May 15, 2018

The Effect of Telehealth on Spending: Thinking Through the Numbers

Interest is growing in how telehealth, the provision of care through virtual and remote technologies, can improve access to care. Many pieces of legislation have been proposed to expand coverage for telehealth: In 2017 alone, more than 200 bills were pending in 40 state legislatures and Congress. A central question in the debate over these expansions is what effect telehealth will have on health care spending.

Media coverage and providers commonly tout reduced spending as one of telehealth’s primary benefits. Because telehealth may be less expensive than equivalent in-person care, the argument is that substituting it for in-person care will decrease spending. However, the Congressional Budget Office and the Medicare Payment Advisory Commission have expressed concern that expanded coverage for telehealth may actually increase spending by adding to the overall use of care.

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