Enthusiasm for virtual healthcare is waning, but investments continue

Among the many impacts on the benefits world of the COVID-19 pandemic, the rise of virtual healthcare emerged as one with staying power.

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However, enthusiasm among employers for this benefit may be tempered, according to a recent study by the Business Group on Health. In 2021, 85% of employers surveyed agreed virtual healthcare will significantly impact how healthcare is delivered in the future. Still, that percentage has steadily dropped to 64% this year, according to the survey of 152 employers, representing approximately 19 million employees in the U.S. More than 80% of the employers had more than 10,000 employees.

A similar trend is happening among consumers, with less than half (40%) of survey respondents saying they plan to continue to use telehealth at similar or greater levels than they did during the pandemic, according to a McKinsey & Co. report.

However, even though they may not be as optimistic about the impact of virtual healthcare as they once were, employers are still making plenty of room in their benefits budget for it—albeit differently. U.S. employer investments in virtual healthcare services and products are expected to soar 77% over the current level in the next three years, according to a survey released Monday, as organizations turn to virtual care for affordability and accessibility.

Importantly, however, employers are shifting their spend: opting for tools built with greater integration that can allow them to narrow the number of vendors they work with—perhaps suggesting employers are using their concerns about virtual healthcare to shape their spending in this area.

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The expected increase follows a 21% jump in employer investments in this sector in the last 18 months, say researchers at Teladoc Health. The virtual care platform provider surveyed more than 300 human resource executives at U.S. companies with 2,500 or more employees for its 2023 Virtual Care Transformation Index.

Addressing the virtual healthcare disconnect

Why is employer enthusiasm about virtual healthcare dropping?

For starters, Business Group on Health’s original study was conducted in 2021—as the pandemic was still raging.

“We see that the pandemic had an impact on employers’ overall perspective on virtual health,” said Brenna Shebel, vice president at Business Group on Health, during a press conference on the report. “In the heat of the pandemic, the lack of in-person care made virtual health seem as the go-to for many employees. There was a lot of optimism and hope for virtual health.”

Brenna Shebel
Brenna Shebel

However, employers may have encountered some limitations of virtual healthcare, Shebel says.

That could include a lack of coordination between an employee’s virtual and in-person care providers, says Shebel, noting that 70% of surveyed employers pointed to this concern. Also, 54% of survey participants were worried about the quality of care being delivered via virtual health, while 46% expressed concern about a lack of integration among different virtual health providers, according to the Business Group on Health survey.

Despite these concerns, Shebel emphasizes that two-thirds of employers still feel that virtual health holds potential—a significant number. And it could reflect that, despite doubts, employers are recognizing that the virtual healthcare provider industry is evolving, adds Kelly Bliss, Teladoc Health U.S. group health president.

Kelly Bliss
Kelly Bliss

For instance, the breadth of care options available through virtual healthcare has expanded—compared to its early days, when it was often called telemedicine and primarily offered online physician consultations. Now, employees can also receive consultations with mental health providers, dietitians and pharmacists.

According to Teladoc’s study, 40% of employers plan to expand virtual mental health services over the next three years. Mental health and primary care physician services are the most heavily used virtual health services by employees; three out of four employers plan to add enhanced virtual mental health services for adolescents, children and caregivers, the survey notes.

Bliss also adds that the healthcare community is working on strengthening connections between virtual care providers and in-person providers.

“We have always said that virtual care can’t exist by itself,” she says. “We’re certainly seeing more and more partnerships.”

Dawn Kawamoto, Human Resource Executive
Dawn Kawamoto
Dawn Kawamoto is HR Editor of Human Resource Executive. She is an award-winning journalist who has covered technology business news for such publications as CNET and has covered the HR and careers industry for such organizations as Dice and Built In prior to joining HRE. She can be reached at [email protected] and below on social media.