BREAKINGVIEWS-Telemedicine may be U.S. healthcare's new normal

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)

NEW YORK, May 21 (Reuters Breakingviews) - The doctor’s office is increasingly in everyone’s home. Online visits in the United States are surging during the pandemic, as it’s safer, insurers are waving carrots to use them, and restrictive rules are easing. While virtual visits are cheaper, though, increased uptake could push up total healthcare spending.

Teladoc Health, a virtual healthcare specialist worth $13 billion, saw visits grow by more than 90% in the first quarter to 2 million. UnitedHealth, the nation’s largest health insurer, said virtual visits by customers doubled in the first quarter.

It’s easy to see why. Patients are reluctant to be in a waiting room with people potentially suffering from Covid-19. Doctors’ practices need to replace lost revenue. Meanwhile, insurers are waiving co-pays, and the government is encouraging virtual visits. It has broadened services that can be offered and bumped up the amount doctors can charge Medicare patients. And some states are easing rules restricting healthcare workers from practicing across state lines.

It’s more than just Covid-19. Online visits are more convenient. Rural patients particularly benefit, as doctors tend to cluster in urban areas. According to a 2017 study in Health Affairs, a telehealth session for a respiratory infection cost $79 compared to $146 for a doctor’s office and $1,734 for an emergency room visit.

There are limitations, of course. Patients need to be present for procedures such as biopsies. Online care may not be as good as an in-person consultation if symptoms are missed. Cross-border license restrictions still exist. And wrinkles such as hacked connections and recorded sessions introduce legal issues.

The biggest drawback might be an increase in overall medical spending. The 2017 study found nearly 90% of visits were new utilization – in other words, instead of just using an online session as a substitute for an office visit, patients were seeing doctors much more often because of the convenience. While the cost per visit went down, net costs went up. That may not be all bad. More patients may get needed care, and fewer missed visits may yield better outcomes for conditions such as depression or diabetes where patient compliance is notoriously low.

U.S. healthcare spending, now at 18% of GDP, has proved resilient against any efforts to curtail its growth. It shouldn’t surprise anyone if telemedicine adheres to the pattern.

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- On April 30, the administration of U.S. President Donald Trump said it was taking further measures to expand the provision of healthcare over video and telephone links. The Centers for Medicare & Medicaid Services will expand the number of healthcare practitioners that can provide telehealth services under Medicare, the government program for retired people, for the duration of the pandemic to include physical and speech therapists, among others.

- CMS will also waive the requirement for certain Medicare services to be provided over video and allow them to be done over the phone. The agency also increased reimbursement for these telephone visits to the same level as office visits. On March 30, CMS allowed Medicare providers to charge as much for a video consultation as an in-person visit.

- Teladoc Health, a provider of virtual medical services, said on April 29 that it had 2 million total visits in the first quarter, an increase of 92% from the same period last year. It lost $30 million in the quarter, a slight improvement year-on-year. Teladoc’s market capitalization has doubled since the start of the year to $13 billion.

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Editing by Richard Beales and Amanda Gomez