Greater Adoption of Telemedicine Could Reap Benefits for the Canadian Economy of Nearly 6 Billion CAD Annually
December 6, 2021
- Increased use of telemedicine in the form of teleconsultations in Canada could offer cost savings in terms of fewer missed appointments, reduced visits to emergency departments, and a large reduction in travel and waiting times for patients
- The economic value of travel time saved could generate CAD 5B per year alone
- Fewer missed appointments and unnecessary visits to emergency departments could save CAD 150M per year
- Providing access to a doctor through teleconsultation to those without local care is valued at CAD 600M per year
Increasing the use of telemedicine in Canada through teleconsultations between patients and their primary care provider could lead to benefits for patients, society, and the economy, according to a new report from not-for-profit research organisation RAND Europe. The economic value of time saved, through fewer hours spent on travelling to appointments and waiting, could be up to CAD 5B alone each year.
The study's evidence review showed that telemedicine can make it easier and more convenient for patients to engage with their health care providers, leading to more flexible and real-time care and, with some health conditions, can lead to better patient outcomes. Telemedicine can overcome geographic barriers and be particularly beneficial for patients in rural and Indigenous communities where there is a shortage of doctors.
The study also suggests that telemedicine could benefit the Canadian health system through more efficient types of consultations, fewer missed appointments, and reducing unnecessary use of emergency care services.
The study's authors noted concerns, however, that telemedicine could exacerbate existing health disparities if such services are predominantly used by certain socio-economic population groups. They also noted that an increase in the adoption of telemedicine could increase total healthcare cost expenditures through increased utilisation of services. The study concluded that the existing evidence around the overall cost-effectiveness of telemedicine is mixed and not conclusive, although the evidence suggests that the largest potential economic benefits of telemedicine adoption is savings in travel times for patients.
Researchers put an economic value on the time saved by comparing a potential increase in teleconsultations in primary care settings to a baseline corresponding to pre–COVID-19 use. They used a macroeconomic model using data from the Canadian economy to calculate the cost.
Some of the time saved will have a positive effect on productivity, such as through fewer working hours lost, and some will increase available leisure time. The analysis showed that an increased uptake of 50% could lead to economic savings of up to CAD 5B annually for Canada [See Table 1].
“The reduced need to travel and the potential reduction in waiting time for patients are important convenience factors and also result in potentially positive effects on the wider economy,” said Marco Hafner , the study's lead author and a senior economist at RAND Europe. “However, for some people and types of health conditions, replacing face-to-face consultations with remote consultations will not be suitable.”
The researchers further calculated the direct health care cost savings that could result from fewer emergency department visits and missed appointments if teleconsultations could be offered to patients. For example, if 50% of unnecessary emergency department visits and missed appointments could be averted, the Canadian health care system would save up to CAD 150M as a result.
A final analysis applied an emerging valuation method that considers the intangible benefits or “welfare gains” that people experience by having a primary care provider available to them. At least 3% of Canadians report that they do not have a regular doctor available in their local area and cite long waiting times and distance and transportation as major barriers to accessing care. The researchers estimated that if 50% of this population could be provided access to a family doctor through teleconsultations, the aggregated well-being value across Canada would be CAD 600M per year.
The study recommends several actions that could be taken to improve access to telemedicine. Many of these recommendations are applicable internationally. Of relevance for Canada is the national harmonisation of electronic medical records, the improvement of digital literacy skills for practitioners and patients, and the modification of the physician fee system. The report also found that closer cooperation among key Canadian stakeholders could help ensure universal access to telemedicine, especially in remote and Indigenous communities.
Hafner said: “Despite governments temporarily lifting some barriers to allow the broader use of telemedicine, the COVID-19 pandemic has emphasised the presence of many remaining challenges. Several existing barriers would have to be addressed to support a more-sustained uptake in telemedicine after COVID-19 and unlock some of the potential associated with its increased use.”
This research, prepared for TELUS, was subject to RAND Europe's rigorous evaluation and quality review process, and does not imply endorsement of any product or service. RAND Europe independently conducted the analyses performed and presented in this report and had full editorial control.
Other authors of the report “The potential socio-economic impact of telemedicine in Canada“ are Erez Yerushalmi, Eliane Dufresne, and Evangelos Gkousis.
- ENDS -
Notes to Editors:
- To arrange an interview with one of the researchers on the project, contact Cat McShane on email@example.com or +44 (0) 7525 967 079.
- The researchers applied an emerging valuation method that calculates the well-being effects of things or events that do not have a direct market value, such as feelings or states of health. The approach is commonly referred to as the 'life satisfaction' or 'well-being valuation' approach and measures the monetary value that a person would have to be compensated with to have the same level of life satisfaction in the absence of a significant factor, such as not having a primary care provider available.
Table 1: Economic Value of Time Saved—Baseline Scenario Pre–COVID-19 Levels of Teleconsultations
|Telemedicine usage scenario (CAD, million/year)|
|Panel A. GDP only|
|Newfoundland and Labrador||0.98||5.87||20.55||45.05|
|Prince Edward Island||0.18||1.10||3.84||8.42|
|Panel B. GDP plus value of leisure|
|Newfoundland and Labrador||1.66||9.98||34.94||76.58|
|Prince Edward Island||0.31||1.87||6.53||14.32|
Notes: Table reports monetised benefits of telemedicine across different usage scenarios (5 per cent; 10 per cent; 25 per cent; 50 per cent). Estimated are the GDP value of time saved and the economic value of additional leisure time associated with a reduction of time spent visiting a primary care provider. The reported values by scenario are compared against a pre-pandemic baseline scenario of 4 per cent adoption of teleconsultations. We estimate that if the proportion of primary care consultations in Canada that are held remotely increases to 5 per cent (from a 4 per cent baseline), the value of time saved in GDP terms is CAD 64M per year. Considering the economic value of leisure as well, this increases to CAD 109M per year.
RAND Europe, an affiliate of the RAND Corporation, is a not-for-profit research organisation whose mission is to help improve policy and decision making through research and analysis.