Study finds telemedicine visits cost far less than office visits

Telemedicine visits are five times less costly than in-person appointments for the most common conditions able to be treated by both forms of visits, new research from the Perelman School of Medicine at the University of Pennsylvania shows. On average, telemedicine patient visits were billed $400 less, and they also resulted in fewer follow-up visits after the initial appointment. The analysis was published in JAMA Network Open.

“Before we did this study, there was a common concern that telemedicine might serve only as an easy source of ‘first aid,’ just delaying in-person care and increasing costs overall,” said co-senior author David Asch, MD, MBA, the John Morgan Professor and senior vice president for Strategic Initiatives at the University of Pennsylvania. “But we found that wasn’t true, and our work suggests that for many patients, telemedicine can be a complete solution, not just a temporary band-aid.”

Telemedicine’s enduring popularity leads to cost savings

During the COVID-19 pandemic in 2020, telemedicine usage exploded as hospitals and health systems were able to take advantage of updated regulations that expanded access. Across the University of Pennsylvania Health System (UPHS), for instance, there were 11,000 telemedicine visits across the entire health system in 2019. But from March 2020 through February 2021, a million telemedicine visits were conducted, a 90-fold increase.

Today, telemedicine remains an important part of the health care landscape. In fact, the same Penn Medicine researchers found in another new study—published in the Journal of General Internal Medicine—that four to six percent of all health care visits from 2022 through 2024 were conducted via telemedicine at the same five UPHS hospitals they studied to determine visit costs. UPHS continues to expand telemedicine offerings, including a recent switch centralizing many of the calls to after-hours primary care clinics to a centralized telemedicine service, Penn Medicine OnDemand.

With telemedicine’s ability to expand access both during crises like the COVID-19 pandemic and in more regular operations, and its potential to streamline operations and confer less of the brick-and-mortar costs required for regular in-person visits, the study team sought to explore both telemedicine visits’ cost-efficiency and effect on follow-up care.

“We know that telemedicine is not one-size-fits-all, particularly for mental and behavioral health, where thoughtful triage, follow-up, and continuity of care remain important, so we wanted to better understand whether we were truly seeing efficient diversion of care,” said senior author Yong Chen, PhD, a professor of Biostatistics.

Chen, Asch, and their colleagues looked at data billed to insurers for more than 160,000 visits—both in-person and telemedicine—across a four-month period in 2024. The study focused on 10 common billing codes, which included those for COVID-19, respiratory symptoms, neurodevelopmental disorders, sleep-wake disorders, and anxiety, among others.

Data was broken down into “episodes,” which tracked cases from seven days before an initial visit and 30 days afterward. That way, it could be tracked whether additional help and visits—and costs associated with that—were attached to each patient.

Overall, the average charge per episode associated with telemedicine being the initial visit was $96. When the first visit was in-person, it was $509.

When looking at follow-up visits, the average for those who started out with telemedicine was just over three, while in-person patients averaged over four.

Conditions factored into costs and types of visits

In mental and behavioral health care, episode charges were comparable across visit types, yet even in this setting, telemedicine was associated with fewer subsequent visits.

“Many systems already deliver most psychiatric care via telemedicine since care is dominated mostly by counseling and medication management instead of through tests or procedures, like care for other conditions,” said first author Bingyu Zhang, MS, an Applied Mathematics & Computational Science PhD student in the Penn Computing, Inference and Learning (PennCIL) lab. “So, treatment and prescribing workflows may look similar across visit types and make episode charges comparable, even though telemedicine is still associated with fewer subsequent visits.”

However, when it came to respiratory symptoms, for example, telemedicine appointments were cheaper by roughly $800, on average.

While some of the in-person cases were certainly more serious and couldn’t be handled via telemedicine, the researchers did their best to adjust their analysis to match and compare like-for-like patients across visiting types. This meant the gap in costs likely remained more tied to visiting type than the patients seen.

A universal finding?

The researchers believe their findings are informative beyond the five hospitals they studied in Philadelphia because they show what is possible when access to telemedicine is expanded, its infrastructure receives investment and attention, making it a core part of workflows.

Regulatory changes around telemedicine that came about during the COVID era are still not permanent, however, and are set to potentially lapse again at the end of 2027 without yet another temporary extension by Congress.

“If telemedicine is allowed to revert to the more limited model that existed before COVID, the cost savings we identified could disappear,” said UPHS CEO and study co-author Kevin B. Mahoney. “At a moment when hospitals and health systems face serious financial headwinds, those savings are vital. They enable us to reinvest in patient care and fuel innovation.”