Telehealth in Primary Care: Its Benefits and Limitations

Telehealth in Primary Care: Its Benefits and Limitations

by Ree Health Tech

Telehealth has dramatically changed how primary care is delivered, especially since the COVID-19 pandemic. Analyses of commercial claims in 2022 show that telehealth services were mostly rendered by primary care, psychiatry and psychology clinicians, as well as social workers. This shift expands healthcare access. It’s also introduced new challenges and opportunities for providers and patients that use telehealth in primary care. 

In this article, we’ll explore the various facets of telehealth in primary care, its benefits, challenges, and best practices for implementation.

Contents

Benefits of Telehealth in Primary Care

Let’s look at some advantages of using telehealth in a primary care practice.

Cost-effectiveness

Telehealth can be cost-effective for both healthcare providers and patients. It reduces overhead costs for healthcare facilities and lowers patient expenses related to transportation and time off work.

  • Reduced Overhead: Healthcare providers can save on costs related to office space, utilities, and administrative staff.
  • Lower Patient Costs: Patients save money on travel expenses and can avoid taking unpaid time off work for appointments.
  • Efficient Resource Use: Telehealth can help optimize the use of healthcare resources by reducing the need for in-person visits for minor issues.

Increased access to care

Elderly woman on Zoom with health provider

Telehealth has made healthcare more accessible, especially for those in remote or underserved areas. Patients no longer need to travel long distances to see a doctor. This is particularly beneficial for people with mobility issues or those without reliable transportation.

  • Remote Access: Telehealth allows patients in rural areas to access specialists and primary care providers without the need for travel.

  • Convenience: Patients can schedule appointments at times that work best for them, reducing the need to take time off work or arrange childcare.

  • Reduced Costs: Telehealth can save patients money on travel expenses and lost wages from taking time off work.

Improved patient engagement

Telehealth makes it easier for patients to stay in touch with their healthcare providers. This can lead to better patient adherence to treatment plans, and improved health outcomes (Hatef et al., 2024). A few specific telehealth offerings that help improve patient engagement are:

  • Continuous Monitoring: Telehealth allows for continuous monitoring of chronic conditions, allowing for prompt interventions.

  • Follow-Ups: Virtual follow-up appointments can ensure that patients are following their treatment plans and making necessary lifestyle changes.

  • Patient Education: Telehealth platforms can provide educational resources to help patients understand their conditions and treatments better.

Telehealth case management (TCM)

Black man using his blood pressure monitor at home

In a Canadian study, health providers noted that TCM helped them to effectively coordinate care and support patients’ self-management, including remote monitoring, which improves patient engagement between visits.  

TCM is well-suited for activities like check-ins, refills, reminders, and care coordination, but in-person appointments are often required for complex needs and initial assessments. Providers noted that video visits can help bridge the gap between in-person and phone visits, but the lack of face-to-face interaction can obscure visual health cues (Delahunty-Pike et al., 2023).

Phone visit attendance vs. video visits

A study published in the Journal of General Internal Medicine compared non-attendance rates for telehealth and in-person primary care visits at a large urban healthcare system (Chen et al., 2022). The researchers found that telephone visits had similar or lower non-attendance rates compared to in-person visits, but video visits had higher non-attendance rates. This suggests that phone visits may be easier for patients than video visits.

They also identified certain demographic groups that had consistently higher or lower non-attendance rates across visit modalities. Patients who were White, male, and had public insurance or no insurance, and generally had higher non-attendance rates. In contrast, patients who were Asian or had more comorbidities had lower non-attendance rates.

These findings highlight the importance of considering patient preferences, digital access, and demographic factors when implementing telehealth services. 

Telehealth Challenges and Limitations

While telehealth has many advantages in healthcare, it also presents several challenges that healthcare providers and patients must navigate.

Frustrated woman with hand up and laptop

Technical barriers

The technical barrier is one of the biggest challenges people face when using telehealth. Some patients don’t have access to the necessary technology or the digital literacy to use telehealth platforms effectively.

  • Internet Connectivity: Reliable internet access is essential for telehealth, but not all patients have access to high-speed internet.
  • Access to Devices: Some patients may not have access to smartphones, tablets, or computers needed for telehealth visits.
  • Digital Literacy: Patients and providers need to be comfortable using telehealth technology.

Health insurance squeeze heart

Telehealth regulations and reimbursement policies vary widely, which can create challenges for healthcare providers (Mechanic et al., 2022).

  • Variable Regulations: Telehealth regulations differ by region, making it challenging for providers to navigate the legal landscape.

