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Research Review: Does Telehealth Really Save on Costs?

As a healthcare provider or staff member, you’ve probably heard the claims that telehealth could help reduce our healthcare spending.

Is this just hype, or is it actually true?

We delved into some recent telehealth research to find out. The short answer? Yes! Telehealth can lead to cost-savings for both patients and providers.

The studies we reviewed showed that telehealth has a number of financial benefits for providers, such as patient retention, time optimization, improved appointment compliance, and lower overhead costs and liability. And these cost-savings of telehealth apply to a wide range of medical specialties and facility types.

Let’s take a closer look at what the research has to say.

Cost Savings Among the Veteran Patient Population

A 2008 study examined the results of a national home telehealth program the Veterans Health Administration introduced to facilitate chronic care for veterans. The study found that telehealth reduced the number of bed days of care by 25% and reduced the number of hospital admissions by 19%. This meant a significant reduction in costs and a huge increase in care quality and patient satisfaction among veterans. The study’s results are cause for optimism about how we can better use telehealth to improve chronic care.

Economic Impacts From eICU in Surgical Care

Costs related to surgery and ICU care are often high. According to a 2007 study, telehealth can help bring these down for patients and providers alike. After implementing an “eICU” in an academic surgical ICU, the facility reported a 10% reduction in length of ICU stay, and a 20% reduction in floor stay.

Cost savings came to about $700,000 to $940,000 for the ICU and about $2.1 million to $2.8 million for the floor. The study demonstrated telehealth’s potential to address complex medical cases beyond just virtual care for common ailments.

Reduction in Patient Transportation and Transfer Costs

Another study used a telehealth program to drastically reduce transportation costs for patients (which seems like a no-brainer, right?). Researchers monitored patient transportation costs in a number of settings.

  • Emergency rooms – Reduction of 850,000 transports between emergency departments with cost savings of $537 million per year.
  • Nursing homes – Reduction of 387,000 transports to emergency departments with cost savings of $327 million per year; reduction of 6.87 million transports to in-person physician office visits with cost savings of $479 million per year.
  • Correctional facilities – Reduction of nearly 40,000 transports to emergency departments with cost savings of $60.3 million per year; reduction of 543,000 transports to physician offices with cost savings of $210 million per year.

Overall, the cost-savings across all these care settings was huge!

Systematic Review Shows Widespread Telehealth Cost-Savings

Individual studies are one thing. What about the bigger picture?

A systematic review of 23 telehealth reports published between 1997 and 2007 found consistent reductions in total cost, cost per patient, and cost per visit. Telehealth saving on costs is a trend, not an outlier.

While there’s still more research to be done, the studies show there’s a huge potential for telehealth to help us save on healthcare costs – for the entire industry, the providers, and the patients. While it takes an initial investment to get a telehealth program up-and-running, the research suggests it’s a decision that will bring healthcare providers an ROI.


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