Most Hospital Visits Are Avoidable. Employees Need Telemedicine.

Unnecessary hospital visits are costing the U.S. healthcare system $32 billion per year, according to a new study by United Health Group.

The study found that more than half of emergency department (ED) visits could be avoided, with patients instead being treated just as effectively at a doctor’s office or urgent care. Of the 27 million annual visits to the ED, 18 million (67%) were unnecessary.

The ten most common primary care conditions treated at EDs were bronchitis, cough, dizziness, flu, headache, low back pain, nausea, sore throat, strep throat, and upper respiratory infection. Many of these conditions, depending on severity, could also be treated without a visit to an urgent care or a doctor’s office. Instead, many could be treated via telemedicine.

The average cost to treat one of these conditions was $167 at a doctor’s office, $193 in urgent care and $2,032 in a hospital ED. This means the ED visit costs 12 times more than an office visit, and 10 times more than a trip to urgent care.

If these 18 million cases were treated at a doctor’s office, with an average savings of $1,800 per visit, the healthcare system would save $32 billion annually. But this is not the limit of cost savings. Depending on the severity, many of these conditions could be treated via telemedicine would do the job, saving both employers and employees even more.

More Healthcare Savings With Telemedicine

The cost of telemedicine varies widely for both employers and employees.

Some telemedicine providers require a patient copayment of $40-75 per consult but do not charge employers a per employee per month (PEPM) fee. Other telemedicine providers charge employers but do not require copays.

For simplicity, let’s assume each telemedicine visit costs $100 less than a doctor’s office visit. Let’s also assume half of the avoidable visits to a hospital ED (9 million) could be treated via telemedicine. This is reasonable, given that many of the conditions treated at the hospital ED (e.g., nausea and upper respiratory infections) are simple and are already commonly treated via telemedicine.

The result would be that 9 million primary care visits costing an additional $100 each could be avoided, saving $900 million in healthcare costs.

For providers who do not charge a copayment, employees would save even more. And since employees who are not charged a copayment are more likely to use telemedicine instead of going to their primary care physician, employers would likely save more, too.

Employer Impact

Employers can dramatically affect the overall cost of healthcare by offering telemedicine as an employee benefit.

Employees with access to telemedicine need not resort to a hospital ED or urgent care when they come down with a low-grade fever or cough. Instead, they can avoid the time and high cost of in-person care and get effective treatment quickly. As a result, employers, too, save in diverted healthcare claims costs while keeping employees happy and healthy.