  • Reimbursement Challenges: Obtaining reimbursement for telehealth services can be difficult, as insurance policies and government programs may not always cover these services.

  • Licensing Issues: Providers may need to be licensed in the state where the patient is located, which can complicate the delivery of telehealth services.

Quality of care concerns

Some healthcare providers and patients are concerned about the quality of care delivered via telehealth. While telehealth can be effective for many types of care, it may not be suitable for all situations.

  • Physical Examinations: Certain conditions require a physical examination, which can be difficult to perform remotely.

Best Practices to Implement Telehealth in Primary Care

To successfully implement telehealth in a primary care practice, there are several best practices healthcare providers should consider.

Technology and infrastructure

Implementing telehealth successfully requires investment in reliable technology and infrastructure.

  • Reliable Platforms: Healthcare providers should invest in robust telehealth platforms that offer high-quality video and audio capabilities.

  • Cybersecurity: Protecting patient data is crucial. Providers should implement strong cybersecurity measures to ensure patient privacy.

  • Technical Support: Offering technical support to both patients and providers can help overcome some of the technical barriers to telehealth.

Training and support

Workplace presentation

Proper training and support are essential for both healthcare providers and patients to use telehealth effectively.

  • Provider Training: Healthcare providers should receive comprehensive training on how to use telehealth platforms and deliver care virtually.

  • Patient Support: Providing patients with resources and support can help them navigate telehealth platforms and feel more comfortable with virtual visits.

  • Ongoing Education: Continuous education for providers and patients can help keep them updated on best practices and new developments in telehealth.

Patient-centered approaches

patient lying on couch in therapist office

Health providers should customize telehealth options to meet the individual needs of their patients and ensure the best possible outcomes. Some ideas:

  • Personalized Care: Telehealth services should be customized to address the specific needs and preferences of each patient (Cannedy et al., 2023).

  • Managing Cost Expectations: It’s important to manage patient expectations around insurance coverage and reimbursement for telehealth, as uncertainty can deter long-term investment (Khairat et al., 2023).

  • Patient Education: Patients, especially older adults, may struggle to remember information from telehealth visits and miss printed summaries. Sending visit summaries via a patient portal and referencing educational videos can mitigate these issues (Khairat et al., 2023).
  • Feedback Mechanisms: Incorporating patient feedback can help improve telehealth services and ensure they meet patient needs.

  • Accessibility: Ensuring that telehealth platforms are accessible to all patients, including those with disabilities, is essential for providing equitable care.

Work-life balance improvement

Telehealth in primary care has shown mixed effects on healthcare providers (Cannedy et al., 2023). 

In a report for the Veterans Health Administration (VA), some primary care team members reported that telehealth increased their job flexibility and reduced burnout, with shorter patient visits. 

However, others experience anxiety and reduced job satisfaction due to challenges in remote patient management, workflow changes, and technology issues. 

To improve telehealth adoption and satisfaction among healthcare professionals, effective education, quality technology, and better workflow integration are crucial. Overall, the impact of telehealth on provider well-being and job satisfaction remains complex and varied.

Future of Telehealth in Primary Care

As telehealth continues to change and improve, we must explore its potential developments and trends.

Integration with traditional care

The future of telehealth in primary care will likely involve a hybrid model that combines in-person and virtual visits.

  • Hybrid Models: Combining telehealth with traditional in-person visits can provide a more comprehensive approach to care.

  • Preventive Care: Telehealth can also be used for preventive care, such as routine screenings and health education.

  • Chronic Disease Management: Telehealth can be particularly effective for managing chronic conditions, allowing for regular monitoring and timely interventions.


    A study of patients with chronic conditions found that physical exams make up a small percentage of in-person chronic condition management consultations. Discussions are critical for clinicians when they update treatment plans, as history-taking is more important than physical exams for diagnoses (Ward et al., 2023).

Advancements in Telehealth Technology

Emerging technologies are likely to play a significant role in the future of telehealth.

Policy and Regulation Evolution

As telehealth continues to grow, policies and regulations will need to evolve to support its use.

  • Policy Changes: Post-pandemic changes to telehealth policies may make it easier for providers to offer telehealth services.

  • Standardization: Efforts to standardize telehealth practices and reimbursement policies can help ensure consistent and equitable access to telehealth services.

  • Licensing Reforms: Reforms to licensing requirements can make it easier for providers to offer telehealth services across state lines.

