Telemedicine visits cut health system employee care costs by nearly 25 percent

June 16, 2023
New analysis.

Visits with a 24/7, co-payment-free telemedicine program established by Penn Medicine for its employees were 23 percent less expensive than in-person visits for the same conditions, according to a new analysis published in the American Journal of Managed Care.

Researchers at the Perelman School of Medicine at the University of Pennsylvania found that the per-visit costs for the telemedicine program, called Penn Medicine OnDemand, averaged $380 while in-person encounters in primary care offices, emergency departments, or urgent care clinics during the same timeframe cost $493 to conduct, a $113 difference per patient.

The study analyzed de-identified data from almost 11,000 total visits by Penn Medicine employees who used the company-sponsored insurance plan. The researchers compared 5,413 visits to Penn’s OnDemand telemedicine service with 5,413 that were conducted in-person during the same period. The timeframe studied started with OnDemand’s initial launch in July 2017 until the end of 2019, a phase chosen to avoid confusion with changes enacted in response to the COVID-19 pandemic.

While the researchers saw a 10 percent increase in demand for telemedicine services over the study period, the 23 percent decrease in “unit cost” – which factors in things like providers’ salaries and the equipment needed for calls – made it possible for the service to simultaneously be easier for employees to use and less expensive for the employer overall. The net effect was hundreds of thousands of dollars in savings for the health system.

Perelman School of Medicine at the University of Pennsylvania release on Newswise