Telemedicine Use Has Not Led to Increased Visits or Higher Costs, Study Finds

Why It Matters

The findings reassure payers that telehealth is largely a cost‑neutral substitute for in‑person care, while underscoring that it has not yet delivered the hoped‑for expansion of access, a key factor as legislators debate permanent payment‑parity policies.

Key Takeaways

• Telemedicine visits dropped 2.4% from 2019 to 2023.
• Overall medical spending fell 0.5% despite higher telehealth use.
• Rural areas showed 3.8% higher spending, not statistically significant.
• No significant cost changes for Medicaid, Medicare Advantage, or vulnerable groups.
• Study ends 2023; long‑term outcomes still uncertain.

Pulse Analysis

The COVID‑19 pandemic prompted a rapid policy shift that lifted geographic restrictions, eliminated co‑pays and instituted payment parity for virtual visits. Those changes spurred a dramatic rise in telemedicine adoption, prompting analysts to warn of potential cost inflation and widening disparities. Early forecasts suggested that easier access could both increase utilization and improve equity, but the evidence remained mixed. As lawmakers now weigh whether to codify these temporary measures, a clear, data‑driven picture of telehealth’s fiscal impact is essential for informed decision‑making.

UCLA’s recent study, appearing in JAMA Network Open, provides that picture by tracking utilization and spending across all major payer categories through the end of 2023. The researchers observed a modest 2.4% decline in telemedicine visits and a 0.5% dip in overall medical expenditures, indicating that virtual care has acted more as a substitute than an add‑on to traditional services. Even where spending rose—rural areas, commercially insured and fee‑for‑service Medicare patients—the changes were not statistically significant, suggesting that fears of runaway costs are largely unfounded. Moreover, the analysis found no meaningful cost reductions for Medicaid, Medicare Advantage or socially vulnerable groups, tempering expectations that telehealth would close long‑standing access gaps.

Looking ahead, the study’s authors stress that the data capture only the early equilibrium of telemedicine use. As reimbursement rules evolve and providers refine virtual care models, the long‑term effects on quality, outcomes and total cost of care remain uncertain. Policymakers will need ongoing monitoring to determine whether permanent payment parity encourages efficient care substitution or eventually drives utilization growth. Continued research will also be critical to assess whether telehealth can be leveraged to reduce disparities without inflating overall spending, a balance that will shape the future of American health‑care delivery.