Conclusion

Telehealth in primary care is here to stay. Its suitability depends on several factors like patient preferences, digital access, health conditions, and provider needs. While it offers flexibility, disparities in internet access and workflow disruptions can undermine its advantages.

To improve access and engagement in care, health providers must address barriers and design telehealth services that better meet the needs of diverse patient populations (i.e., in demographics, technical skill, and access).

The integration of telehealth with traditional care models will likely continue to evolve, making healthcare more accessible and efficient. By adopting best practices and leveraging technological advancements, healthcare providers can improve the telehealth experience for their patients, and increase engagement. 

Explore the possibilities of telehealth in your practice today and join the movement towards a more connected and patient-centered healthcare system.

References

Cannedy, S., Leung, L., Wyte-Lake, T., Balut, M. D. Dobalian, A., Heyworth, L. Paige, N. M. & Der-Martirosian, C. (2023). Primary Care Team Perspectives on the Suitability of Telehealth Modality (Phone vs Video) at the Veterans Health Administration. Journal of Primary Care & Community Health. 14(1-8). doi:10.1177/21501319231172897

Chen, K., Zhang, C., Gurley, A., Akkem, S., & Jackson, H. (2023). Appointment Non-attendance for Telehealth Versus In-Person Primary Care Visits at a Large Public Healthcare System. Journal of General Internal Medicine; 38, 922–928. doi.org/10.1007/s11606-022-07814-9

Delahunty-Pike, A., Lambert, M., Schwarz, C., Howse, D., Bisson, M., Aubrey-Bassler, K. Burge, F., Chouinard, M., Doucet, S., Luke, A., Macdonald, M., Zed, J., Taylor, J, & Hudon, C. (2023). Stakeholders’ perceptions of a nurse-led telehealth case management intervention in primary care for patients with complex care needs: a qualitative descriptive study. BMJ Open; 13:e073679. doi:10.1136/bmjopen-2023-073679

Hatef, E., Wilson, R. F., Zhang, A., Hannum, S. M., Kharrazi, H., Davis, S. A., Foroughmand, I., Weiner, J. P., & Robinson, K. A. (2024). Effectiveness of telehealth versus in-person care during the COVID-19 pandemic: A systematic review. Npj Digital Medicine, 7(1), 1-10. doi.org/10.1038/s41746-024-01152-2

Khairat, S., Chourasia, P., Muellers, K. A., Andreadis, K., Lin, J. J., & Ancker, J. S. (2023). Patient and Provider Recommendations for Improved Telemedicine User Experience in Primary Care: A Multi-Center Qualitative Study. Telemedicine Reports, 4(1), 21-29. doi.org/10.1089/tmr.2023.0002

Mechanic, O. J. , Persaud, Y., & Kimball, A. B. (2022). Telehealth Systems. StatPearls. Retrieved from https://www.ncbi.nlm.nih.gov/books/NBK459384/

Telehealth Utilization Fell Nearly Four Percent Nationally in June 2022. (2022). FAIR Health. Retrieved from https://www.prnewswire.com/news-releases/telehealth-utilization-fell-nearly-four-percent-nationally-in-june-2022-301621770.html

Ward, K., Vagholkar, S., Lane, J., Raghuraman, S., & Lau, A. Y. (2023). Are chronic condition management visits translatable to telehealth? Analysis of in-person consultations in primary care. International Journal of Medical Informatics; 178, 105197. doi.org/10.1016/j.ijmedinf.2023.105197

Understanding Your Telehealth Insurance Options

Understanding Your Telehealth Insurance Options

by Ree Health Tech

The convenience of healthcare access from your home makes telehealth more popular than ever. According to McKinsey, telehealth usage has stabilized at levels 38 times higher than before the pandemic. This surge in virtual care has prompted many insurance providers to expand their telehealth coverage, but you may not know how their telehealth insurance options work. 

Whether you’re looking for convenient access to medical professionals or seeking cost-effective healthcare solutions, you need to understand the telehealth insurance options available to you.

First, let’s explore what telehealth is and why coverage matters.

Contents

What is Telehealth and Why is Insurance Coverage Important?

Telehealth has become a buzzword in recent years, especially with the rise of digital health platforms and the COVID-19 pandemic. 

Telehealth, fairly synonymous with telemedicine, refers to the use of tech to provide healthcare services remotely. This can include video consultations, secure messaging, remote monitoring, texting, audio-only calls, and even virtual prescription refills. 

Benefits of telehealth services

In November 2021, 55% of respondents said they were more satisfied with telehealth or virtual care visits than with in-person appointments. 35% use other digital services, such as ordering prescriptions online and home delivery.

