Impact of Telehealth Use on Healthcare Utilization: A Quasi-experimental Study of Maryland Patients

Abstract

Telehealth helps transform traditional healthcare delivery processes to improve access to care. It has witnessed a surge in popularity since the advent of the COVID-19 pandemic, as both patients and providers have adopted telehealth services for various types of outpatient services. However, there is a lack of empirical evidence on whether telehealth use leads to better care while lowering utilization and costs. In this research, we systematically study the impact of telehealth on healthcare utilization both in outpatient and inpatient settings, across a heterogeneous population of chronic and non-chronic disease patients. Our data on use of telehealth services is based at a granular level of patient-provider visits, drawing on patient encounters in the state of Maryland from 2012 to 2018 for both outpatient and inpatient settings. Our analysis indicates a 31% reduction (or 1.3 visits) in the number of outpatient visits, equivalent to $1,117 in cost, within 30 days after a telehealth visit. Our results suggest that the benefits of telehealth are realized primarily among chronic disease patients in outpatient settings. Specifically, chronic patients exhibit a significant reduction of 1.9 outpatient visits (an equivalent cost reduction of $1,297) when they are treated via telehealth, suggesting a substitution effect of telehealth with respect to traditional clinic visits. However, non-chronic patients experience a 45% increase in their inpatient admissions, within 30 days after a telehealth visit, suggesting a gateway effect in inpatient settings. We also observe that the number of preventive procedures increases for chronic disease patients after telehealth, suggesting that such patients benefit from telehealth by undergoing preventive, follow-up care and avoidance of costly, ER or inpatient services. Our research addresses the growing debate over the effectiveness of telehealth use and provides much-needed empirical evidence on the specific business and clinical values of telehealth. Our findings have important implications for healthcare providers and policy makers with respect to the potential for increasing access to telehealth services in a value-based care environment.