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Telehealth: Good in Theory, Potentially Problematic in Practice

Amid surging interest in virtual doctor’s visits during COVID-19, policymakers are considering making temporary coverage expansion permanent. But regulators must take steps to ensure telehealth access is equitable — especially for low-income individuals and communities of color — and that it reduces costs, rather than increases government spending.

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Amid surging demand for telehealth services during the COVID-19 pandemic, policymakers — including the Centers for Medicare and Medicaid Services (CMS) — are considering permanent further expansions of these services in the Medicare and Medicaid programs.

However, federal and state policymakers should tread carefully and ensure that long-term expansions occur equitably, providing access to all beneficiaries regardless of age, race, disability, or economic status. That’s critically important for dual-eligible beneficiaries, a population that qualifies for Medicare and Medicaid and that has been among the hardest hit by COVID-19.

Additionally, it’s important that policymakers ensure that the expansion of telehealth doesn’t exacerbate an existing problem of spending more on health care that doesn’t lead to better health outcomes.

“Our system costs too much and yet fails to do a good job of caring for people who have one chronic condition, let alone a complex array of conditions,” said Arielle Mir, Arnold Ventures' Vice President of Complex Care. “In general, spending is high and the outcomes are poor, especially for low-income folks and people of color. Nowhere are poor outcomes and high spending so staggering as among the individuals who are dually eligible for Medicare and Medicaid. We support initiatives that increase access to health care services, but it’s also important to root this access in equity and cost-effectiveness.”

Equal Access

Existing research suggests that telehealth can increase access to beneficial health care services. Studies have found that telemedicine improves access to specialized care for those who live in rural areas where such care can be sparse, facilitates more consistent contact between patients and their providers, and reduces patients’ reliance on emergency settings for care.

However, access to telehealth services is not equitable. Recent surveys have revealed that more than 41 percent of Medicare patients live in a home without a computer that connects to high speed internet, nearly four in 10 do not have a smartphone or wireless data plan, and 26 percent lack access to the internet via computer or phone. In total, an estimated 13 million Medicare beneficiaries face challenges accessing telehealth.

A substantial number of Medicare beneficiaries have health conditions such as dementia, hearing loss, and impaired vision that make it difficult to communicate with providers via telehealth, and that older and poorer Medicare beneficiaries are most likely to face significant barriers. People who are 85 years old or older are three times more likely than their younger Medicare peers to say they don’t use the internet, while those in the lowest Medicare income bracket are seven times more likely than their wealthiest counterparts to report the same.

These statistics point to a troubling problem for dual-eligible beneficiaries, who tend to be lower-income, have multiple chronic conditions and self-report less access to the internet than their Medicare-only counterparts.

“As policymakers consider ways to permanently expand coverage of telehealth services, it’s important to better understand the factors that limit equitable access to this kind of care and to prioritize addressing those limitations,” Mir said.

Impact on Spending

In addition to questions about equity, telehealth’s costs are also concerning, with some research suggesting that while services can reduce costs by decreasing expensive hospitalizations, they can also increase costs, especially if telehealth is used as a supplement — rather than a substitute — for traditional health care.

Few studies have investigated how expanded telehealth impacted care utilization. However, studies of retail health clinics — which, like telehealth, have been touted as convenient access points to supplement traditional health care — have demonstrated increased utilization, and as a result, increased spending, suggesting that telehealth could cause a similar effect.

Some policymakers have echoed the sentiment that telehealth could promote overuse of health care, warning that telehealth’s accessibility is both its greatest strength and greatest weakness.

“Given the potential that telehealth will further increase costs to public expenditures at a time when the program is being stretched thin, we encourage policymakers to carefully monitor the expansion’s impact on beneficiaries and the program. Innovation in care delivery and payment should result in more health, not more health spending,” Mir said.

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