How to Evaluate Telemedicine ROI for Your Practice: Important Metrics

May 21st, 2020 /
Chris Ferguson
/ 5 Min Read
Telemedicine ROI for Your Medical Practice


Telemedicine is becoming more widely available and it will soon be an expectation, rather than a novelty. A situation like the current COVID-19 pandemic brought this option into the spotlight, but telehealth and video visits were already increasing in use prior to this event. One question that physicians and practices have struggled with is determining telehealth ROI.

Knowing what the cost and savings are in any offered service is an essential part of your revenue cycle management. The research here can seem elusive because some of your ROI will be dependent on your individual practice. To add to the confusion, research on the topic offers a variety of findings. If you’ve never offered telehealth before, telemedicine revenues are an unknown variable that needs to be projected and planned for.

You also are concerned about patient cost savings, because there have been questions about whether telemedicine is covered by providers. Much of the information available in recent years have shown cost savings and improved well care for patients, especially those with chronic conditions. In fact, a recent article from Health Leaders stated that using telehealth visits rather than sending patients to the emergency room could save as much as $1,500.00.

ROI from Telemedicine service
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More recent articles have been more prominently in favor of adding telehealth to service offers when appropriate. But the data on cost savings is fluid due to the variables. You’re not looking for guesses. You’re looking for hard, fact-based data to show exactly what you’re investing in and how it will improve patient care.

This analysis was done by one of our senior members. We find it important to include here because it helps give you a picture of the current data involved in telehealth ROI for real practices, just like yours.

Only 46% of healthcare organizations track their telehealth return on investment.

According to a recent survey by the Foley & Lardner law firm

What Are Your Metrics to Determine Telehealth ROI

Telehealth Consultation

You’ll find a great deal of general information on the subject of telemedicine ROI. Like every other area of your practice’s revenue cycle management, the reality depends on your patient base and uses. You can use some known metrics to help you project probable ROI, make decisions about your technology investment, and develop the best protocols to integrate telemedicine software into your practice efficiently.

Considerations in Hard Costs:

Hard costs for your practice include monthly costs associated with the facility. Set costs, like insurance and rental or mortgage on space, will not vary with the use of telemedicine, but other costs may:

  • Electric Usage: If you move to offer only telehealth visits for 1 of every 5 days and don’t use your practice location on those days, you can expect a 20% savings on electric usage over the course of the year.
  • Gas Usage: The same logic can be applied to gas and other utilities, offering yearly cost savings to your practice.
  • Medical Waste Expenses: Medical waste removal expenses experience a decrease, without decreasing the number of patients you can treat.

Considerations in Soft Costs:

Soft costs for your practice include staff hours and overhead costs, such as supplies.

  • Employee Salary. The exact ROI will depend on your internal practice decisions. Closing the office one or more days a week can decrease payroll expenses.
  • Increased Staff Productivity. Telehealth solutions can include scheduling, coding, billing, and reminders which frees your staff to attend to other practice needs.
  • Medical Equipment. Virtual visits decrease the use of medical equipment that’s necessary for every in-person visit, such as disposable masks, gloves, and one-time-use medical equipment. It also diminishes the need to clean and sterilize equipment as often. Multiply that over all of the patients opting for telehealth visits through the week or month.

Here are a few other variables that make a marked difference in your ROI:

  • An Increase of New Patients. Offering telehealth can increase your patient load because many people find the option to be convenient. This is especially true if your practice is in a rural area or you treat a lot of patients who need regular checkups for chronic conditions.
  • Higher Patient Satisfaction. This is one of those metrics which can be difficult to put a concrete number on. We know that high patient satisfaction improves the quality of care. It also often means great marketing and word of mouth referrals which can positively improve your revenue cycle.

One of the issues with telehealth cost in the past was the lack of conformity in reimbursement and payment from insurance providers. With COVID-19 and the Health Care at Home Act, telemedicine is routinely being covered by most insurance providers. As with all services, you should verify coverage ahead of time.

There is evidence of cost savings for practices and patients with the use of telehealth, and it improves the experience and outcomes. The best way to determine your practice’s ROI is by looking at the metrics that are particular to your patients and organization.

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