More employers are paying for telemedicine, but enrollee take-up has been relatively low

Telemedicine – the delivery of health services by providers at remote locations, such as through video conferencing or remote monitoring – has been seen as a way to possibly improve access to care while also lowering costs.  In our 2018 Employer Health Benefit Survey (EHBS), we find that the share of large employers offering health plans that cover telemedicine has increased significantly from 2015 – 2018.  In this corresponding brief, we use employer claims data to measure the uptake of these services by employees and their family members.

In the EHBS survey, we see that among large employers offering health benefits, the share of firms whose plan with the largest enrollment covers telemedicine has increased steadily each year from 27% in 2015 to 74% in 2018. (Note that this definition of telemedicine does not include emails or information posted online).

More employer plans are covering telemedicine than had in recent years

More employers are paying for telemedicine, but in 2016, fewer than 1% of enrollees had a telemedicine visit Share on X

The largest employers – those with 5,000 or more workers — are most likely to cover telemedicine (83%), while smaller firms – those with 50 – 199 workers – are least likely (65%). Across all firms with at least 50 workers, 67% say their largest plan covers telemedicine.  Some employers not only cover telemedicine, but also provide a financial incentive for enrollees to use telemedicine instead of visiting a brick and mortar facility.  Over a quarter (26%) of firms offering health benefits with 50 or more workers have such an incentive in 2018 compared to 14% in 2016.

To see whether employees are increasing their use of telemedicine, we analyzed a sample of health benefit claims from the Truven MarketScan Commercial Claims and Encounters Database to calculate the number of outpatient telemedicine appointments among people with large employer coverage. The Truven MarketScan claims database currently includes data through 2016, so this analysis is limited in that we cannot measure uptake of telemedicine in 2017 or 2018. We also limit this analysis to outpatient physician services, not hospital or skilled nursing care. Physician office visits conducted over the telephone or online are only captured as a telemedicine appointment if the physician’s office documents this in the billing code.

The number of telemedicine visits increased significantly from 2010 to 2016, among people with large employer coverage

In total among people with large employer coverage, we find that there were nearly 429,000 outpatient days that included a telemedicine visit in 2016. While this represents an increase of 46% from the 293,000 outpatient days with telemedicine visits the year prior, telemedicine still represents less than 1% of total outpatient visits and does not appear to be significantly replacing traditional in-person physician visits. Among people with at least 6 months of large employer coverage and at least one outpatient claim in 2016, just 0.51% of enrollees had a telemedicine outpatient visit, up from 0.35% of enrollees in 2015.

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The share of enrollees in large employer coverage who use telemedicine has remained small

Telemedicine has the potential to improve access to care, particularly in rural areas where people may have to travel long distances to see a physician. However, we find the take-up rate of telemedicine is similarly low among both urban and rural enrollees in large employer coverage. In 2016, 0.41% of rural enrollees with at least 6 months of coverage and at least one outpatient claim used telemedicine, compared to 0.52% of urban enrollees (up from 0.23% and 0.36%, respectively, the year prior).

The take-up rate of telemedicine is similarly low among urban and rural enrollees in large employer health plans

Because the most recent Truven MarketScan data only extend through 2016, it is yet to be seen whether use of telemedicine has substantially increased over the past year or two as more employers have started covering these services. Some studies have suggested that telemedicine can improve access to care, but its ability to cut cost has been called into question.  While the cost of delivering care through telemedicine is often less expensive than providing care in person, some studies have suggested that the ease of telemedicine will increase the overall use of healthcare services.   This finding may mirror some public payers, where payers have made an effort to expand coverage but usage remains relatively low. For telemedicine to be able to move the needle on access to care or overall health spending, more enrollees will need to take up these services.


We analyzed a sample of medical claims obtained from the Truven Health Analytics MarketScan Commercial Claims and Encounters Database, which is a database with claims information provided by large employers.  We analyzed a subset of claims from the 2016 that includes claims for almost 20 million people representing about 23% of the 85 million people in the large group market. We only include claims for people under age 65.  Weights were applied to match counts in the Current Population Survey for large group enrollees by sex, age, state and whether the enrollee was a policyholder or dependent.

Outpatient claims were aggregated by the day, so the units of analysis were days of outpatient services (‘outpatient service days’).  The outpatient services file has a variable (‘procgrp’) that groups outpatient services into groups based on CPT4, ICD-9-CM or HCPCS procedure codes.  We included services classified as “Physician telephone/online visits” as telemedicine visits; these include CPT codes 99441 through 99443 and 99446 through 99449.


The Peterson Center on Healthcare and KFF are partnering to monitor how well the U.S. healthcare system is performing in terms of quality and cost.

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