Telehealth benefits patients and healthcare providers in many ways (Hasselfeld, n.d.):

  • Convenience: Patients can consult with their healthcare providers from the comfort of their homes, which eliminates the need for travel and reduces wait times.

  • Access to Care: Telehealth is particularly beneficial for people in rural areas or those with mobility issues, providing access to specialists and primary care providers who may not be available in the local area.

  • Cost-Effective: By reducing the need for physical visits, telehealth can lower healthcare costs for both patients and providers.

  • Preventive Care: Regular virtual check-ups can help in the early detection and management of chronic conditions, improving overall health outcomes.

Importance of insurance coverage for telehealth

Insurance coverage for telehealth services is crucial for several reasons:

  • Reduced Out-of-Pocket Costs: Without insurance, telehealth costs can add up quickly. Insurance coverage helps mitigate these expenses.

  • Access to a Broader Network: Insurance plans often have agreements with a network of providers, making it easier for patients to find in-network telehealth services.

  • Comprehensive Care: Insurance can cover a wide range of telehealth services, from primary care to specialist consultations, ensuring that patients receive comprehensive care.

Now that we understand the basics of telehealth, let’s look at the different types of insurance plans that offer coverage for these services.

Types of Insurance Plans with Telehealth Coverage

When it comes to telehealth, not all insurance plans are created equal. 

One study found that insurers paid less for third-party telehealth visits than in-person care. Before COVID-19, only six U.S. states required equal payment for telehealth and in-person visits. By late 2021, more states adopted these laws, reducing potential cost savings for insurers as telehealth payments increased (Cuellar et al., 2022).

Here’s a breakdown of the different types of insurance plans that cover telehealth services.

Traditional health insurance 

Most traditional/private health insurance plans now include telehealth benefits. These plans cover a variety of services such as video consultations, e-prescriptions, and remote monitoring (HRSA, 2023).

Standalone telehealth insurance

Some companies offer standalone telehealth insurance plans. These are subscription-based services that provide unlimited access to telehealth consultations for a monthly fee.

However, there may be limitations like the specific types of care covered, requiring initial in-person visits, or capping the number of telehealth visits. Recently, many private insurers have started providing telehealth services through third-party platforms like Teladoc or AmWell (Healthcare Service Corporation, 2020).

Medicare and Medicaid

Medicare Part B covers certain telehealth services, including virtual visits with doctors and specialists (Medicare.gov, n.d.). Medicaid coverage for telehealth varies by state, but many states have expanded their telehealth benefits in recent years (Schwamm et al., 2017).

Employer-sponsored plans

People sitting in an auditorium for a presentation

Many employers offer health insurance plans that include telehealth services. These plans often come with additional benefits like mental health services and secure messaging with healthcare providers.

With various telehealth insurance options available, it’s important to know what features to consider when evaluating plans.

What to Look for in Telehealth Insurance Plans

Choosing the right telehealth insurance plan can be overwhelming. Here are some key features to consider.

Scope of covered services

Ensure the plan covers a wide range of services, including:

  • Primary Care: Regular check-ups and preventive care. Many plans cover virtual visits for routine health assessments.

  • Mental Health: Access to telepsychiatry and counseling services. Mental health services via telehealth can be as effective as in-person visits.

  • Specialist Consultations: Ensure the plan includes virtual visits with specialists like cardiologists, and dermatologists. This can save time and reduce the need for physical referrals.

Network of available providers

A robust network of in-network providers ensures that you have access to a variety of healthcare professionals without incurring additional costs. Check if the plan includes:

  • Local Providers: Access to local healthcare providers who offer telehealth services.

  • Specialists: A wide range of specialists are available for virtual consultations.

  • National Networks: Some plans offer access to national networks of providers, which can be beneficial if you travel frequently.

Cost-sharing 

Bottle of pills spilled on currency

Healthcare marketplaces offer affordable individual health insurance plans. These plans must meet standards for cost-sharing, which are the out-of-pocket expenses people pay for medical services. 

Cost-sharing typically includes deductibles, copayments, and coinsurance, though not all plans use all three types (Rakshit et al., 2023):

  • Copayments: The fixed amount you pay for each visit. The fixed amount you pay for each telehealth visit. Some plans may offer lower copayments for virtual visits compared to in-person visits.

  • Deductibles: The amount you need to pay out-of-pocket before the insurance starts covering services. You may want to pair a high-deductible plan with Health Savings Accounts (HSAs) to help manage costs.

