Direct-to-Consumer Telemedicine May Save Employers Cash, Study Finds

Research suggests that DTC care may cuts costs for employers and improves healthcare access for employees

With nearly 40% of Americans putting off medical care due to cost last year and healthcare costs topping $31,000 for a family of 4 in 2023, the need for a healthcare model that prioritizes accessible, affordable care has never been more critical – but new research hints that direct-to-consumer telemedicine may be part of the cure both for employees and employers.

Direct-to-consumer (DTC) telemedicine, sometimes called “direct-to-patient” care or “on-demand” care, is a type of telemedicine where patients have instant access to healthcare providers or services. It enables patients to obtain care at a time that is convenient for them, and you can even access primary care providers who utilize DTC telemedicine, too! This is especially true with cash-pay direct-to-patient care, in which fees from third parties like insurance and the government are removed and replaced with a direct connection between patients and clinicians. For example, a telehealth appointment on cash-pay healthcare marketplace Sesame starts at $30–$40 (for a 15-minute appointment). In contrast, most in-person visits start at about $100 out of pocket.

Advocates of DTC telemedicine have upheld for years that telemedicine’s convenience helps people to quickly address their concerns while reducing not only time costs associated with in-person care (getting in your car to drive to your appointment, finding parking, waiting in the lobby for the doctor to see you) but also physical costs of getting in-person care (paying for gas, paying for parking, etc.)

However, a recent study from the American Journal of Managed Care has found that access to direct-to-consumer care is more than a boon for individuals — it holds the potential to reduce costs for employers as well. We’ve laid out the results of the study, along with a discussion about the significance of the findings, below.

What were the findings of the study?

The study set out to compare the mean per-episode cost (the combined cost of all services related to a specific treatment or condition) of DTC telemedicine with the mean per-episode cost of in-person care for employers. It also sought to determine if the offering of a DTC telemedicine service increased the use of care by employees. Put simply, the researchers were curious to see if employees were more likely to seek medical care if it was more accessible and convenient, and they also wanted to see how much it cost the employer.

The results? The average direct-to-consumer telehealth visit cost employers $113.73 less than in-person episodes in just 7 days, and only marginally increased the utilization of telehealth services. In other words, the employer saved significant amounts of money by offering direct-to-consumer telemedicine to their employees, even with an increased number of patients seeking care. The increase in telehealth utilization did not offset the cost savings of using direct-to-consumer telemedicine!

What are the main takeaways for consumers and their employers?

The findings of this study are significant because they highlight that DTC telemedicine is affordable, convenient, and easy. It can improve access to care while saving money for both employers and employees alike - in fact, employers can add platforms like Sesame to their benefits for free.

However, even if an employer doesn’t want to add new offerings to their benefits package, making direct to consumer telemedicine available can improve care and save money. Whether a patient is using it to address an acute or urgent care concern, or find a PCP to help manage a condition over time, DTC telemedicine gives patients the power to be more proactive about their health concerns, instead of delaying or forgoing care due to cost.

The need for a new healthcare model that prioritizes accessible, affordable care has never been more critical - and the AJMC’s publishings highlight that part of the solution may be within reach: if more patients utilized DTC telemedicine, the financial and health advantages could be far-reaching for all.