Telehealth in Acute Care : Pay Parity and Patient Access
Problem definition: In response to the increased use of telehealth to replace traditional office visits with a physician, several US states have recently adopted telehealth pay parity policies. Such policies state that payers must reimburse healthcare providers for telehealth services at the same rate that would apply if those services had been provided in a traditional office setting. But health policy researchers have pointed out that telehealth may not be as efficient as a traditional office visit for acute care. Specifically, telehealth is associated with increased duplicate visits, compared to a traditional office visit. We examine whether telehealth pay parity policies may in fact be counterproductive at improving access to acute care, and under what conditions.Methodology/results We use a three-stage game theoretic model to assess the impact of telehealth reimbursement policy on patient access to acute care. In the first stage, the payer sets a reimbursement policy for telehealth visits. In the second stage, a healthcare provider commits a certain portion of its capacity to telehealth, and in the third stage, patients arrive and choose between telehealth and office visits according to an equilibrium queueing network. We find structural results for the equilibria under both homogeneous and heterogeneous illness types, and we fully characterize the equilibria in closed-form for homogeneous patients. When the chance of a duplicate visit is moderate (neither too high nor too low), pay parity incentivizes providers to allocate too much capacity to telehealth, resulting in lower overall patient access than could be otherwise achieved. We characterize a reimbursement level that avoids this misalignment and maximizes patient access, which we show is less than parity. On the other hand, we show that when the provider can influence duplicate visits, telehealth pay parity does not incentivize them to increase the duplicate visit rate.Managerial implications: The literature shows that patients receiving acute care via telehealth may be more likely to require a duplicate, in-person visit to resolve their health concern. In the fee-for-service environment that is common in the US for acute care, duplicate visits resulting from telehealth lead to an incentive alignment problem because they generate excess demand and provider revenue, without any corresponding increase in patient access. Legislating pay parity for telehealth can lead to providers committing more capacity to telehealth. However, there is good news in that all parties (payers, providers, and patients) would be better off if duplicate visits could be decreased. Policy makers should understand these implications before enacting policies that affect reimbursements for telehealth
Year of publication: |
[2022]
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Authors: | Cakici, Ozden ; Mills, Alex |
Publisher: |
[S.l.] : SSRN |
Saved in:
freely available
Extent: | 1 Online-Ressource (32 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments February 28, 2022 erstellt |
Other identifiers: | 10.2139/ssrn.4045617 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10013293294
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