The Telemedicine Cost Opportunity
Telemedicine reduces plan cost by diverting ER and urgent care visits to lower-cost virtual care. The cost differential is significant: the average ER visit costs $1,500–$2,500; the average urgent care visit costs $150–$300; the average telemedicine visit costs $40–$75. For every ER visit diverted to telemedicine, the plan saves $1,400–$2,400.
| Care Setting | Average Cost | Appropriate For |
|---|---|---|
| Emergency room | $1,500–$2,500 | True emergencies; life-threatening conditions |
| Urgent care | $150–$300 | Non-emergency conditions requiring in-person exam |
| Telemedicine | $40–$75 | Primary care conditions; mental health; follow-up visits |
| Primary care office | $150–$250 | Preventive care; chronic disease management; complex conditions |
Conditions Appropriate for Telemedicine
- Upper respiratory infections (cold, flu, sinus infections)
- Urinary tract infections
- Skin conditions (rashes, acne, minor wounds)
- Mental health (therapy, medication management)
- Chronic disease management (diabetes, hypertension follow-up)
- Minor injuries (sprains, cuts)
- Prescription refills
- COVID-19 and other infectious disease screening
Utilization and Cost-Sharing
IQ Insight
Telemedicine utilization is highly sensitive to cost-sharing. Plans with $0 telemedicine copays see 3–5x higher utilization than plans with $25–$50 copays. The incremental cost of the additional utilization is far less than the ER and urgent care visits that are diverted. $0 telemedicine is almost always the right design choice.