scorecardresearch Skip to main content

Remote access to doctors may drive up health costs, Harvard study says

Companies in the rapidly growing field of telehealth say their services can cut health care spending by allowing patients to connect with doctors without leaving home. But new research argues these phone- and video-based services instead may be driving up costs.

A study from Harvard Medical School and the nonprofit RAND Corp. argues that telehealth increases access to care but can also inflate spending by encouraging more people to seek treatment for minor ailments.

Telehealth companies challenged the findings.

Published Monday in the journal Health Affairs, the study comes as growing numbers of employers and insurers are offering telehealth services in the hope that they can help avoid more expensive in-person visits to clinics and hospitals.


“This form of telemedicine has been promoted as a way to decrease health care spending. Our study does not support that,” said Dr. Ateev Mehrotra, an associate professor at Harvard Medical School and one of the authors of the study. “We found that spending actually increased. It really challenges that common perception.”

The paper looked at insurance data for 300,000 Californians from 2011 to 2013, focusing on patients who sought care for acute respiratory problems, such as sinus infections, bronchitis, and common colds. The researchers estimated that 12 percent of the telehealth visits they observed replaced a visit that would have taken place in another more expensive setting, while 88 percent represented new visits that otherwise would not have taken place. The study stopped short of saying whether the additional visits were unnecessary.

“At its heart, we’re arguing a very, very basic point,” Mehrotra said. “When you make something more convenient, more people use it.”

He said the paper identifies a weakness of telehealth, but it does not imply the technology is bad. Indeed, telehealth can be a lifesaver for patients in rural areas who otherwise have trouble accessing medical services, Mehrotra noted.


Two of the country’s biggest telehealth companies, Boston-based American Well Corp. and Teladoc Inc., of Lewisville, Texas, criticized the study, saying that it relied on old and limited data and that the findings contradicted other research.

“This was done four years ago,” said Dr. Roy Schoenberg, chief executive of American Well. “The technologies have changed dramatically.”

Schoenberg said so many large insurers and employers would not be offerering telehealth services if they weren’t convinced of the cost savings. “Nothing becomes a regular part of benefits unless people are satisfied it’s a good investment,” he said.

Teladoc CEO Jason Gorevic said the study contradicted the company’s own survey data, which showed that 87 percent of people who made an appointment through Teladoc for an acute respiratory infection otherwise would have sought care at more costly locations.

“This is a relatively limited and narrow study,” he said of the Health Affairs paper. “We have no doubt that telehealth provides value for our clients and the consumers who use the Teladoc platform.”

Both companies are seeing rapid growth.

Teladoc, which went public in 2015, logged about 952,000 patient visits last year, and it expects at least 1.4 million in 2017. American Well, which is privately held and does not disclose specifics, said its growth skyrocketed in 2016. Teladoc offers doctor visits by phone or video, while American Well is focused just on video visits.

Blue Cross Blue Shield of Massachusetts, which began covering telehealth visits last year, said that 71 percent of its members who saw a doctor by video said they would have gone to an urgent care clinic or a doctor’s office — more expensive sites — if not for the telehealth option.


“While affordability is important, this isn’t all about cost savings,” Gregory LeGrow, Blue Cross’s senior director of technology engagement solutions, said in a statement. “Telehealth is one of many solutions that can help improve access to affordable, convenient care for our members. We do know that those members who have used telehealth are very satisfied with both the system and the service they received.”

Eric Linzer, executive vice president at the Massachusetts Association of Health Plans, which represents other health insurers in the state, said more research is needed.

“It’s a developing industry,” he said. “While many [insurers] have been offering these services, there’s probably more study needed to understand the best places to make this available and who ultimately will benefit from it.”

Christopher Geehern, a spokesman for the employer group Associated Industries of Massachusetts, echoed that point.

“From a policy standpoint, it remains unclear at this time what, if any, effect telemedicine will have on overall health care spending or insurance premiums,” he said by e-mail. “Overall, it seems that telemedicine is more about access than cost reductions.”

Priyanka Dayal McCluskey can be reached at Follow her on Twitter @priyanka_dayal.