Telemedicine: The Cost-Effective Future of Healthcare

Healthcare professionals can evaluate, diagnose, and treat patients at a distance using telemedicine.1 Telemedicine is delivered via video-conferencing, audio, or text-messaging using smartphones, tablets, and desktop computers. Over the past few years, not just the demand, but the prices of healthcare services have also gone up significantly.

The increase in healthcare spending per person concerns payers, and they are actively seeking methods to keep healthcare costs in check. Telemedicine has been able to bridge the gap to some extent and could very well be the key resource payers need. As technology is rapidly developing, so is the widespread accessibility and affordability to primary telemedicine tools that could result in lower healthcare costs. An appointment via telemedicine costs, on average $79,  as compared to $146 for a doctor’s office visit, and $1,734 for an emergency room visit, according to a RAND Corp. study.2


Telemedicine allows healthcare systems, physician practices, and skilled nursing facilities to provide care to patients more efficiently. Technologies, such as artificial intelligence diagnosis, medical streaming devices, and electronic medical records can better facilitate providers in the diagnosis and treatment of a patient’s symptoms. These technologies also allow providers to monitor patients in real-time and adjust treatment plans accordingly.

Furthermore, data mining and analysis can lead to greater accuracy of diagnoses and treatment plans. Physicians can attend to more patients without the need to hire additional staff or increase office space. Ultimately, this leads to improved patient outcomes at a lower cost. A report by The Rural Broadband Association estimates that the U.S. national average of hospital cost savings per medical facility is $20,841.3

Telemedicine allows patients with limited access to healthcare services to see a physician without leaving their home or traveling to a hospital or physician’s office. The waiting time for patients has gone down, and the spread of contagious disease is reduced as patients don’t have to be exposed to others in the waiting room. Handicapped individuals who are unable to leave their home can now get treatment with the use of medical streaming devices.

While employers promote the use of telemedicine, the expanding use of the technology can lower employer spending by $6 billion per year.4 Furthermore, by lowering readmission rates and complications, payers can enjoy lower costs. The cost per treatment is now cheaper overall and offers additional cost savings. Market drivers include the increased demand for self-care and reduced incidences of chronic conditions. The desire for more convenient and immediate care, coupled with the rising costs of healthcare in the US have contributed to the upsurge of telemedicine.


In 2015, the global telemedicine market was valued at $18 billion, and estimated to grow by 18.3% CAGR (Compound Annual Growth Rate) each year,reaching $113.1 billion by 2025. In 2015, the US telemedicine market was worth $7.2 billion and predicted to grow to $35 billion by 2025.5 In 2015, Medicare paid $22.45 million for virtual care, spread across 0.3 million claims and in 2016, the same expense amounted to $28.75 million, spread across 0.5 million claims. This includes payments made to distant site providers and originating site payments. In 2016, we saw a 28% increase in payments and a 33% increase in claims submitted. This growth in payments is attributable to more providers using telemedicine with their traditional Medicare Fee-for-Service beneficiaries and not fee schedule rate increases. Therefore, the growth rate of Medicare reimbursement for telehealth is encouraging the global telemedicine market growth.

Risks affecting the adoption of telemedicine technologies

Telemedicine cannot entirely replace traditional methods, especially for critically ill patients. Also, there are risks involved when communicating with patients through telehealth in the sense that the telehealth interaction itself could lead to data privacy or security law violations. Because patients are not physically present at the appointments, there can be an increased risk of disclosing information to the wrong person, or patient, which under the HIPAA (Health Insurance Portability and Accountability Act) Privacy Rule would likely be an unauthorized disclosure.

Per HIPAA, there have been 2,546 healthcare data breaches between 2009 and 2018. Those breaches resulted in the theft of 189,945,874 healthcare records. That equates to more than 60% of the US population.6 Also, the absence of well-defined reimbursement criterion for public and private payers remain one of the biggest threats to widespread telemedicine utilization and adoption. Moreover, strict state licensure laws and requirements, as well as state medical laws, prevent physicians from offering telemedicine services.


For many years telemedicine has been used in different forms. As the technology evolves, it is increasingly becoming available at a lower cost and with increasing sophistication, thereby linking patients to providers in real-time over greater distances.

The development and utilization of devices that make virtual care more valuable by providing real-time patient data are also progressing. Increasingly, telemedicine is a way for medical practices to gain a competitive advantage.


  1. (n.d.). What is Telemedicine? | Chiron Health. Retrieved from chironhealth:
  2. Scott Ashwood, A. M.-P. (2017). Direct-To-Consumer Telehealth May Increase Access To Care But Does Not Decrease Spending. Virginia: Health Affairs.
  3. Anticipating Economic Returns of Rural Telehealth. (2017, March 28). Retrieved from ntca:
  4. Webster, K. (2018, 10 19). Employers, insurers work to knock down barriers to telemedicine – C-TAC. Retrieved from thectac:
  5. Telemedicine Market Size Worth $113.1 Billion By 2025 (n.d.). Retrieved from
  6. Healthcare Data Breach Statistics. (n.d.). Retrieved from hipaajournal: