Since the public health emergency of the COVID-19 pandemic began, telehealth has been positioned as a leading solution to health care access challenges. But the utilization data tells a more nuanced story about how telehealth is actually being used today (and by whom), and whether the latest policy measures and funding figures are right-sized to market realities. Recently, pandemic-era telehealth provisions were extended in the omnibus bill.
From private companies to health care associations, stakeholders have pushed for Congress to make flexibilities permanent post-pandemic, calling the technology ubiquitous, among other characteristics.
On the surface, extending telehealth policy flexibilities and allocating funds to improve technology access make sense. Unfortunately, these frameworks become a lot less impactful if the technology they support is far from ubiquitous, only being used by a sliver of the population — which is the very situation we find ourselves in today.
Said another way, facilitating access to telehealth does not guarantee adoption.
Most Americans haven’t used telehealth during the pandemic
It’s important to admit that the majority of Americans did not opt to use telemedicine during the first two years of the pandemic: Data shows only one-quarter of the country (25.6 percent) used telehealth (under its broadest definition) from 2020 to 2021. In fact, telehealth has been operating more like a luxury good (think Chanel or Porsche) than anything else over the past two years, with a similar sized total available market (TAM) of only 10 percent of the population. Data also shows that it’s only a small subset of the market — commercially-insured women from affluent geographics — driving telehealth utilization since the pandemic began.
Knowing who is actually utilizing telehealth, and why, is important for many stakeholders, for many reasons. For policymakers, this knowledge is an important barometer, showing where and how policies have had an impact to date, and where work and adjustments are needed going forward.
As policymakers seek more insight into quality, utilization patterns and outcomes of telehealth, part of the latest spending bill directs the Medicare Payment Advisory Commission (MedPAC) to conduct a study of telehealth in Medicare, with the Centers for Medicare and Medicaid Services (CMS) scheduled to release quarterly utilization data beginning this summer. However, current trends show just how important it is for policymakers to look beyond Medicare utilization data to most effectively develop telehealth policies, especially if the goal is to reach patients that are not currently using the technology, and those who may not know how to access it.
Despite telehealth’s recent deluge of funding, the industry has largely not seen those funds pay off in increasing access for vulnerable populations the most. Instead, telehealth’s top utilizers represent just 1 percent of the US population — a segment that cannot possibly support telehealth’s collective future, including the incredible amount of funding that has been put on one very small roulette square.
Learning from broadband expansion and behavioral health
If we apply predictive probability models to historic telehealth utilization and analyze those forecasts through economic principles, we can reasonably expect that the policy levers being pulled today won’t do much to drive broader, meaningful telehealth utilization in the future, as intended. For example, $65 billion in funds were allocated to expand broadband expansion in rural areas in 2021’s infrastructure bill, on top of the $20 million the Biden administration released in rural telehealth grants that same year.
However, there was no uptick in utilization that followed. Even audio-only telehealth use in areas where broadband access is low has not seen an increase in utilization. In 2021, just 15.5 percent of all telehealth patients used audio-only despite the broadened coverage changes across pay types in 2021. Further, data suggests that audio-only telehealth is actually not preferred in areas with limited broadband, calling into question the extent to which audio-video telehealth use would increase in these same areas even if broadband access issues were fully solved.
The current regulatory frameworks, to date, have not been effective in improving telehealth usage in rural areas. And that is, in part, because legislators, solutions developers and investors are not operating with the right level and kind of data required to be effective.
Data should drive the future of telehealth policy and funding
Ultimately, as we think about telehealth expansion post-pandemic, we need to better align policy initiatives with what the data says at the individual patient level.
It’s also important to consider how both patients and providers value telehealth, as well as the reasons why it is well utilized in certain areas of the industry (eg, dermatology, radiology) over others. For example, providers might not be opting to use telehealth due to lacking payment parity, or choosing to focus more on the modalities of care that can drive more revenue via ancillary services (eg, when patients have an in-person visit, they will likely receive additional care, such as diagnostics, labs and imaging).
Behavioral health is a great example. It’s a specialty that has an overwhelming supply of patients, lends itself well to telehealth care (mental health versus physical medical care), and has the parity to support provider adoption and use.
We also need to closely examine why patients with greater health needs are not using telehealth today — perhaps due to a lack of trust of technology, or a personal preference towards in-person care — and reassess what is required to overcome these challenges.
Telehealth is a market segment that is begging for data-driven strategies and policies that challenge the prevailing narratives with hard evidence. With a more complete and accurate picture of telehealth utilization, stakeholders can take a sharper aim with strategies to advance the technology’s adoption, in the smartest way possible.
Without this level of consideration and analysis, the regulatory flexibilities and health care dollars may keep flowing into the industry, for now, but it’s only a matter of time before the foundation of users cracks, the funding waters run dry, and telehealth expansion becomes an industry after-thought.
Sanjula Jain, Ph.D., is a health care economist. She is health care analytics company Trilliant Health’s chief research officer and senior vice president of market strategy. She serves on the faculty of The Johns Hopkins School of Medicine in the Division of Clinical Informatics and is a co-founder of health care think tank Think Medium. Her research has been published in academic journals including Health Affairs, JAMA, The American Journal of Managed Care, as well as The Journal of Healthcare Management.