  • Coinsurance: The percentage of costs you share with the insurance company after you’ve paid your deductible. For example, a plan might cover 80% of the cost, leaving you to pay the remaining 20%.

Technology platforms and user experience

The technology with a telehealth platform should be easy to use. Look for features like:

  • User-Friendly Interface: An intuitive and easy-to-use platform.

  • 24/7 Availability: Access to healthcare services at any time.

  • Short Wait Times: Minimal waiting period for consultations.

Quality of care

Nursing colleagues in hall wearing blue

While convenience is a significant factor, the quality of care should not be compromised. Look for plans that ensure (Wolters Kluwer, 2023):

  • Clinical Effectiveness: The platform should support high-quality care across different specialties like chronic conditions and mental health issues.

  • Access to Resources: Plans that provide easy access to educational resources can empower patients to take control of their health.

Several insurance companies offer telehealth coverage, each with its own features and benefits. Here’s a comparison of some popular providers in the following table with info from the Center for Connected Health Policy (2021).

ProviderProsConsUnique FeaturesCustomer Satisfaction
AetnaComprehensive coverage & wide networkHigher premiumsIntegration with CVS HealthHigh
Blue Cross Blue ShieldBroad coverage & various plan optionsVaries by stateSpecialized telehealth programsHigh
Kaiser PermanenteIntegrated care model & user-friendly appLimited to certain regionsSeamless care coordinationVery High
UnitedHealthcareExtensive provider network & 24/7 availabilityComplex cost-sharingVirtual health assistantsModerate

Studies show patients prefer video telehealth over audio-only, reporting higher satisfaction and better outcomes. Video telehealth users are less likely to need emergency or in-person care (Lee et al., 2023). 

Armed with knowledge about different plans and their key features, let’s learn how to pick the best telehealth insurance plan for your needs.

How to Choose the Right Telehealth Insurance Plan for You

Doctor and patient virtual meeting both male

Selecting the right telehealth insurance plan requires careful consideration of your healthcare needs and preferences. Here are some steps to guide you.

Assess your healthcare needs

Identify your healthcare needs and preferences. Consider the following questions:

  • Do you need frequent specialist consultations?

  • Are mental health services important to you?

  • Do you have any chronic conditions that need regular monitoring?

Evaluate costs

Consider your budget and review the costs associated with each plan, including premiums, copayments, and deductibles.

  • Premiums: The monthly cost of the insurance plan.

  • Out-of-Pocket Costs: Copayments, deductibles, and coinsurance. For example, Medicare Part B covers certain telehealth services after you’ve paid the deductible, with a 20% coinsurance.

  • Additional Fees: Any additional fees for using telehealth services, such as subscription fees for standalone telehealth plans.

Check provider networks

Ensure the plan has a network of providers that includes your preferred doctors and specialists. This can help you avoid out-of-network charges and ensure continuity of care.

Review policy terms

Med insurance policy paper

Read the policy terms and conditions carefully. Look for any exclusions or limitations on telehealth services (Upvio, n.d.). For example, some plans may limit the number of telehealth visits they cover per year.

Consider integration with an existing plan

If you already have a health insurance plan, check if the telehealth plan works seamlessly with your existing coverage to provide a more comprehensive healthcare solution.

Tips to Maximize Your Telehealth Insurance Benefits

Once you have chosen a telehealth insurance plan, here are some tips to get the most out of it.

Medicare card and Rx closeup

Understand your coverage limits

Know the limits and restrictions of your coverage. This includes the number of visits covered and any specific conditions that apply (Upvio, n.d.). For example, some Medicare Advantage Plans offer more telehealth benefits than Original Medicare. 

Prepare for virtual appointments

Prepare for your virtual visit. Get your medical history and questions ready. Ensure you have a stable internet connection and a quiet, private space for the consultation.

Keep records

Maintain records of your telehealth visits and expenses to help you track your healthcare costs and manage your budget. Keeping detailed records can also be useful for any follow-up care or claims disputes.

Communicate effectively

Effective communication with your healthcare provider is key. Be clear about your symptoms and concerns. Beyond calling, you can use secure messaging within your patient portal to ask follow-up questions or clarify any doubts.

Stay informed

Keep track of any updates to your policy. Insurance plans can change, and staying informed ensures you continue to receive the best care. Check for updates from your insurance provider regularly, and review any new benefits or changes in coverage.

Use available resources

Take advantage of any educational resources provided by your telehealth platform. These resources can help you better understand your health conditions and treatment options, and empower you to make informed decisions about your care.

