Our Take
Telemedicine substituted for in-person care rather than expanding access; the cost-control win masks a failure to close care gaps.
Why it matters
Congress will vote on permanent telemedicine reimbursement rules next year. This UCLA study suggests the pandemic experiment neither blew up costs nor solved access disparities, forcing policymakers to choose between fiscal caution and equity with incomplete evidence.
Do this week
HR and benefits leads: audit your telehealth claims data through Q3 2023 to check whether your own population tracks the UCLA finding (flat utilization) or diverges, so you can brief exec team on renewal strategy before Congressional votes.
Telemedicine use flattened after initial pandemic surge
A UCLA-led study published in JAMA Network Open examined telemedicine claims across all major insurance types from 2019 through late 2023 (per the research team). The finding: telemedicine visits dropped 2.4% and spending declined 0.5% over that period. The researchers found no statistically significant changes across subgroups examined.
The analysis covered urban populations (2.3% spending decline), Medicaid recipients (2.5% decline), Medicare Advantage members (3% decline), and socially vulnerable populations (1.5% decline). Rural areas saw 3.8% higher spending, commercially insured patients 1.1% more, Medicare fee-for-service 1% more, and the least socially vulnerable populations 4.5% higher spending. None of these variations reached statistical significance.
Dr. John Mafi, associate professor at UCLA's David Geffen School of Medicine, stated the core finding plainly: "As telemedicine use grew, visits and spending in heavy users tracked closely with patterns in lighter users." The implication is direct. Telemedicine expanded during the pandemic when the Centers for Medicare & Medicaid Services introduced payment parity, eliminated geographic restrictions, and waived cost sharing. It did not permanently reshape utilization or cost curves once those temporary policies began to expire.
Congress must extend or modify telehealth rules without a clear equity outcome
The pandemic telemedicine experiment was defended on two competing grounds: budget hawks feared it would explode costs; equity advocates hoped it would close longstanding access gaps. UCLA's data shows neither scenario materialized at scale.
Dr. Katherine Kahn of UCLA noted the limitation of the finding. The study "runs only through late 2023, when telemedicine use was still settling into a new equilibrium." That matters because Congressional action on permanent telemedicine policy is expected next year. Policymakers face a choice without complete evidence. They can lock in reimbursement parity (cost-neutral, proven) or maintain current rules (insufficient to close gaps). Previous research had raised concerns that telemedicine expansion could worsen health disparities across populations. The UCLA study does not confirm those fears at scale but also provides no proof that telemedicine closes them.
The timing pressure is real. Temporary pandemic-era telehealth policies expire in 2025. Lawmakers will vote without knowing whether the effects are truly neutral long-term or whether quality of care and health outcomes differ across populations who depend on telehealth most.
Treat telemedicine as a delivery channel shift, not an access fix
For employers and benefits teams, the UCLA finding suggests telemedicine has matured into a substitution play rather than an expansion tool. Heavy telemedicine users do not generate significantly higher spending or visit counts than light users. This means your telehealth vendors are not inflating utilization through convenience alone.
The practical implication: negotiate telehealth contracts with realistic expectations. Plan for telemedicine to absorb a portion of your in-person visit volume at lower or equivalent cost, but do not expect it to materially increase access for hard-to-reach populations within your plan. If equity is a stated goal, design targeted programs (subsidies for rural members, asynchronous messaging for shift workers) rather than relying on telemedicine policy alone to solve the problem.
Monitor your own claims data closely over the next 12 months. The UCLA researchers explicitly called for ongoing surveillance as policies change. Your plan's experience may diverge from the national aggregate, especially if your member base skews rural, socially vulnerable, or geographically dispersed. Early insight into local effects will give you leverage in next year's policy and contract negotiations.