Economics of a Health System’s Direct-to-Consumer Telemedicine for Its Employees

Employers in the United States have increasingly been offering a direct-to-consumer (DTC) telemedicine benefit for low-acuity or minor illnesses to their employees.1-3 By 2021, more than 95% of employers with 50 or more employees provided some coverage for DTC telemedicine in their largest health plan; more than 75% felt that offering telemedicine was important and nearly 20% either limited or eliminated cost sharing for telemedicine. This study has 2 main findings. First, a telemedicine alternative to in-person care delivered within a medical center free to its employees produced lower immediate per-episode unit cost for care. This favorable per-episode cost might be undermined if OnDemand’s convenience induced care overuse for symptoms that otherwise would have been ignored by employees. A second finding is that encounter rates increased marginally after the introduction of OnDemand among a set of conditions for which inducement of overuse would have been most likely.