Healthcare Economics: Financial Impact and Limitations of Telemedicine

In 2020, the US government spent over 4 trillion dollars on healthcare, accounting for over 17 percent of the nation’s gross domestic product (GDP) [1]. Despite this spending, the United States has the lowest life expectancy of the eleven developed nations in the Organization for Economic Co-operation and Development (OECD), and over 30 million Americans remain uninsured [2,3]. There have been significant efforts by healthcare policymakers and administrators, politicians, and insurance companies to try and reduce national healthcare expenditure. One area that has received significant attention (especially during the COVID-19 pandemic) has been the increase in the utilization of telemedicine in hospitals and medical practices across the US. Telemedicine is the use of remote video conferencing to communicate and distribute medical services, interventions, education, and health administration to patients [4]. Research has found these methods to be cost-effective in several medical settings and specialties. Additionally, telehealth can expand healthcare coverage to rural Americans who are otherwise effectively excluded from regular health services. With the potential to improve costs, efficiency, and access, telemedicine is integral to the future of the US healthcare system. There are, however, important roadblocks and limitations of telemedicine that need to be addressed before a digitalized future of patient-provider interactions can become a reality.

Keywords: Telemedicine; Healthcare; Economics; Healthcare management; Public Health; Healthcare policy