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Socio-Economic Benefits of Telemedicine Services

The enormous applications of telemedicine in the United States have provided an educational role model in terms of the potential advantages that this technology can bring to the individual, the society, and the country as a whole. In 2016, a report to US Congress estimated that 61% of US healthcare institutions and 40% to 50% of US hospitals used telemedicine. We explore in this article some of the socio-economic benefits of telemedicine; pertaining market trends, employment opportunities, benefits in patient outcomes, employer benefits, and potential healthcare cost savings.


Market Trends

Some of the promising key trends in the US telemedicine market are:

  • Market Size: The telehealth market size, measured by revenue, in the US is approximately $2.3b in 2019; an increase of $300m from the $2b reported in 2018.

  • Market Growth: Between 2014 - 2018, the telehealth market size has grown an average of 34.5% per year; faster than the growth in the overall US economy itself.

  • Job Creation: The number of telehealth businesses in the US increased to 1,805 and has created an additional 8,592 jobs in 2019 alone.

  • Demand for Telehealth: As shown in Figure 1.9, a 2015 survey reported that 60% of millennials (who makeup approximately 24% of US population) support the use of telehealth in replacement of in-office visits and 71% prefer if their doctors use a mobile app [29]. In comparison, millennials makeup approximately 40% of the Saudi population of 34.2 million.



Healthcare Costs

It is estimated that telehealth could save the United States health care system more than $4 billion, annually. This arises from replacement of ineffective practices by telemedicine, such as, overuse of emergency department, the growing healthcare expenditure, and potential employer savings.

  • Emergency Department Costs: The average cost of treating ten primary-care treatable conditions at hospital ED has increased from $1,233 in 2008 to $2,032 in 2019. ED costs are significantly higher compared to costs in a primary-care settings primarily due to hospital facility fees (averaging an additional $1,069) and 10x higher rates for pathology and radiology services (averaging $335 at ED). In 2016, the number of Emergency Department visits in the US reached 145.6 million with only 42.2 million being injury-related visits and only 8.7% of all visits resulting in hospital admission [33]. In comparison, the total number of visits to ED in Saudi Arabia reached 17.4 million visits (public hospitals only) in 2016 [34]; which (in relative terms) is approximately 12.8% higher than that of the US in the same year. The number of total ED visits in Saudi Arabia has notably increased form the 2006 register of 15.4 million cases.



  • Employer Savings: The global professional services company, Towers Watson, estimated that US employers could save up to $6b in their annual healthcare expenditure by implementing telehealth solutions and services.


  • Healthcare Expenditure: The Organisation for Economic Cooperation and Development (OCED) reported that for 3 consecutive years (2016-2018), the United States spent 17.1% of its Gross Domestic Product (GDP) on healthcare costs compared to 15.3% in 2008 and only 12.5% at the turn of the century. In comparison, the Ministry of Health in Saudi Arabia had a 7.61% share of the country's total budget in 2017, compared to 7.01% in 2016 and 6.0% in 2006 [35]. An example of potential reduction in healthcare expenditure was estimated by the Veterans Health Administration (VHA) that their use of telehealth saves the system $6500 per patient per year (or $1 billion in 2012) by reducing hospital readmissions, improving chronic disease care, and providing mental health services. Rural VHA telehealth systems provided higher savings primarily due to reductions in travel expenses.



Inadequacies in Primary Care

Some of the shortcomings of the US primary care sector are highlighted below along with potential improvements through the utilisation of telemedicine technology.,


  • Accessibility: The Commonwealth Fund conducted an 11-country study in 2016 and determined that in the United States: 51% of US adults struggled to get health care after-hours and on weekends without visiting the emergency department, with 35% of them actually going to ED for primary care in the past 2 years.

  • Limited Consulting Time: An analytical survey in 2017 determined that the actual face-to-face consulting time in 56% of all specialty and primary care visits averaged only 16 minutes; despite the several hours involved in the total visit time (from travel time, waiting time, to completion of paperwork).

