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Telehealth, retail clinic use increasing in pivot toward lower-priced medical delivery sites

Dive Brief:

  • Consumer use of telehealth and retail clinics spiked from 2017 to 2018, while use of urgent care centers, ambulatory surgery centers and emergency rooms dropped as consumers increasingly turn to cheaper sites of care for low-acuity medical needs.
  • Telehealth use grew 12% and retail clinic use grew 10% during the time period, according to a new report from health cost nonprofit FAIR Health. At the same time, urgent care center use fell 11%, ambulatory surgery center use fell 12% and ER use fell 15%.
  • However, despite increased use of telehealth and retail clinics, use of all five places of health service has slowed overall. Retail clinics and virtual care saw growth from 2013 to 2018, but at a much slower rate compared to 2012 to 2017, FAIR Health found. Similarly, for urgent care centers, ambulatory surgery centers and ERs, growth in 2009 to 2018 was at a much slower rate than 2008 to 2017. 

Dive Insight:

The report is the latest in a pile of research finding consumers are pivoting to less expensive medical delivery sites for non-urgent needs as healthcare costs continue to skyrocket in the U.S.

The need for cheaper and more easily accessible front doors to healthcare has been highlighted by the ongoing coronavirus outbreak, with virtual care in particular trumpeted as a means to ameliorate stress on doctor’s offices and health systems.

The Trump administration has scaled back regulations on telehealth use, including allowing traditional Medicare to cover virtual care visits over the phone or video using common methods like Skype or Facetime and urging states to roll back licensing restrictions on out-of-state physicians.

As a result, telemedicine vendors have seen utilization of their platforms skyrocket over the past few weeks.

The benefits of telehealth may be compounded in rural areas, where residents could be dozens of miles away from the closest doctor or hospital.

However, FAIR Health found retail clinics and telehealth both saw higher utilization in urban areas from 2017 to 2018, but that was offset by a small decrease in use in rural areas. Last year’s report found American’s use of telehealth jumped more than 50% between 2016 and 2017, outpacing the growth of all other sites.

Increased utilization of telehealth and retail clinics has the potential to lower healthcare costs on individual patients and the system as a whole. Retail clinic use overall grew by 10% from 2017 to 2018, mostly in northern states like Minnesota, Montana, New Jersey and Delaware, while virtual care usage bumped 12% in that year.

Urgent care use decreased 11%, ambulatory surgery center use fell 12%, and ER use dropped 15% from 2017 to 2018.

However, ERs accounted for more than 2% of all medical claims in 2017 and 2018, FAIR Health found. Urgent care centers accounted for more than 1% of all medical claims and retail clinics accounted for less than 0.1%, illustrating consumers selecting retail and telehealth options when they have a choice, but emergency needs will still result in a costlier visit to the ER or urgent care.

The report is based on an analysis of a database of more than 30 billion privately billed medical claims.

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