Connecting Rx and Telemedicine

Like many digital-based industries, there has been a significant uptick in telemedicine or telehealth usage due to the impacts of the COVID-19 pandemic. Before the pandemic, there was broad concern around the idea of replacing an in-person doctors’ appointment with a virtual visit as many patients viewed it as a last resort in times of desperate need. Additionally, telemedicine was seen as an out-of-pocket expense that insurance providers simply did not cover that made telemedicine more of a luxury. While telemedicine services are not new, the popularity and demand have skyrocketed since the onset of the pandemic and with some insurers now offering coverage, these services are rapidly transforming the healthcare experience for doctors, patients, and employers. As members utilize their telemedicine benefits more than ever before, it’s important to know how Rx fits in the virtual care realm.

The Uptick in Telemedicine

The unprecedented impact of the pandemic drastically altered the experience employers provide their members. With restrictions on everyday healthcare services, including urgent care, routine checkups and appointments, HR leaders needed efficient and attainable solutions to address member concerns over access to care. As a result, they had to adapt to their evolving healthcare benefits offerings – and fast.

Enter telemedicine. Offering virtual healthcare services presents a safe and cost-effective alternative for employers looking to satisfy their cost-containment and employee health and wellness needs. Among the top trends found in the 2021 Large Employers’ Health Care Strategy and Plan Design Survey was the steep rise in telemedicine use. Nearly all employers reported that they would offer telehealth services for acute concerns, with 91% of respondents claiming to offer mental telehealth, and 52% planning to offer more virtual care options in 2021.

According to the Kaiser Family Foundation (KFF), more than 50 U.S. health systems had telemedicine programs in place prior to the pandemic, with only 15% of physicians utilizing them to interact with patients. This, of course, changed once COVID hit our healthcare system, sending it into a state of shock. The Centers for Disease Control and Prevention (CDC) revealed that the number of telehealth visits increased 50% in the first quarter of 2020, with a 154% increase in week 13 compared to the same period in 2019.

FAIRHealth reported, the volume of claim lines from April 2020, telehealth services accounted for 13% of medical claims, a significant jump from 0.15% the year before. A follow-up report on telehealth claims from December 2019 to December 2020 revealed a 2,817% increase among privately insured employers. This increase in telehealth utilization can ultimately impact pharmacy benefits plans as self-funded employers can attribute prescription volumes to those encounters.

With members utilizing their telemedicine benefits more than ever before, here’s what to consider when evaluating your clients’ virtual care offerings relating to their employees’ needs will be essential to building a competitive benefit.
Kelly Chillingworth, RPh, MHA-Ed

Telemedicine and Rx-Associated Costs

For employers concerned about escalating prescription drug costs, virtual healthcare services are not expected to raise prescription drug spend substantially, as the more costly specialty medications are unlikely to be prescribed for the first time via telemedicine. Prescribing originating from a telehealth visit is typically seen as a replacement for what otherwise would have been an in-person visit for an acute condition. Those visits typically result in the prescribing of less expensive generic medications. Lastly, for remote visits with respect to chronic conditions, medications prescribed are typically ongoing therapy and represent refills. New diagnoses via telehealth may occur. However, with the decrease in patient mobility in 2020, many individuals refrained from routine office visits that ordinarily would have led to a new diagnosis.

A study conducted by Health Affairs before the pandemic found that roughly 12% of telehealth appointments replaced an in-person office visit. The remaining 88% covered services for minor ailments that patients may not have sought without the convenience of virtual care. That balance is expected to shift when 2020 comes under review. Even though a significant uptick in prescription utilization is not expected, potential misuse or unnecessary use of telemedicine may emerge where higher volumes of prescription utilization can occur depending on the member’s condition and physician’s diagnosis.

Lastly, employer plans should be very vigilant against fraud in telehealth services. Online advertisements leading to virtual visits where providers choose from a ‘list’ of available medications to treat certain ailments have appeared. Often these medications are being procured and dispensed from a pharmacy affiliated with that telehealth service and are tied to costly medications that have low clinical value when compared to traditional treatment options.

Despite this, whether providing new or expanding existing telemedicine offerings, having a virtual service model as an option ensures members are receiving the care they need until they can or are comfortable with visiting their provider in person. The bulk of telehealth savings results from driving patients away from higher-priced ER or urgent care visits that a less expensive virtual appointment is capable of managing. Telemedicine can provide savings in the form of lower reimbursement rates and generally offers more affordable service fees than those billed at onsite consultations. Although costs vary, telehealth appointments typically charge around $50 per visit, whereas the traditional face-to-face visit costs around $176. While the savings are attractive, something to be aware of is the possibility of added costs through excessive use of services.

The Bottom Line

Whether telemedicine’s momentum will continue or dwindle once onsite healthcare facilities are more accessible remains to be seen. While it can be challenging to predict the true impact of telemedicine and its associated pharmacy-related costs for self-funded employers, what we do know is that it will vary by plan and how members choose to utilize the services provided in the coverage. As employers increasingly explore telemedicine options, evaluating your clients’ virtual care offerings relating to their members’ needs will be essential to building a competitive benefit.

For more information on the Rx trends impacting pharmacy benefits this year, check out our free e-book, The State of the Pharmacy Benefits Industry: 2021 Edition.

 

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