Penn Medicine Study Crunches Big Numbers to Document Telemedicine Savings

The premise that virtual care can reduce costs vs. traditional in-person appointments has long been touted. Documenting the savings at scale over time can be difficult, however.

But that’s exactly what Penn Medicine did, recently publishing its findings in The American Journal of Managed Care. Research about the Penn Medicine OnDemand telemedicine program for employees showed that virtual visits ended up being 23% less expensive to deliver than in-person appointments.

The OnDemand program primarily focuses on low-acuity, non-urgent or semi-urgent conditions like respiratory infections, sinus infections and allergies.

Researchers from Perelman School of Medicine at the University of Pennsylvania analyzed de-identified data from nearly 11,000 Penn Medicine employees who used the company-sponsored insurance plan. They compared 5,413 visits to Penn Medicine’s OnDemand telemedicine service that were conducted between July 2017 and December 2019 with the same number of in-person visits during that same period.

Per-visit costs for Penn Medicine OnDemand, a co-payment-free 24/7 program for employees, averaged $380 compared with $493 for in-person encounters for the same conditions that occurred in primary care offices, emergency departments or urgent care clinics. The savings of $113 per patient is significant in light of efforts to reduce employee benefit costs, said lead researcher Krisda Chaiyachati, M.D., an adjunct professor of medicine at Penn Medicine, who previously served as medical director of Penn Medicine OnDemand and now serves as physician lead for value-based care and innovation at Verily.

The researchers saw a 10% rise in demand for telemedicine services during the pre-pandemic study period, but the 23% drop in unit cost made it possible for the service to simultaneously be easier for employees to use and less expensive to the employer overall — even after factoring in providers’ salaries and the equipment needed for calls.

Today, with many more patients having developed a comfort level and willingness to choose telemedicine for routine care, future savings could be even higher, Chaiyachati notes.