Unlike in Other Settings, Telehealth Could Spur Skilled Nursing Savings

The use of telehealth services is commonly floated as a way to improve care and reduce health care spending at skilled nursing facilities, particularly rural ones.

But there are several factors that drive the effect of telehealth on medical spending, and in practice, spending will drop only in specific situations, according to an opinion piece published Tuesday in the Annals of Internal Medicine.

Perhaps most crucially for skilled nursing operators, authors Adam Licurse and Ateev Mehrotra argue that telehealth’s value lies in preventing further downstream care, such as an emergency room visit or inpatient admission.


“For example, among older, sicker nursing home residents, after-hours telehealth coverage may generate substantial savings by deterring costly emergency department transfers and inpatient admissions,” they wrote.  “Targeting similar high-risk populations, in which a potential exists to deter high-cost events, would probably increase savings… Patients discharged to post-acute facilities from hospitals might benefit from virtual assessments by their hospital teams, who are more familiar with their care and therefore well-positioned to prevent readmissions.”

The authors also draw a distinction between “additive” and “substitutive” telehealth uses — essentially, whether or not the telehealth takes the place of a face-to-face meeting, or simply represents another health intervention.

Previous work by the authors found that in the use of telehealth for low-acuity conditions, about 90% of visits were considered new use, while 10% were substitution. The question for decreasing spending is ensuring that telehealth is primarily substitutive, Licurse and Mehrotra argued.


“First, services could be targeted to non-discretionary conditions, for which there is less potential for overuse,” they wrote. “Second, it is more likely to be substitutive if providers are paid via alternative and value-based payments (as is the case with Accountable Care Organizations). Under these models, providers have a financial incentive to prevent overuse and therefore are more likely to use telehealth to replace costlier in-person encounters.”

The authors also looked at the relative cost differences between telehealth and in-person visits, suggesting that lower reimbursement for telehealth visits could be appropriate. This is because such visits are often provided at a lower cost than those of in-person ones, even though some states have parity laws mandating telehealth be paid at the same rate as equivalent in-person visits.

Written by Maggie Flynn

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