Conclusion

Telehealth insurance options have expanded significantly, providing us with more flexibility, convenience, and access to virtual care. However, navigating telehealth insurance options can be complex. By understanding the various plans available and considering your unique healthcare needs, you can select a telehealth insurance option that provides comprehensive coverage and peace of mind. 

Remember to review your policy on a regular basis and stay informed about new developments in telehealth insurance. Over time, insurance coverage will likely adapt their virtual care options to meet our changing healthcare needs. Take the time to explore your options and make an informed decision to ensure you’re getting the most out of your telehealth insurance coverage.

References

An Analysis of Private Payer Telehealth Coverage. (2021). Center for Connected Health Policy. Retrieved from https://www.cchpca.org/2021/04/Private-Payer-Telehealth-Coverage-Reportfinal.pdf

Bestsennyy, O., Gilbert, G., Harris, A. & Rost, J. (2021). McKinsey & Company. Retrieved from https://www.mckinsey.com/industries/healthcare/our-insights/telehealth-a-quarter-trillion-dollar-post-covid-19-reality

Centers for Medicare & Medicaid Services. (n.d.). Telehealth. Medicare.gov. Retrieved from  https://www.medicare.gov/coverage/telehealth

Cordina, J., Levin, E., Stein, G.  (2022). Consumer Health Insights: How respondents are adapting to the “new normal.” McKinsey & Company. Retrieved from https://www.mckinsey.com/industries/healthcare/our-insights/covid-19-consumer-healthcare-insights-what-2021-may-hold

Cost-Sharing Charges. (2023). Center on Budget and Policy Priorities. Retrieved from https://www.healthreformbeyondthebasics.org/cost-sharing-charges-in-marketplace-health-insurance-plans-answers-to-frequently-asked-questions/

Cuellar, A., Pomeroy, J. M. L., Burla, S., Jena, A. B. (2022). Outpatient Care Among Users and Nonusers of Direct-to-Patient Telehealth: Observational Study. Journal of Medical Internet Research;24(6):e37574. doi:10.2196/37574 

Five key features telehealth patients want: Insights for healthcare developers. (2023). Wolters Kluwer. Retrieved from https://www.wolterskluwer.com/en/expert-insights/5-key-features-telehealth-patients-want-healthcare-developers-insights

Hasselfeld, B. W. (n.d.). Benefits of Telemedicine. Johns Hopkins Medicine. Retrieved from https://www.hopkinsmedicine.org/health/treatment-tests-and-therapies/benefits-of-telemedicine

How to Check Telehealth Insurance Coverage. (n.d.). Upvio. Retrieved from https://upvio.com/blog/telehealth/how-to-check-telehealth-insurance-coverage

Lee, E. C., Grigorescu, V. Enogieru, I., Smith, S. R. Samson, L. W., Conmy, A. B., & De Lew, N. (2023). Updated National Survey Trends in Telehealth Utilization and Modality (2021-2022). Assistant Secretary for Planning and Evaluation (ASPE). Retrieved from  https://aspe.hhs.gov/sites/default/files/documents/7d6b4989431f4c70144f209622975116/household-pulse-survey-telehealth-covid-ib.pdf

Private insurance coverage for telehealth. (2023). Health Resources & Services Administration (HRSA). Retrieved from https://telehealth.hhs.gov/providers/billing-and-reimbursement/private-insurance-coverage-for-telehealth 

Rakshit, S., Rae, M., Claxton, G., Amin, K., & Cox, C. (2023). Private Insurer Payments for Telehealth and In-Person Claims During the Pandemic. Kaiser Family Foundation. Retrieved from  https://www.kff.org/mental-health/issue-brief/early-in-the-pandemic-private-insurers-paid-similarly-for-common-telehealth-and-in-person-claims/

Schwamm L.H., Chumbler N., Brown E., et al. (2017). Recommendations for the implementation of telehealth in cardiovascular and stroke care: a policy statement from the American Heart Association. Circulation;135(7):e24–e44. doi: 10.1161/CIR.0000000000000475

Stay Informed on COVID-19. (2020). Health Care Service Corporation. Retrieved from  https://www.hcsc.com/newsroom/category/company-news/covid-19-information/

The Impact of AI on Healthcare Cost Reduction and Resource Allocation 

The Impact of AI on Healthcare Cost Reduction and Resource Allocation 

by Ree AI Health Tech

In an era where healthcare costs are skyrocketing, AI can be a game-changer. The impact of AI on healthcare cost reduction and resource allocation has been overwhelmingly positive so far. A recent study by Accenture predicts that AI applications in healthcare could save up to $150 billion annually for the U.S. healthcare economy by 2026. 

