- Telehealth use dropped for the second month in a row in March, though the rate of decline slowed a bit, according to new data tracked by nonprofit Fair Health.
- Telehealth claim lines as a percentage of all medical claims among the commercially insured population fell 5.1% nationally from February to March, following a sharper drop of 15.7% from January to February as vaccination efforts ramped up and COVID-19 cases declined as a result.
- The drop was seen in all four U.S. census regions with the greatest decline in the Midwest, which saw an 8.9% decrease, Fair Health said.
Demand for virtual care skyrocketed last year during the pandemic as patients sought medical care in the relative safety of their homes. But the big question is how much demand will remain once consumers regain trust in in-office services — and the industry is still waiting to see how federal regulations shake out after the national emergency, and its related virtual care flexibilities, expires.
Fair Health has used its database of over 33 billion private claims records to analyze the monthly evolution of telehealth since May last year. Its data from early 2021 suggests the dampening in demand for virtual care correlates with a larger decline in COVID-19 cases, which have mostly dropped off this year as the U.S. hustled to get more people vaccinated.
Telehealth use peaked in April last year before trending down through September and re-accelerating starting in October, as COVID-19 cases resurged in the winter months. Telehealth claims made up 7% of all medical claim lines in January, before dropping to 5.9% in February and 5.6% in March, suggesting a steady deceleration in demand for virtual care this year.
Historically high levels of telehealth utilization last year led to an unprecedented influx of cash into the sector and a rash of M&A among virtual care players looking to snap up market share. Despite data like Fair Health's showing a dampening of utilization, investor interest in digital health has continued, with digital health funding hitting a record $9 billion in the first quarter this year. Alone, telehealth companies raised a record $4.2 billion, according to CB Insights.
But the sustainability of that boom relies in part on continued consumer demand in 2021 and beyond, which seems to be abating as COVID-19 tailwinds ease.
Washington is currently deliberating how much of the heightened COVID-19 flexibility around telehealth coverage should remain after the national emergency ends, though telehealth generally enjoys bipartisan support and the new CMS administrator, Chiquita Brooks-LaSure, has said she backs permanently adopting virtual care coverage waivers.
In another shift from February to March, psychotherapeutic and psychiatric codes replaced evaluation and management codes in the list of top five telehealth procedures. For example, 60-minute psychotherapy rose from the No. 3 to the No. 1 position on the list in the South, supplanting two E/M codes for outpatient visits, Fair Health found.
The trend is consistent with an ongoing rise in the percentage of telehealth claims addressing mental health conditions, which remains the number one telehealth diagnosis nationwide and made up more than half of all virtual claim lines in March.
Mental health conditions have led the list since January, as conditions like depression and anxiety have been exacerbated by the pandemic, sending virtual behavioral health visits surging in 2020.
From February to March, hypertension, along with joint and soft tissue diseases, dipped in the rankings of telehealth diagnoses nationally, while developmental disorders stayed steady or rose in the rankings. Researchers chalked the trend up to hypertension and joint and soft tissue diseases affecting mostly adults, who have migrated back into physical spaces after being vaccinated, while developmental disorders are mostly seen in children, many of which are not yet eligible for vaccination and may be using more telehealth to screen conditions at the home.
That could change soon: Pfizer's coronavirus vaccine has been authorized for use in children as young as 12 in the U.S., Europe and Canada, and the pharmaceutical giant said Tuesday it will begin testing its vaccine in a larger group of children under 12.