Administration & Operations, Admin Ops Literature Review, Telemedicine

The Impact of Telemedicine on ED Costs and Utilization: Literature and Strategies Review

Telemedicine may have the potential to modulate health care utilization and costs on a grand scale. The application of telemedicine is being explored as an alternative way of delivering care without impairing patient outcomes.1

Emergency departments (ED) nationwide have been struggling with growing patient volume and boarding issues, leading to increased research focused on the potential for telemedicine to decrease ED utilization and reduce total health care costs.2

Review of Literature

1) Direct-To-Consumer Telehealth May Increase Access To Care But Does Not Decrease Spending
This study compares the total healthcare costs of direct-to-consumer telehealth with traditional ED or physician office visits for acute respiratory infections. Major findings include:

  1. A telehealth visit costs about 5% of an ED visit for an acute respiratory infection, as demonstrated in Exhibit 2.3
  2. Although the per-episode cost was decreased significantly by telemedicine use, the increased convenience led to an increase in utilization.
  3. Telehealth has the potential decrease in spending when care is being substituted for more costly in-person settings. However, new utilization (patients who would not have sought care besides telemedicine) expenses for telehealth services do not outweigh the total cost of substitution for in-person visits. Telehealth can decrease health care expenditure if a large proportion of visits are a substitute for in-person health care visits. 
  4. Increased telehealth utilization could be viewed as beneficial, especially in rural settings where there may be limited access to care.

Authors conclude that telehealth can decrease the per-episode cost but fails to decrease total health care spending due to increased new telehealth utilization. 

2) High-Intensity Telemedicine Decreases Emergency Department Use for Ambulatory Care Sensitive Conditions by Older Adult Senior Living Community Residents
This prospective cohort study analyzes how telehealth affects ED utilization rates of ambulatory care sensitive conditions (ACSCs, conditions that can be managed through primary care) in senior living community residents. When the intervention group fell ill, the patient's provider would choose to care for the patient via traditional in-person methods or telehealth. The intervention group experienced a 34% decrease in ED utilization over the course of a year compared to the control. 517 telemedicine visits were conducted, and of the 96 that were ACSCs, 97.9% of patients did not require an ED visit. In a survey of those who utilized telemedicine, it was found that for 62.3% of the visits, the patient would have been sent to the ED if telemedicine was not an option.4 Authors conclude that despite the lack of statistical significance, the results support the effectiveness and efficiency of telemedicine.

3) The Business Case for Tele-emergency
Data from a large urban regional tertiary care hospital that served as a hub to several rural EDs was gathered on the cost-effectiveness of its tele-emergency services to the rural EDs it served. From the data, it was calculated that the implementation of tele-emergency service would result in a $54,427 per year profit for the hospital.5 The most savings stem from the tele-emergency service substituting for ED physician backup call. The largest expense was the tele-emergency service fee itself, estimated at $90,000; the startup and maintenance expenses were estimated to cost less than $18,400.5 Authors conclude that tele-emergency has potential to increase rural hospital revenue and reduce ED costs. 

4) Does Telemedicine Reduce Emergency Room Congestion? Evidence from New York State
This empirical analysis of telemedicine sought to quantify how telemedicine changes ED dynamics. The authors found that telemedicine use in the ED significantly reduced length of stay by 31% compared to average.6 This result was more profound during times of above average volume and after-hours. These findings were attributed to more efficient exchange of information, reduced waiting time, and more flexible resource allocation. 

5) Impact of Telemedicine Upon Rural Trauma Care
This study analyzes the cost of telemedicine (TM) on patients initially treated at local community hospitals (LCH) before transfer to a trauma center (TC). The group that received care by telemedicine at LCH had their length of stay at the LCH reduced from 47 hours to 1.5 hours. The transfer time to a TC of the telemedicine group also decreased from 13 hours to 1.7 hours. There was a significant decrease in hospital cost between telemedicine and traditional care from $1,126,683 vs. $7,632,624, respectively.7 The cost breakdown between TM and traditional care is demonstrated in Table 2.

Summary of Literature
Telemedicine can be utilized to potentially reduce healthcare costs from both a patient and healthcare delivery system perspective.3,5 Offering telemedicine as an alternative type of urgent treatment may save patients a significant amount of money when compared to a traditional ED visit. In settings such as adult communities, telemedicine services decrease the number of ED visits that can be handled in primary care settings. Combined with the increased efficiency that telemedicine offers there exists substantial potential to decrease hospital spending and ED utilization. More research is needed to completely characterize the economic impact of telemedicine but the present data appears encouraging. 

