How Does Telehealth Affect Health System Costs?

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COVID-19 has brought about a massive upsurge in the use of telehealth services in Australia. Against the stark backdrop of the pandemic, telehealth advocates have seen many of their longstanding hopes for telehealth adoption realised in 2020. Nevertheless, most services of this kind are still in a nascent stage of development, and relatively few studies have assessed the degree to which telehealth matches the high hopes of its advocates in terms of improving care and reducing costs.

To address this latter question, PCHSS investigators Dr Centaine Snoswell, Professor Leonard Gray, Associate Professor Liam Caffery, and colleagues carried out a scoping review of the literature on the economics of telehealth usage. In “Determining if Telehealth Can Reduce Health System Costs: Scoping Review”, published in the Journal of Medical Internet Research in October 2020, the authors examine if telehealth reduces health system costs compared with traditional service models.

The researchers found that telehealth reduced health system costs in 53% of cost-minimisation studies, 50% of cost-effectiveness studies, and 32% of cost-utility studies. The principal reason for cost reductions was the avoidance or minimisation of health system-funded travel by patients and clinicians. In the other studies, telehealth raised costs, though with improved care. On this subject, the authors argue the following:

The available evidence has indicated that telehealth does not always reduce the cost of care from the perspective of the health system in the short to medium term. Health services considering implementing telehealth should be motivated by benefits other than cost reduction.

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