Why is telemedicine utilization so low?

Simply checking the telemedicine box isn’t going to be enough to satisfy a market that believes telemedicine, or rather, virtual care, done right is the answer to savings and efficiency in health care.

telemedicine applications

EDITORIAL NOTE: An earlier version of this story included the names of several telemedicine companies that authors claim to have failed to break a low ceiling of utilization. However, because of inaccuracies in representing their platforms, MedCity News is excluding any references to those organizations.


Mandates for the provision of telemedicine have driven insurance companies and employers to jump into arrangements with many telemedicine companies.

The availability of low-risk arrangements for the payer make these deals attractive because they’re light on out-of-pocket expenses, often only charging when a visit occurs or requiring a co-pay to discourage use. But offering care in a lower-cost venue only saves money if people use it.

Although nearly 85 percent of those insured in the US currently have some remote access service provided through their job, utilization among employed Americans remains dismal. The ability to state, “we offer telemedicine” seems to have given payer-side executives a sense of relief that a requirement has been met, yet few are impressed with the ROI performance of national telemedicine platforms.

Why is telemedicine as delivered by established companies failing to break the 2-3 percent utilization ceiling?

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A Deep-dive Into Specialty Pharma

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The primary culprit is that access pathways are queue based and mostly telephonic. A single physician on-call is limited to taking sequential phone calls which limits patient access. A second reason is the lack of continuity with providers.

In this model, patients don’t have the opportunity for multiple touch points with the same on-call provider that helps to establish a doctor-patient relationship. This deficiency has been a barrier for telemedicine companies seeking to edge into the medical establishment. If telemedicine is to make a dent in the provider shortage problem the nation faces, general acceptance by traditional providers and integration with local health systems will be important. Teladoc is currently being sued by the Texas Medical Board and during proceedings one executive admitted, “we don’t form doctor-patient relationships.”

The medical staffing practices of these telemedicine firms are not unlike that of Uber or Lyft. Doctors log into a grid and are matched with patients seeking attention in states where that clinician is licensed. They are connected briefly but the encounter isn’t integrated with the local care delivery mechanism.

A common outcome of a momentary, non-relational physician encounter is a bit of safe advice, or perhaps an unnecessary, although benign prescription. Doctors in this setting often punt on anything other than the simplest cases, eager to move on to the next case to collect another fee, on the order of $25 per patient.

The most commonly prescribed drugs in remote encounters are antibiotics—a patient satisfier in many cases, but over prescribed in telemedicine. Often in clinical practice, the physician suspects a virus and withholds antibiotic therapy pending resolution or progression of symptoms in a bacteria-like pattern. However, in a “one and done” scenario, the doctor knows that this is their only encounter with the patient and therefore is more likely to prescribe an antibiotic. This practice is out of sync with best practices in evidence-based medicine.

So back to employers.

They care about several things: cost savings, reduction of medical absenteeism (time spent away from work for doctors’ appointments), and providing convenient perks as a reward of employment. They also care about reducing medical presenteeism — the phenomenon of contagious workers infecting others in the workplace causing loss of productivity.

It makes sense that employers would want a telemedicine service to provide value to workers and the company as a whole. Yet despite the near-ubiquitous presence of telemedicine, this remains a massive unmet need. It all boils down to utilization.

These telemedicine companies haven’t cracked the code of patient engagement with remote physicians. If utilization is low among plan beneficiaries with access these telemedicine platforms, re-utilization is even lower.

Return use is an indicator of patient satisfaction. Yet to date, people who use their platforms once are highly unlikely to use the service again. Anemic performance is the reason members of the established telemed companies are renewing contracts with no base charge to clients and are willing to operate at a loss in defense of their market share— renew with us at no cost, but with exclusivity, they tell customers who would otherwise cancel.

Just because they’re willing to give the service away, doesn’t mean it’s meeting the needs of a hungry market. Keeping contracts alive despite non-use saves face for telemedicine companies and prevents payer-side executives from searching the market for solutions. As new platforms emerge that are based on continuity and integration, simply checking the telemedicine box isn’t going to be enough to satisfy a market that believes telemedicine, or rather, virtual care, done right is the answer to savings and efficiency in health care.

Photo: Stethoscope on Keyboard from Big Stock Photo

John DuttonThis post is co-authored by John Dutton, medical Director, CirrusMD, a telemedicine platform for value-based care. Dr. Dutton, who’s also an emergency physician in Northern California, guides CirrusMD to ensure updates to the platform provide the best experience possible for patients and providers. Dr. Dutton completed his internship and residency at Harvard Affiliated Emergency Medicine Residency in Boston, MA after graduating from the Boston University School of Medicine. After medical school, he served for five years active duty in the U.S. Air Force. He received a Masters in Medical Sciences from Boston University and Bachelors of Science in Biochemistry from University of California, Davis.