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Why telehealth does not always save money for the health system

Centaine L. Snoswell (Centre for Online Health, The University of Queensland, Brisbane, Australia) (Centre for Health Services Research, The University of Queensland, Brisbane, Australia)
Monica L. Taylor (Centre for Online Health, The University of Queensland, Brisbane, Australia) (Centre for Health Services Research, The University of Queensland, Brisbane, Australia)
Liam J. Caffery (Centre for Online Health, The University of Queensland, Brisbane, Australia) (Centre for Health Services Research, The University of Queensland, Brisbane, Australia)

Journal of Health Organization and Management

ISSN: 1477-7266

Article publication date: 15 July 2021

Issue publication date: 8 October 2021

336

Abstract

Purpose

This study aims to determine elements of telehealth that have the potential to increase costs for the health system in the short to medium term.

Design/methodology/approach

A search of PubMed, EMBASE and Scopus databases was performed in May 2018 using broad terms for telehealth and economics. Articles were included if they identified and explained reasons for an increase in cost for telehealth services. Studies were categorised by economic analysis type for data extraction and descriptive synthesis.

Findings

Fourteen studies met inclusion criteria and were included in the review. These studies identified that increased health system costs were due to implementation costs (e.g. for equipment, software or staff training), increased use of other healthcare services (e.g. pharmaceutical services) and ongoing service costs (including staff salaries) resulting from telehealth being additive to traditional service (e.g. increased frequency of contact).

Originality/value

Telehealth is often assumed to be a cost-effective method of delivering healthcare, even to the point where direct cost savings are expected by decision makers as a result of implementation. However, this investigation suggests it does not routinely reduce costs for the health system and can actually increase costs at both implementation and ongoing service delivery stages. Health services considering implementing telehealth should be motivated by benefits other than cost reduction such as improved accessibility, greater patient centricity and societal cost–benefit.

Keywords

Acknowledgements

This research is conducted for the NHMRC Partnership Centre for Health System Sustainability (Grant ID #: 9100002) administered by the Australian Institute of Health Innovation, Macquarie University. Along with the NHMRC, the funding partners in this research collaboration are: The Bupa Health Foundation; NSW Ministry of Health; Department of Health, WA; and The University of Notre Dame Australia. Their generous support is gratefully acknowledged.

While the NHMRC, The Bupa Health Foundation, NSW Ministry of Health, Department of Health, WA, and The University of Notre Dame Australia have provided in-kind and financial support for this research, they have not reviewed the content and are not responsible for any injury, loss or damage, however, arising from the use of, or reliance on, the information provided herein. The published material is solely the responsibility of the authors and does not reflect the views of the NHMRC or its funding partners.

Conflict of interests: The authors declare no conflicts of interest.

Citation

Snoswell, C.L., Taylor, M.L. and Caffery, L.J. (2021), "Why telehealth does not always save money for the health system", Journal of Health Organization and Management, Vol. 35 No. 6, pp. 763-775. https://doi.org/10.1108/JHOM-04-2020-0159

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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