Utilization: The Magic Number in Telemedicine

September 19, 2019

Will Rumsey

Human Resources professionals face the difficult problem of keeping healthcare costs low while satisfying current employees and wooing potential hires. 

Their benefits consultants are also judged by the impact their services have on both employers’ healthcare costs and employees. 

Telemedicine is a great tool for ensuring employee health and happiness. But telemedicine should also save a company money. When it accomplishes both goals, telemedicine is a win-win for employees, employers and benefits consultants. 

The question is: How can employers and consultants measure telemedicine success? There’s one magic number. 

The Magic Number in Telemedicine 

Utilization rate is the magic number in telemedicine. 

Telemedicine utilization is equal to the number of consults divided by the number of covered employees. If a company has 1,000 employees and those employees collectively make 500 consults, then the company’s utilization rate is 50%. 

By 2020, 91% of employers will offer telemedicine, according to a 2019 First Stop Health survey. But according to Willis Towers Watson’s 2018 Healthcare Changes Ahead survey, only 2% of Americans have actually had a telemedicine consult.  

As a result, industry averages for utilization are typically 1-10%. 

Why Utilization Rate is Vital

If employees don’t use the service, nobody wins: Not employers, not employees. Without engagement, all the savings and perks go untapped.

When employees use telemedicine, they avoid more expensive care such as the emergency room, urgent care or a primary care provider. As a result, employees save on expensive copayments and out-of-pocket costs, and employers save on expensive healthcare claims. Plus, employees see soft benefits, such as saving time and eliminating frustration by avoiding waiting rooms.  

Every employer should know their telemedicine provider’s magic number, yet many don’t. Among those who do, many are seeing a disappointingly low one. During a recent First Stop Health webinar, half of employers and brokers polled reported telemedicine utilization of less than 5%, and 30% said they did not know their utilization rate. That’s because many telemedicine providers either don’t offer reporting, or else performance metrics are buried in their reports. Just 20% of brokers and employers said they had utilization as high as 5-15%. No one reported utilization above 15%. 

Employee utilization rate is undoubtedly the most important factor affecting cost savings for employers — but it doesn’t end there. High utilization rates indicate an engaged employee base that feels cared for, promoting higher satisfaction levels and company morale. Employers can also expect to attract and retain more top talent and see higher levels of productivity when telemedicine utilization rates are higher.

Many facts and figures swirl around HR departments, but it is vital that employers are made aware of the key numbers that drive results. Employee utilization rate is number one in telemedicine: It drives ROI and best represents the value the service is delivering. For employers to see what value their telemedicine benefits are providing, the utilization rate should be front and center in any and all reports from the provider.

Download the Guide to Telemedicine

Originally published Sep 19, 2019 2:00:00 PM.