine is going to have a growing role in the spectrum of health care service delivery. We’re also likely to see that it’s just the tip of the iceberg. Telemedicine is just one piece of a broader telehealth spectrum that includes video, apps, kiosks, virtual visits, wearable devices and other advancements,” concluded Khoury.