Congress must make telehealth authority permanent to contain healthcare costs
Dr. Gallagher is a cardiologist and founder and chief strategy officer at Access TeleCare
The temporary federal funding package enacted in November that ended the federal government shutdown also re-started federal authority for telehealth services. That’s the good news.
The not-so-good news is that, without Congressional action, this authority ends, yet again, on Jan. 30, 2026.
Congress can stop the perpetual cycle of renewal and expiration by making permanent federal telehealth policy. This is not just about consumer convenience. It’s central to avoid adding even more costs to an already burdened healthcare system.
Medicaid programs are consuming an ever-growing share of state budgets. The federal Medicare trust fund for inpatient hospital care (Medicare Part A) is facing insolvency. Private insurers are increasing premiums by double digits. And, an overwhelming majority of Americans are worried they won’t be able to afford needed healthcare.
Now is the time to double down on virtual healthcare.
Also known as telehealth or telemedicine, virtual care breaks down geographic, transportation, and other logistical barriers to accessing timely medical care, particularly for seniors and those in rural communities.
When patients can access the medical care they need in a timely and convenient manner, they stay on prescribed medications, comply with treatment plans, avoid worsening of chronic conditions, and stay out of emergency departments. These add up to better clinical outcomes for individual patients and to overall cost savings for the healthcare system. Economic modeling for six states, for example, found telehealth care provided between February and September 2020 was associated with a reduction in overall costs ranging from $445,000 to $33 million for Medicare and $155,000 to $181 million for Medicaid.
When done correctly, virtual care replaces … not duplicates … in-person care, improving timeliness of care and delivering cost savings. New analysis from the American Telemedicine Association’s Center of Digital Excellence of Medicare data in 25 states found that a 31-fold increase in virtual care visits increased Medicare utilization by just 0.25 visits per beneficiary.
Within hospitals, telemedicine programs are yielding significant efficiency improvements and cost savings in a variety of ways. By making specialists such as cardiologists or neurologists available virtually, hospitals are reducing the duration of patients’ hospital stays, wait times in emergency departments, and hospital readmissions.
They are also reducing interhospital patient transfers, a major cost driver. Patients typically are transferred between hospitals when the originating hospital lacks the specialists or other clinical resources to care for a patient’s condition. Some transfers involving patients needing high-level trauma or burn care, for example, are unavoidable. Others, however, are avoidable. A patient with stroke symptoms, for example, is likely to show up at their local community hospital’s emergency department. Without an on-site neurologist, that hospital must transfer the patient to a second hospital that has the necessary clinical capacity to diagnose and treat a stroke. On-site neurological capacity at the original hospital would avoid the need for transfer.
This example applies to a litany of other specialty-related care that is a significant driver of transfers. Each year, U.S. hospitals transfer more than 5.1 million patients to another hospital, most frequently for patients with brain, heart, and lung conditions, because the original hospital does not have the requisite specialist available.
The cost of each transfer is about $5,100. For patients with health insurance, at least a portion of that cost is borne by their health plan, Medicare, or Medicaid. For patients without health insurance, that cost is the responsibility of the patient, or it becomes an unfunded charity care expense for the hospital.
Reducing these more than 5.1 million transfers by having specialty care available at the original hospital via telemedicine could save the healthcare system billions of dollars annually. Avoiding just half of these transfers would save more than $13 billion.
Transfers are already being avoided safely and effectively with hospital-based virtual care, and more transfers can be avoided with even greater adoption. One of the teleNeurology programs we deployed at a six-hospital regional health system resulted in a 60 percent reduction in transfers of neurology patients. Another partner, a rural hospital, saw a 36 percent decrease in patient transfers from its emergency department when it deployed a telePulmonology and Critical Care program. Still another decreased its outbound transfers by 15 percent when it deployed a virtual ICU with telePulmonology and Critical Care.
Having specialists available virtually avoids the need for transfers.
Telehealth has proven its value. It’s a clinically effective means for payers, hospitals, and clinicians to be prudent with healthcare dollars, whether those belong to the taxpayer, employers, or individual health insurance policyholders.
Congress needs to make the current telehealth flexibilities permanent and create a solid foundation for the U.S. healthcare system to continue to expand on tech-enabled clinical services. There is no question that the future of care delivery in the U.S. must include virtual care, and the longer we wait, the more money we waste, and the more patients’ health outcomes will suffer.
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