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Overpaying for Telemedicine: A Common Conundrum

Telemedicine services are designed to reduce medical costs, but some employers don't see the benefit because they are paying more than $500 for every employee visit. That price is well above what even traditional medical care costs. Why does this happen? More importantly, how does it impact a company's bottom line and how can we change it?


If employees aren't utilizing the service, it will simply be overhead with no return. Surprisingly, not all telemedicine services have low utilization rates. In fact, some have rates as high as 40%. With utilization rates that high, the average cost drops dramatically. The goal must be to increase utilization to save money.


One way to improve utilization is to educate employees about the 24/7, on-demand, and no-travel benefits of telemedicine. Another way is to increase PEPM costs while reducing the per-visit charge or copay (sometimes to nothing) to reduce barriers to use. In fact, there are myriad ways to improve telemedicine utilization, but employers need to recognize how important employee engagement is.


An investment in educating employees about telemedicine services is an investment in a company's bottom line. Many telemedicine providers will even offer contractual guarantees that they will do what it takes to ensure a company pays less for medical care. In the end, the goal should be at least 40% utilization to recognize serious cost savings.

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