Telemedicine’s Rise Casts Spotlight on Pay Structure Opacity in Healthcare Organizations

In the wake of the global COVID-19 pandemic, the landscape of healthcare has seen tremendous changes. Telemedicine, once a convenience, has now become a permanent feature in many healthcare services. Patients and providers alike have seemingly embraced the technology for its accessibility and efficiency. However, as telemedicine platforms proliferate, questions about their effectiveness, the impact on physicians and the transparency of pay structures offered by some healthcare organizations have sparked debate.

The convenience of telemedicine is indisputable. A national study including 36 million working-age individuals with private insurance claims data showed that telemedicine encounters increased by 766% in the first three months of the pandemic. The appeal is clear: no travel time, no waiting rooms, and the comfort and safety of receiving care at home. But is this convenience worth the price tag, and who is paying for these services?

From the perspective of healthcare access, telemedicine is a game-changer, especially for rural and underserved communities. However, beneath the surface of this modern healthcare revolution lies an opaque layer concerning pay structure. Healthcare organizations have been criticized for a lack of transparency regarding how they compensate providers for telemedicine services and how these costs are then transferred to patients.

Insurers have been inconsistent in their coverage of telemedicine services. During the height of the pandemic, many insurers temporarily offered parity in reimbursement for virtual and in-person visits. However, as the world transitions to a new normal, some insurers have rolled back these policies, leading to higher out-of-pocket expenses for patients.

The discrepancies in pay structures are not only a concern for patients but also providers. 75% of patients are still not using telehealth due to access barriers, and most patients aren’t aware of the telehealth options available to them or can’t utilize the technology to have an e-consult. The lack of a standardized pay model and awareness is impacting people’s ability to receive and access telehealth care.

Other barriers include the impact on the physician’s workload. Already inundated with work, and hours of paperwork; physicians are now facing a surge of messages from patients. This is taking a toll on providers. However, this also allows physicians to get in touch with patients who typically cannot access the regular care they need, especially in rural areas where one has to travel a great distance to receive medical care.

“Telemedicine, including virtual healthcare, has a real impact on the retention of both physicians and nurses. This is especially true in rural areas where telemedicine makes it easier to connect a patient with the right specialist who oftentimes is located in an urban area,” explains DoorSpace CEO, Sarah M. Worthy. “Telemedicine allows physicians to offer better and faster care to patients. Patients who otherwise wouldn’t receive care due to challenges with getting to the office for an appointment are able to access telemedicine services from their home. Additionally, studies show patients are far less likely to cancel a telemedicine appointment than an office visit.”

Can telemedicine technology ease the workload and make the profession more appealing to current and future physicians?

“I wouldn’t say telemedicine eases the workload for physicians. Offering telemedicine services in addition to in-patient services increases their administrative burdens due to regulatory and insurance requirements. There are studies that show telemedicine services increase the number of hours physicians work outside of their normal hours on nights and weekends. We shouldn’t ignore these studies – although there are clear benefits to telemedicine for the patients, we need to be designing the delivery side of telemedicine with physician’s employee experience at the center,” shares Worthy. “The reason why our clinicians are burning out and leaving healthcare in such large numbers is that we have continued to pile work onto their shoulders without any thought to how we can design a healthcare system that works for both patients and their doctors.” 

The promise of telemedicine lies in balancing increased healthcare access with the needs of providers and clear financial practices. To ensure its sustainability, the healthcare sector and policymakers must streamline payment models, educate patients on telehealth, and address provider workloads. Effective telemedicine requires transparency and a unified approach to meet the needs of all involved in the healthcare system.