Unbiased Analysis of Today's Healthcare Issues

Is the “Online Health Clinic” the Wave of the Future?

Written By: Jason Shafrin - May• 13•13

HealthPartners argues that the answer is yes. In a 2013 Health Affairs article, they argue the following:

HealthPartners in Minnesota launched an online clinic called virtuwell in late 2010. After more than 40,000 cases, we report an average $88 lower cost per episode compared with care received in traditional settings, strong indicators of clinical effectiveness, and a 98 percent “would recommend” rating from customers. The possibility of extrapolating such savings to larger volumes of cases is compelling.

Although I believe that there will be some savings from online health clinics, I believe that much of this perceived savings is due to patients sorting. If relatively healthier patients use the online health clinic, then it could be the case that average costs will be lower for those who use the online services simply due to patient sorting. The report does risk adjust for patient comorbidities and other factors.

Risk adjustment, however, is always imperfect. Thus, three confounding factors could bias these estiamtes.

  1. Individuals who are more educated, wealthier, more technologically savvy are more likely to use the online health clinic, but are also more likely to be relatively healthy conditional on observables.
  2. Individuals who use the online clinics may be more likely to seek treatment for less severe cases. If this is the case, then the treatment received during the online clinic may appear cheaper than is really the case since treating this same people in the clinic may have been cheaper than the average patient. Thus, there would still be cost savingings but the magnitude would not be as large.
  3. Whereas the points above mention that there could be differences in the types of patients that use the online services, within each individual preferences for online treatment may vary. The less serious an illness appears to be (i.e., the lower the likelihood urgent care is needed from the patient’s perspective) the more likely individuals will seek online care.

Thus, although online health clinics may save money, extrapolating these savings over the entire population is likely to produce an overestimate.

The demand side of the equation–that patients will demand online access to around the clock medical care–may drive the market (especially for young adults and families) in the future.

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One Comment

  1. […] through which health care economists (okay, all economists) view the world. As an example, THE Healthcare Economist, Jason Shafrin, writes about how HealthPartners in Minnesota launched an online health clinic that […]

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