A National Perspective of Telemedicine Use and Direct Medical Costs: Who Uses It and How Much It Costs

Background: Telemedicine has the potential to reduce medical costs among health systems. However, there is a limited understanding of the use of telemedicine and its association with direct medical costs. Objectives: Using nationally representative data, we investigated telemedicine use and the associated direct medical costs among respondents overall and stratified by medical provider type and patient insurance status. Research Design, Subjects, and Measures: We used the 2020 Medical Expenditure Panel Survey full-year consolidated file, and outpatient department (OP) and office-based (OB) medical provider event files. Outcomes included total and out-of-pocket costs per visit for OP and OB. The primary independent variable was a binary variable indicating visits made through any telemedicine modality. We used multivariable generalized linear models and 2-part models, adjusting for types of providers and care, patient characteristics, and survey design. Results: Among total OP (n = 2938) and OB (n = 20,204) visits, 47.6% and 24.7% of visits, respectively were made through telemedicine. For OP, telemedicine visits were associated with lower total costs (average marginal effect: -$228; 95% confidence interval -$362, -$95) and out-of-pocket costs for all visits and for visits to specialists and to nurse practitioners or physicians assistants. For OB, telemedicine visits were associated with lower total costs, but not with lower out-of-pocket costs, for visits to primary care physicians or nurse practitioners or physician assistants, and for visits by Medicare patients. Conclusion: Telemedicine was associated with lower direct medical costs. Its potential for cost curbing should be proactively identified and integrated into clinical practice and health policy design.