Some Employers Pay Too Much for Telemedicine

July 20, 2015

Patrick Spain

Many companies that have purchased telehealth services for their employees are paying more than $500 for every call employers make to the service!

How is this possible?

Simple: Employees don’t use the service enough to offset the PEPM costs. Some telemedicine vendors also charge a per consult fee that adds to the cost. 

For example, if a company with 500 employees pays $3.00 PEPM ($18,000 per year) for a telehealth service and gets a utilization rate of 5% (that is, 4% of covered employees make one call to the service per year), each of those 25 calls costs $720 ($18,000/25).

Unfortunately for employers, that 5% utilization rate is not unusual in the telehealth industry. Many companies who use telehealth services other than First Stop Health have told me that their utilization rates are in the single digits.

At First Stop Health, our target utilization rate is at least 40%. Most of our customers experience rates above 50%, even during the very first year that the service is available to their employees.

The result? First Stop Health clients pay an actual cost per telehealth call that’s much lower than the clients of our competitors pay. Not only that, the average price per call is less than the cost of a visit to a doctor’s office.

What makes us so different? Unlike our competitors, we actively encourage employees of our clients to use our service by delivering a 12-month employee engagement plan. We do whatever is needed to ensure our clients see a positive ROI from our service.

The bottom line: If you’re thinking about offering a telehealth service to your employees, make sure you understand the real costs of low utilization. And if you already have a service other than First Stop Health, figure out how much you’re really paying per telehealth consultation. After you see the number, give First Stop Health a call, because we offer a contractual guarantee that we will save you more than you pay us. We are the only telehealth provider to make that promise.

Originally published Jul 20, 2015 3:21:00 AM.