Analysts Say Telemedicine Can Cut Costs, Boost Productivity by Reducing Doctor Visits

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By Caryn Freeman

Aug. 15 — An increasing number of employers are looking to offer telemedicine—non-emergency health care treatment accessed from a remote location, such as the workplace, via electronic means—as an alternative to time-consuming employee doctor visits, according to new analysis from Towers Watson.

The New York City-based consulting firm said in an Aug. 11 statement that telemedicine, also referred to as telehealth, could potentially deliver upwards of $6 billion per year in health care savings to U.S. companies.

Telemedicine can incorporate a variety of services, including two-way video; e-mail; mobile applications for smart phones; and self-service kiosks, where employees can request appointments or labs results, have a short consultation with a nurse or physician, or review information on a current condition and treatment options.

According to Towers Watson's “2014 Health Care Changes Ahead Survey” of U.S. employers with at least 1,000 employees, some 22 percent of employers currently offer a telemedicine option, with that number projected to rise to 37 percent next year. Another 34 percent are considering telemedicine for 2016 or 2017.

Jonathan Linkous, CEO of the American Telemedicine Association, told Bloomberg BNA Aug. 15 that if employers use telemedicine the right way, not only will they reduce health care costs, they can also reduce time-off taken for medical visits.

Benefits attorney Kirk J. Nahra, a partner at Wiley Rein LLP in Washington, D.C., cautioned that there are still lingering questions about telemedicine in terms of how the medical consultations are billed to insurers, potential for fraud and the sophistication of the care offered.

“This strikes me as the kind of thing that in the long run will be beneficial to both employees and employers if it saves time and money,” he told Bloomberg BNA Aug. 21, “so it's probably a good thing, but it's not unambiguously a good thing.”

Reduced Absenteeism at Publisher

Carl Cudworth, director of benefits at Boston-based Houghton Mifflin Harcourt, told Bloomberg BNA Aug. 20 that although the textbook publisher has only offered a telemedicine benefit for about six months, he believes it already has helped reduce lost productivity by about a half-a-day of work per employee based on employees opting for a remote medical consultation over an in-office doctor visit.

“Anecdotally, I would say we are seeing fewer people take time off from work to go to the doctor,” he said.

The publisher decided to offer telemedicine in part for the cost savings, although that wasn't the primary driver, Cudworth said. “The other side is convenience,” he said.

With telemedicine, Cudworth said, employees “can get pretty routine stuff knocked out with a phone call, an e-mail or with video-conferencing from their office, a conference room or their own mobile phones.” He said the company also is considering adding the more advanced kiosk technology.

Telemedicine kiosks are typically outfitted with touch screens, integrated medical devices and video-conferencing capabilities. They enable medical providers to see and treat patients in a variety of nontraditional health care settings, like universities, offices or retail locations. Some stations are also supported by an on-site accredited medical assistant.

Benefits attorney Kirk J. Nahra said that employers need to be aware that when workers start transmitting health care information through any of these telemedicine mechanisms, there is always a security and privacy risk.

“The kiosks are something I'm really thinking about,” Cudworth said. “We've got distribution centers in almost every state that are often in rural areas, so if we can get something low-cost that would allow employees to take their own vitals with technology and then share that with a provider, that would be a great add-on to this benefit.”

Privacy Considerations

Nahra said that employers need to be aware that when workers start transmitting health care information through any of these telemedicine mechanisms, there is always a security and privacy risk.

The privacy distinction for employers lies with employees being in the office and having medical consultations done over the employer-provided internet connection, Nahra explained. “Anytime the employer is adding to the amount of sensitive information it has on its employees,” he said, it has to be careful about what it's doing with that information, “both on the security and privacy end.”

Nahra said employers should think carefully about where employees conduct telemedicine consultations and offer them the best options for privacy.

“Companies want to think through how they design the process,” he said. “I think it would be appropriate for an employer that was instituting telemedicine to say, ‘while you're permitted to sit in your office and have this consultation, if you choose to do that be aware that the call may be monitored consistent with our [internet] monitoring policy.' ” Nahra added, “That's a fair thing to say to people.”

Will Employees Embrace Telemedicine?

“Telemedicine becomes more attractive as lifestyles change,” Jeff Levin-Scherz, national co-leader of the health management practice at Towers Watson, told Bloomberg BNA Aug. 12. “It's not just about dollars that can be saved, it's about access in a way that patients actually like.”

Still, Towers Watson noted that among the employers that currently offer telemedicine, utilization is low, at less than 10 percent.

Levin-Scherz said that employers can boost utilization by communicating to employees the benefits of telemedicine. “Employees need to know that this service is available, and they need to know that it comes with certainty about what the out-of-pocket costs will be,” he said.

Jeff Marks, CEO and founder of HealthPERX, a health benefits company that features telemedicine as its core benefit, told Bloomberg BNA Aug. 20 that telemedicine is popular with employees. He added that because the health care industry is going through major changes, the way people received care in the past will not be the way they receive care in the future.

With a video consult, he said, employees “can have a medical issue resolved over the phone, talk to a doctor within about 20 minutes and have prescriptions sent to their local pharmacy so they don't have to leave work, their home or ruin a vacation or business trip because of an illness,” Marks said.

State Laws, AMA Principles

Currently, 19 states have enacted laws regulating telemedicine issuers—insurance companies, health maintenance organizations or other medical service providers. Some laws, for example, include provisions that restrict insurers from requiring plan participants to have face-to-face contact with health care providers or deny claims for services appropriately provided through telemedicine.

The American Medical Association's Council on Medical Service, meanwhile, recommends a set of principles to ensure the appropriate coverage of and payment for telemedicine services:

• Physicians and other health practitioners delivering telemedicine services must be licensed in the state where the patient receives services, or be providing these services as otherwise authorized by that state's medical board.

• Physician must have had previous face-to-face professional contact with the patient, whether the current consultation service is rendered by telephone, fax, e-mail or other forms of communication.

• Patients seeking care delivered via telemedicine must have a choice of provider, as required for all medical services.

• Patients receiving telemedicine services must have access to the licensure and board certification qualifications of the health care practitioners who are providing the care in advance of their visit.

To contact the reporter on this story: Caryn Freeman in Washington at

To contact the editor responsible for this story: Simon Nadel at


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