Utilization: The Magic Number in Telemedicine

Human Resources professionals face the conundrum of keeping healthcare costs low while satisfying current employees and attracting potential hires.

Benefits consultants are also judged by the impact their recommended services have on both employers’ healthcare costs and employees' usage.

Telemedicine is a great tool for ensuring employee health and happiness with cost-effective and convenient access. Telemedicine should also save the employer money. When it accomplishes both goals, telemedicine is a win-win for employees, employers and even benefits consultants.

But how can employers and benefits consultants measure telemedicine success? There’s one magic number: Utilization.

The Magic Number in Telemedicine

Utilization rate is the magic number in telemedicine and the best way to measure success.

Telemedicine utilization equals the number of virtual doctor visits divided by the number of covered employees. If a company has 1,000 employees and those employees collectively make 500 visits, then the company’s utilization rate is 50%.

As of 2021, 96% of employers offered telemedicine as a benefit, according to Kaiser Family Foundation's 2021 Employer Health Benefits Survey. Plus, as a result of the pandemic, virtual care visits have grown exponentially with 64% of US households having had a virtual care appointment in the past year. In 2018, Willis Towers Watson’s Healthcare Changes Ahead survey revealed only 2% of Americans had a telemedicine visit. That's a 3,100% increase in virtual care visits over just 4 years.

Even with growing usage, industry averages for utilization are typically only between 2-20%.

Why Utilization Rate is Vital

If employees don’t use the service, nobody wins: Not employers and not employees. Without ongoing employee engagement, all the savings and perks go untapped.

When employees use telemedicine, they avoid more expensive care such as the emergency room, urgent care or a doctor's office visit. As a result, employees save on copayments and out-of-pocket costs, and employers save on healthcare claims. Plus, employees see soft benefits, such as saving time, avoiding childcare coordination, eliminating waiting-room frustration and so much more.

Every employer should know their telemedicine provider’s magic number, yet many don’t. Among those who do, many are seeing a disappointingly low one. That’s because many telemedicine providers either don’t offer reporting or because performance metrics are buried in their reports and not easy to locate.

Employee utilization rate is undoubtedly the most important factor affecting cost savings for employers — but it doesn’t end there. High utilization rates indicate an engaged employee base that feels cared for, promoting higher satisfaction levels and increased company morale. Employers can also expect to attract and retain more top talent and see higher levels of productivity when telemedicine utilization rates are higher.

Utilization should also be guaranteed and employee engagement efforts should be fueled by the provider of the telemedicine service. Most telemedicine companies do neither, resulting in lower utilization and a poor experience. Many facts and figures swirl around HR departments, but it is vital that employers are made aware of the key numbers that drive results. Employee utilization rate is number one in telemedicine: It drives ROI (return on investment) and best represents the value the service is delivering. For employers to see what value their telemedicine benefits are providing, the utilization rate should be front and center in any and all reports from the service provider.