Why Telemedicine Embedded In Major Medical Doesn’t Work

For the past 15+ years, your health insurance broker has made his annual sojourn to your office to give you estimates for corporate major medical plans.  These meetings often begin with “I have great news; your premiums are only going up by 8% this year!”

While the broker flashes a teethy smile, your internal dialogue runs wild. You wonder:

• How that is even possible?
• How you are going to make it work?

Your margins are squeezed, yet every year your premiums on health care have increased faster than any other expense on your P&L.  In a study by the Health Research Education Trust, it was shown that the cost for family coverage grew by 290% from 1999 to 2014.  This staggering statistic tremendously outpaced the combined forces of inflation and GDP growth.

The major health insurers have an opportunity to embrace telemedicine as a meaningful strategy to reverse the compounded growth of premiums.  By aggressively using telemedicine as a strategy to redirect a patient to a more convenient and cost-efficient consultation, the cost of coverage declines drastically.

With the average cost of an ER visit at $1,318 and an Urgent Care clinic at $165, the savings potential of telemedicine is profound.   Many healthcare insurers currently provide telemedicine in many of their plans.  The trouble is that the simple instructions on how to use telemedicine are buried in the information packet and typically require a consultant fee ranging from $40-$49.

Historical utilization rates of telemedicine with a “co-pay” hover between 2-3%.  In contrast, well-promoted telemedicine programs without a consultant fee have seen utilization rates that are in the 25% range in year one and can increase to 200% in the next 3-5 years.

So, ask yourself. “Why wouldn’t a health insurance company or broker want to heavily promote a telemedicine platform?”  Then ask yourself if these business models perform better with premium growth or premium decline.

When selecting a telemedicine platform, it is important to consider that the best telemedicine program is the one that is used!