  • Wait for Appointments: The average wait for new family doctor appointments in 15 major metropolitan areas increased by 51% from 19.5 to 29.3 days between 2014 and 2017. Similarly, the average wait in medium-sized metropolitan areas was 54.3 days in 2017. In contrast, for First Stop Health (a telemedicine provider) the average callback time was 5 minutes in 2017 following an initial 5-minute symptoms and history-taking call.



  • Long Wait at Appointments: A Harvard Medical School study (published in the American Journal of Managed Care, JAMA) concluded that patients pay more for their appointments using time. It was estimated that a typical appointment that 121 minutes including: 37 minutes of travel time, 64 minutes of waiting time, and just 20 minutes of face-to-face consultation.

  • Primary Practitioner Shortages: The Association of American Medical Colleges estimates that the current number of Primary Care Practitioners (PCP) can only meet less than 50% of the population needs; with the gap projected to increase significantly by 2025. This means that an estimated 65 million Americans are living in “a primary care desert".



Benefits to Patients

As more telemedicine applications are being utilised, a growing number of benefits are been

reported. These include: increased accessibility for rural and remote patients to specialist services, better patient outcomes in mental and ICU care, high patient satisfaction and decreased travel expenses.

  • High Patient Satisfaction: A cross-sectional patient satisfaction survey published in the Journal of General Internal Medicine assessed patients' satisfaction with telehealth services by CVS Minute Clinic in 2016. It was found that 94-99% of the diverse 3,000 patients were 'very satisfied' with the telehealth service; with 1/3 of respondents preferring telehealth over a conventional doctor visit.

  • Equivalent Quality of Care: According to the American Telemedicine Association (ATA), “Studies have consistently shown that the quality of healthcare services delivered via telemedicine are as good those given in traditional in-person consultations". The ATA has further stated that "in some specialties, particularly in mental health and ICU care, telemedicine delivers a superior product, with greater outcomes and patient satisfaction".

  • Specialists in Rural Areas: Shortages of specialists in rural America are considered acute; because in numerical terms, rural areas has an estimated specialist-to-resident ratio of 40/10,000 as compared to 134/10,000 specialists for urban residents. Telemedicine can bridge this gap by giving rural patients access to specialist in developed areas or even overseas.

  • Convenience: millennials - in particular - place high value on convenience and limiting costs in seeking medical treatment. A recent Fair Health survey found that only 43% of millennials were likely to attend a primary care setting for non-emergency treatment, as opposed to seeking a more convenient option (such as, urgent care).




Benefits to Employers

Employers and employees alike are set to benefit for widespread application of telemedicine technology. Benefits include: direct savings in employer operating expenses, increased productivity in the workplace, improved benefit packages for employees, and convenience.


  • Operating Expenses: It is estimated that healthcare costs constitute up to 7.6% of a company’s annual operating budget and equates to an average of $8,669 per covered employee and is growing on annual basis. This, among other factors, has led employers to either explore alternative sites for care (on-site or near-site health clinics, and telemedicine), or pass a higher share of healthcare expenses onto the employees [57]. It is notable, however, that 69% and 90% of US medium and large firms respectively now offer telemedicine features as part of their employee health insurance plans.





  • Increased Employee Burden: An Employer Health Benefits Survey by the Kaiser Family Foundation found that employees are currently shouldering a bigger share of the ever-rising healthcare costs. Over the past decade, employee contributions have increased by 71% to average $1,242 (single) and $6,015 (family) in 2019 as compared to $779 (single) and $3,515 (family) in 2009. It is suggested that the increasing utilisation of telemedicine over period 2014-2019 contributed significantly to premium and subsequently employee contribution savings (as evident by a group of best-performing companies leading by 18% in telemedicine implementation and achieving an annual $2,251 per employee healthcare cost advantage over the national average in 2017).






Finally, it is evident that telemedicine applications are influencing the way individuals seek healthcare services. We, at Redak Medical, are contributing our part by helping clients offer innovative telemedicine (in particular, tele-diagnosis) to the wider community. We take pride in what we do!




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