Post-pandemic use of telehealth causes ‘modest’ increase in visits and spending

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Greater use of telehealth led to more health care spending for Medicare, but that cost increase will not necessarily prompt more restrictions on its use.

A new study examined use of telemedicine by physicians, health systems and Medicare beneficiaries before, during and after the COVID-19 pandemic. Researchers found a 1.6% increase in health care spending, largely driving by inpatient and drug spending.

That may be acceptable to lawmakers who feared fewer restrictions on telehealth would lead to more patient visits and an accompanying increase in costs, said the study, “The Impact Of Telemedicine On Medicare Utilization, Spending, and Quality, 2019-22,” published in Health Affairs.

The research on spending and quality is timely because Congress allowed for expanded use of telehealth during the pandemic and has temporarily extended Medicare’s broad coverage of telemedicine through 2024, according to the study.

“Before the pandemic, many policy makers were concerned that broad telemedicine coverage would lead to more use and that restrictions may be necessary to contain spending,” the study said. Now, the researchers predicted “it will be difficult to justify a return to restricting telemedicine payment in Medicare.”

The study examined health systems with at least one acute care hospital, 10 primary care physicians, and 50 total physicians. They were divided into quartiles based on telehealth use. All were low in 2019. Telehealth spiked in 2020, then declined through December 2022. As the pandemic subsided, patients at high-telemedicine health systems continued using telemedicine more than those at the low-use systems, according to the study.

Patients at the high-telehealth systems showed “modest” increases in office visits, care continuity and medication adherence, most noticeably among patients without chronic illness and patients who were lower-income and non-White. There were no differences for testing or preventive service use.

“Given concerns that telemedicine’s convenience will lead to more visits, the relatively small increase in visits that we observed was somewhat surprising. It may be explained by several factors,” the study said. “Clinicians in the health systems in the highest quartile of telemedicine use may have had limited capacity to provide additional visits. Alternatively, there may have been limited demand from patients for telemedicine as a result of technological barriers or beliefs that telemedicine visits are lower in quality than in-person visits.”

Patient demand, health system optimization and better technology all could affect future quality and spending on telemedicine, so additional study will be needed, the researchers said.