Let’s see how AI can help reduce costs and staff human resources more efficiently.

Contents

Understanding AI’s Role in Healthcare Cost Reduction

Definition of AI in healthcare 

Artificial Intelligence (AI) in healthcare uses complex algorithms and software to analyze, interpret, and understand complicated medical and healthcare data. AI technologies such as machine learning (ML), natural language processing (NLP), and predictive analytics integrated into various healthcare processes can enhance efficiency and accuracy.

U.S. healthcare costs

Source: American Medical Association

By 2031, almost 20% of U.S. spending will be on healthcare, which is a lot compared to other wealthy countries.

Healthcare costs are a major burden for families in the U.S. According to the Kaiser Family Foundation, about half of American adults find it difficult to afford healthcare costs. 

24% have had problems paying for healthcare premiums, deductibles, or copays in the past year. That number is 33% for those in poor health. These high expenses often lead to delayed care, skipped medications, and financial strain. 

About 100 million people in America have serious medical debt. They often rely on savings, credit cards, and side jobs to make up the slack. This financial pressure underscores the need for cost-effective solutions.

Helping more people afford health care often means the government spends more money. On the other hand, trying to reduce overall spending might increase costs for individuals. This makes health care policy very challenging, with no easy solutions.

Key areas where AI can impact costs

AI can cut healthcare costs in many ways, such as:

  • Administrative Efficiency: Automating routine tasks such as data entry and claims processing can save time and reduce errors.
  • Diagnostic Accuracy: AI can improve diagnostic accuracy, reducing the need for unnecessary tests and treatments.
  • Predictive Analytics: AI can predict patient outcomes and optimize resource allocation, reducing waste and improving care efficiency.

Labor costs are the greatest expense hospitals have, as shown in the following chart.

Source: American Hospital Association (AHA) and Strata Decision Technology

A McKinsey/EIT Health report shows that tasks by several healthcare occupations can be at least partially automated by 2030, providing more cost savings to healthcare organizations. 

Next, let’s look at how AI can improve resource management in hospitals.

AI-Driven Resource Allocation in Hospitals

Facility management

AI can make hospital buildings run smoother by controlling temperature systems to save energy and keep patients comfortable. It also spots equipment problems early, avoiding breakdowns and saving money on repairs (Varnosfaderani & Forouzanfar, 2024). 

Predictive analytics for patient flow and bed management

Empty recovery room

Managing patient flow and bed use is also key for hospital efficiency. AI-driven predictive analytics can predict patient admissions, discharges, and bed availability, allowing hospitals to optimize their resources. 

Hospitals can manage their emergency services with efficiency if they can predict how many emergency patients will come in. They currently use simple guessing methods based on past patterns. 

Hospitals could use real-time patient data from electronic health records (EHRs) to make short-term predictions about bed needs. This ensures that beds are available when needed, reduces the time patients spend waiting for care, and avoids cancelling planned surgeries (King et al., 2022).

Staff scheduling optimization

Using AI for scheduling can reduce overtime costs and prevents staff burnout, leading to better patient care and lower operational costs.

AI can analyze historical data and predict staffing needs, ensuring that hospitals have the right number of staff at the right times. This includes scheduling medical procedures to maximize the use of operating rooms and staff, while minimizing patient wait times (Varnosfaderani & Forouzanfar, 2024). 

Equipment and supply chain management

AI can streamline equipment and supply chain management by:

  • Studying trends 
  • Predicting demand 
  • Optimizing inventory levels 
  • Automating orders

This reduces the risk of shortages and overstocking to cut waste, save money, and ensure that necessary supplies are always available. In emergencies, AI quickly figures out what’s needed and helps get resources where they’re most important (Varnosfaderani & Forouzanfar, 2024). 

Clinical documentation is ever-present in healthcare. Let’s discuss how AI can streamline admin tasks.

Streamlining Administrative Processes with AI

Doctor on the phone

Automating paperwork and data entry

Administrative tasks like paperwork and data entry take time and are prone to errors. But AI can read and sort different forms and reports quickly. 

AI can automate these processes to save time, free up staff to focus on more critical tasks, and reduce the likelihood of mistakes (Varnosfaderani & Forouzanfar, 2024). 

Improving billing accuracy and reducing errors

It takes time and expense to fix billing errors. A study in the insurance industry showed that ML can improve insurance estimates better than traditional methods (Baudry & Robert, 2019). 

