Executive Summary: Telehealth in Small Group Plans: Utilization Data, Cost Impact, and What Members Actually Use
LFP-11.05 — Benefits Architecture#
Telehealth utilization peaked at 31.2 percent of healthcare visits in 2020, driven by necessity rather than preference, and stabilized between 5.7 and 7.0 percent by 2023 and 2024. The settled baseline reveals where telehealth produces value and where it does not, and the picture is narrower than vendors marketed during the peak adoption years.
Behavioral health shows the strongest sustained adoption. Trilliant Health analysis found that in 2024, behavioral health accounted for the majority of all virtual visits, representing 67 percent of telehealth encounters. FAIR Health data shows that mental health conditions account for 68.9 percent of telehealth claim lines nationally, led by generalized anxiety disorder at 34.7 percent, major depressive disorder at 21.6 percent, and adjustment disorders at 16.3 percent. This adoption is durable because therapy and psychiatric medication management translate well to video, geographic constraints on provider access are removed, and member satisfaction with video therapy is equivalent to in-person sessions.
Acute minor illness shows moderate and stable telehealth adoption. Upper respiratory infections, urinary tract infections, and rashes are conditions where diagnosis is usually clinical rather than requiring physical examination. The cost differential between telehealth and in-person visits for acute illness is narrow; the national median telehealth visit cost is $55 compared to $53 for an office visit, with savings coming from avoided facility fees and member time off work.
Chronic disease management telehealth has not demonstrated durable value in commercial populations. Member engagement declines over time. The promise of remote patient monitoring and telehealth-based chronic disease management exceeds the evidence in commercial employer plans. Optum closed its virtual care business in 2024. Walmart closed Walmart Health Virtual Care. The venture-capital-funded telehealth expansion has contracted as utilization data showed narrower effective use cases than initial projections.
The cost impact question is whether telehealth substitutes for in-person visits or generates additional visits through induced demand. A medRxiv analysis of Medicare fee-for-service claims found that increased telehealth adoption was not associated with a rise in total outpatient visits, suggesting substitution at the aggregate level. Trilliant Health’s commercial data analysis found that patients do not view telehealth as a substitute for in-person care for most conditions, except behavioral health.
Telehealth value in a level funded plan depends on how plan design channels its use. A plan that routes members to telehealth as the first point of contact for acute needs and behavioral health, with lower copays and direct scheduling, captures substitution value. A plan that provides telehealth access with no routing captures less. The distinction between telehealth as part of the care delivery model and telehealth as a convenience add-on is the same integration-versus-accretion test that applies to every component in this series.