Multichannel Delivery in Healthcare: The Impact of Telemedicine Centers in Southern India

Abstract

Telemedicine is increasingly used across the developing world to expand access to healthcare, to improve outcomes and to reduce costs. However, the impact of telemedicine in these settings – particularly on existing physical healthcare delivery channels – has not been thoroughly examined. We use data from one of the largest tele-ophthalmology implementations in the world to examine this issue. Using a quasi-experimental difference-in-differences approach on a dataset of more than 4.8 million visits over almost a decade (Jan 2006–May 2015), we find that telemedicine centers generate a 31% increase in the overall network visit rate, of which 62% comprise new patients, suggesting a substantial increase in access. We also find a 5.1% reduction in hospital visit rates suggesting that some patients substitute hospital visits with telemedicine center visits. We find substantial heterogeneity in the impact of treatment depending on the clinical complexity of patient needs. The rate of eye glasses prescriptions to correct for simple refractive errors increases by 18.5% but the rate of cataract surgery to replace the natural lens in a patient's eye with an artificial lens remains unchanged. The increase in access and treatment rates does not significantly impact the direct costs incurred by patients but reduces their indirect costs (measured as the average distance travelled to care) by 30% (12km). Finally, we find significant spatial heterogeneity in these effects depending on the relative distance of a patient's location from the telemedicine center as well as from the hospital. These results have important implications for the design of telemedicine networks and the portfolio of healthcare services provided through them.