AI can improve hospital billing and insurance claim accuracy by automating the coding process and identifying discrepancies before they become issues. This leads to quicker reimbursements and fewer denied claims.

Enhancing insurance claims processing

AI can streamline the insurance claims process by automating the verification and approval of claims. This reduces the time it takes to process claims and improves customer satisfaction by minimizing delays and errors.

Beyond administrative tasks, AI is also making significant strides in improving patient care and treatment.

AI in Diagnostic Accuracy and Treatment Planning

Brain scans

Reducing misdiagnosis rates and associated costs

Misdiagnoses can lead to unnecessary treatments and additional costs. AI can analyze medical data with high accuracy, reducing the likelihood of misdiagnoses and ensuring that patients receive the correct treatment the first time (Khanna et al., 2022).

Personalized treatment recommendations

AI can provide personalized treatment recommendations based on a patient’s medical history and current condition. This ensures that patients receive the most effective treatments, improving outcomes and reducing costs associated with trial-and-error approaches (Alowais et al., 2023).

Early disease detection and prevention strategies

Early detection of diseases can significantly reduce treatment costs and improve patient outcomes. AI can analyze large datasets to identify early signs of diseases, allowing for timely interventions and preventive care (Alowais et al., 2023).

AI can also help diagnose illnesses and assess symptoms with virtual methods in telemedicine and telehealth.

Telemedicine and Remote Patient Monitoring

Phone with chatbot conversation

AI-powered virtual health assistants

Virtual health assistants powered by AI can provide patients with medical advice, schedule appointments, and answer health-related questions. This reduces the need for in-person visits and allows healthcare providers to focus on more complex cases.

Chronic disease management via remote monitoring

AI can monitor patients with chronic diseases remotely, also called remote patient monitoring (RPM). When AI analyzes data from wearable devices, it can notify healthcare providers about any concerning changes to trigger an alert. This proactive approach reduces hospital visits and readmissions, saving costs and improving patient quality of life.

Reducing unnecessary hospital visits and readmissions

By providing continuous monitoring and early intervention, AI can help prevent complications that would otherwise require a patient to return to the hospital. This not only improves patient outcomes, but also reduces the strain on healthcare facilities.

Challenges and Considerations in AI Implementation

Doctor shows tablet to nurse

Initial investment and integration costs

Implementing AI in healthcare requires a high upfront investment in technology and training. While the long-term benefits can outweigh these costs, the initial financial burden can be a barrier for some healthcare providers.

Data privacy and security concerns

AI systems handle vast amounts of sensitive patient data, raising concerns about privacy and security. To implement these systems successfully, healthcare organizations must comply with regulations and protect patient information (Alowais et al., 2023).

Workforce adaptation and training needs

Integrating AI into healthcare workflows requires training staff to use new technologies effectively. This can be challenging, particularly for those who are less familiar with digital tools. Ongoing education and support are essential to ensure that healthcare professionals can leverage AI to its full potential (Alowais et al., 2023). 

Future Outlook: AI’s Long-term Impact on Healthcare Economics

Projected cost savings and efficiency gains

AI has the potential to generate significant cost savings and efficiency gains in healthcare. By automating routine tasks, improving diagnostic accuracy, and optimizing resource allocation, AI can reduce operational costs and enhance patient care (Khanna et al., 2022).

Potential shifts in the healthcare job market

Integrating AI in healthcare systems causes a shift in the job market. While some administrative roles may become redundant, new opportunities will emerge in AI development, data analysis, and technology management. Healthcare professionals will need to adapt to these changes and acquire new skills.

Ethical considerations and policy implications

The use of AI in healthcare raises ethical considerations, such as ensuring fairness in AI algorithms and addressing potential biases. Policymakers should establish guidelines and regulations to ensure that we use AI responsibly and equitably in healthcare (Alowais et al., 2023).

Conclusion

AI’s impact on cost reduction and resource allocation in healthcare is profound and far-reaching. From streamlining administrative tasks to enhancing diagnostic accuracy, AI technologies are valuable allies in the quest for more efficient and affordable healthcare. Successful implementation will require careful planning, ethical considerations, and a commitment to ongoing innovation. 

As AI continues to evolve, its long-term impact on healthcare economics will depend on how effectively these challenges are addressed and how well healthcare providers can integrate AI into their workflows. By embracing AI responsibly, healthcare providers can work towards a future where high-quality care is more accessible and affordable for all.

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