Human Capital & Careers

How to Reap the Benefits of Telemedicine

Telemedicine services can lower employers' health-care costs, but only if employees use them — and few do.
Mercer and Beth UmlandAugust 29, 2018
How to Reap the Benefits of Telemedicine

It feels as if telemedicine has been the “next big thing” in health care for a long time now. According to Mercer’s most recent national health-care survey, 71% of employers with at least 500 employees report that their employees now have access to telemedicine services, either through their health plan or through a specialty vendor contracted outside the plan.

But in most organizations, employee utilization rates remain frustratingly low.

A Better Way to Do Ecommerce

A Better Way to Do Ecommerce

Learn how Precision Medical leveraged OneWorld to cut the cost of billing in half and added $2.5M in annual revenue.

Telemedicine can be a win for both the employee, who benefits from greater convenience and lower out-of-pocket costs, and for the employer — if, for example, employees make fewer unnecessary trips to the emergency room or urgent care.

But it works only if employees use the service. Employers with programs in operation in 2016 reported that just 7% of eligible employees, on average, used telemedicine at least once.

Changing behavior is hard, and changing health-care behavior seems especially hard. How can you encourage employees to try telemedicine? Most likely, you will need to take action on two fronts: plan design and communications.

A closer look at our survey data shows that higher utilization is associated with lower copays. Among employers reporting utilization rates of 10% or higher, the median copay for telemedicine was $15. But in the group with below-average utilization rates — 6% or less — the median copay was $30.

Beth Umland

You might be surprised that a relatively small difference in cost would affect whether someone chooses to use telemed, given that consumers are not terribly price-sensitive when it comes to selecting a primary care physician, for example.

But consumers know that a possible outcome of the call is being told that an office visit is necessary after all — in which case the telemed visit is an additional cost.

Interestingly, waiving the copay entirely doesn’t significantly increase utilization over a low copayment. Only 18% of large employers that offer telemed charge nothing for a telemed visits. Among this group, the average utilization is 11%.

But reducing or even waiving the copay alone won’t work if employees aren’t aware of the telemedicine benefit, don’t know how it works or what to expect, or don’t know how to access it. Here are a few tips on communication that works:

  • Testimonials. Real-life examples of how peers benefited from the service can help boost awareness and thus utilization.
  • Time-specific notifications. Look at communication materials that address how the service can be utilized during specific times of the year —winter communications about the flu, spring communications about allergies and the pollen season, etc.
  • Use the employer’s existing wellbeing portal to help promote the service.
  • If there an incentive program is in place, consider a way to “reward” members for completing the telemedicine pre-use application form.

It’s also worth considering the quality of the telemedicine program offered. A majority (57%) of large employers provide telemedicine via the health plan, but 15% contract with a specialty vendor outside the plan. The average utilization rate is twice as high for the latter group — 12% vs. 6% among those offering through the health plan — even though the average copay amounts are virtually the same.

We don’t have the data to say what they are doing to drive higher utilization. But if your program isn’t getting the traction you would like, it’s a question you may want to bring up with your vendor.

Beth Umland is director of research for Mercer’s health business. Mercer’s Emily Ferreira and Bill Lown also contributed to this article.