Increased Skilled Nursing Facility Spending Tied to Health Systems’ Higher Telemedicine Use 

Hospital systems that had high telemedicine usage during the Covid-19 pandemic also had higher skilled nursing facility spending, compared to health systems with lower telemedicine usage in that time period.

That’s according to research findings published April 17 in Health Affairs. Specifically, compared with health systems defined as having low telemedicine use, high-telemedicine health systems had an inflation-adjusted $75 differential increase in skilled nursing facility spending per person, which equated to a relative increase of 9.5%.

The researchers also found that inpatient hospital admissions were higher among the high-telemedicine health systems, and this is the simplest explanation for why SNF spending also was higher at these systems, researcher Ateev Mehrotra, M.D., told Skilled Nursing News. Mehrotra is a professor of health care policy at Harvard Medical School and associate professor of medicine and a hospitalist at Beth Israel Deaconess Medical Center.


“The question then comes up, why would telemedicine use lead to higher hospitalizations? That’s less clear,” Mehrotra told SNN.

One hypothesis, he said, is that more telemedicine visits create more opportunities for clinicians to notice symptoms that precipitate a hospitalization. But he noted that the researchers “don’t have all the answers.”

He is confident that more telemedicine use did lead to more spending overall at high-use health systems, of about $248 per person on an inflation-adjusted basis. However, given the relatively small dollar amounts involved, he is less confident about the precise effect on spending that skilled nursing usage and other types of services – such as home health – brought to bear.


“Given concerns that telemedicine’s convenience will lead to more visits, the relatively small increase in visits that we observed was somewhat surprising,” the researchers wrote in their Health Affairs paper.

They put forward several ideas about why visits did not spike more, including limited clinician capacity. And they also noted that policymakers have indicated that small increases in spending related to telemedicine might be acceptable, as reflected by moves to maintain the expanded access to telemedicine put in place during the pandemic.

“Given the small improvements in access and quality (in particular for chronic disease medications), combined with modest increases in spending along with patients’ and clinicians’ preferences, we believe that it will be difficult to justify a return to restricting telemedicine payment in Medicare,” the researchers wrote.

Some health systems around the country are continuing to expand their telemedicine strategies, with Sioux Falls, South Dakota-based Sanford Health being a prime case in point. One of the largest skilled nursing providers in the country – The Evangelical Lutheran Good Samaritan Society – is part of Sanford, and is planning to leverage the ambitious virtual care center that the health system is creating as part of a $350 million Virtual Care Initiative.

South Dakota Gov. Kristi Noem recently signed two measures that will together make $7 million in grants available to increase telemedicine use in the state, including telemedicine use within long-term care settings specifically.

Telemedicine has proven particularly critical in rural states such as South Dakota, where access to health care is often contingent on people traveling long distances.

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