Looking Forward/What's Next
In the era of COVID-19, applications such as telemedicine are being considered more than ever to see patients from their homes, reducing potential clinician exposure.8  With Medicare now reimbursing telemedicine visits at the same rate as the traditional in-person visit due to COVID-19 there has been rapid adoption of telemedicine by many providers across the United States.9 After the eventual end of the COVID-19 pandemic, telemedicine may continue to be used due to its convenient and cost-effective nature.10 It is possible that Medicare will continue to reimburse telemedicine at the same rate when the pandemic is over, further contributing to the widespread implementation of telemedicine.9 In the ED, telemedicine use may be expanded to other disciplines relevant to operation. Additionally, EDs may learn that telemedicine is most effective during evenings/nights, or during times of peak volumes and choose to offer it only during high yield periods. ­­The effectiveness and efficiency of telemedicine has been proven and will likely continue to become a more routine part of many ED procedures. 

Other Recommended Literature

  1. Ellimoottil C, Lawrence A, Moyer M, Sossong S, Hollander J. Challenges And Opportunities Faced By Large Health Systems Implementing Telehealth. Health Aff (Millwood). 2018;37:1955-1959. 
  2. Jane Li, Laurie Wilson, Stuart Stapleton, and Patrick Cregan. 2006. Design of an advanced telemedicine system for emergency care. In Proceedings of the 18th Australia conference on Computer-Human Interaction: Design: Activities, Artefacts and Environments (OZCHI '06). Association for Computing Machinery, New York, NY, USA, 413–416. 
  3. Latifi R, Weinstein RS, Porter JM, et al. Telemedicine and Telepresence for Trauma and Emergency Care Management. Scand J Surg. 2007;96(4):281-289. 
  4. Miller AC, Ward MM, Ullrich F, Merchant KAS, Swanson MB, Mohr NM. Emergency Department Telemedicine Consults are Associated with Faster Time-to-Electrocardiogram and Time-to-Fibrinolysis for Myocardial Infarction Patients. [published online ahead of print, 2020 Feb 28]. Telemed J E Health. 2020;10.1089/tmj.2019.0273. 

EMRA Administration & Operations Committee Links, Guides and Opportunities


  1. Ekeland AG, Bowes A, Flottorp S. Effectiveness of telemedicine: A systematic review of reviews. Int J Med Inform. 2010;79(11):736-771. 
  2. Krochmal P, Riley TA. Increased health care costs associated with ED overcrowding. Am J Emerg Med. 1994;12(3):265-6.
  3. Ashwood JS, Mehrotra A, Cowling D, Uscher-Pines L. Direct-To-Consumer Telehealth May Increase Access To Care But Does Not Decrease Spending. Health Aff (Millwood). 2017;36(3):485-491. 
  4. Shah MN, Wasserman EB, Gillespie SM, et al. High-Intensity Telemedicine Decreases Emergency Department Use for Ambulatory Care Sensitive Conditions by Older Adult Senior Living Community Residents. J Am Med Dir Assoc. 2015;16(12):1077-1081. 
  5. Mackinney AC, Ward MM, Ullrich F, Ayyagari P, Bell AL, Mueller KJ. The Business Case for Tele-emergency. Telemedicine and E-Health. 2015;21(12):1005-1011. 
  6. Sun S, Lu SF, Rui H. Does Telemedicine Reduce Emergency Room Congestion? Evidence from New York State. SSRN Electronic Journal. 2019;
  7. Duchesne JC, Kyle A, Simmons J, et al. Impact of Telemedicine Upon Rural Trauma Care. J Trauma. 2008;64(1):92-98. 
  8. Hollander JE, Carr BG. Virtually Perfect? Telemedicine for Covid-19. N Engl J Med. 2020;382(18):1679-1681.
  9. Perrin PB, Pierce BS, Elliott TR. COVID ‐19 and telemedicine: A revolution in healthcare delivery is at hand. Health Sci Rep. 2020;3(2). 
  10. Portnoy J, Waller M, Elliott T. Telemedicine in the Era of COVID-19. J Allerg Clin Immunol. 2020;8(5):1489-1491. 

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