Do Virtual Visits Save Money? New RAND Study Casts Some Doubt

Is direct-to-consumer telehealth helping expand access to health care—and, is it helping to lower health care costs overall?

Answering these questions was part of the focus of a new two-year RAND study of a group of California patients, published in the most recent issue of Health Affairs. The verdict?

While the visits themselves were less expensive than in-office visits, they often generated additional costs for payers, and many patients taking advantage of the service did so on numerous occasions due to the convenience, leading to higher costs over time.

The use of telehealth has skyrocketed in recent years, the researchers note, with more than one million such visits recorded in 2015 alone. Yet many of the visits examined in the RAND study appeared to be repeat encounters with the same patients simply seeking to take advantage of the service. Further, while the virtual appointments are, on average, less expensive than in-person medical office visits and far less costly than the average emergency room visit, they often require follow-up tests or in-office visits, which add to the costs. Indeed, only about 12 percent of the visits actually replaced in-person visits. As RAND researcher Lori Uscher-Pines explained (via Kaiser Health News), “What we found is contrary to what [telehealth] companies often say.” Indeed, Teladoc told the publication that its own numbers directly contradicted the study data. But among the California patients participating in the study, Uscher-Pines asserted, “We found an increase in spending for the payer.”

Yet the results of the RAND study certainly don’t mean that telehealth is not a good investment. For one, the researchers note that the lower cost of individual telehealth visits ($79, on average) as compared with in-office visits ($146) is a positive. Further, the study, which was of California state employees utilizing state insurance who sought care for respiratory illnesses (such as sinusitis and bronchitis), only captured data from a small subset of all of the telehealth visits that occur each year.

Many patients use telehealth to manage more complex and costlier conditions than the relatively minor respiratory ailments the RAND patients reported. Finally, other studies have pointed to significant cost savings from telehealth, including research from the American Hospital Association and the consulting firm Towers Watson. As with many things telehealth-related, time and research are needed to tell us more.

Click here for the article from Kaiser Health News on the RAND telehealth study. 



One Comment

  1. Bruce Judson
    Mar 23, 2017

    This new RAND study suffers from many disturbing issues associated with its basic methodology and underlying assumptions. My detailed critique of the study appears in “The Huffington Post”, as “Telehealth Costs: RAND’s Questionable Rant, at

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