For years, a quiet tension has simmered in the halls of Congress and the boardrooms of health insurance companies. On one side, patient advocates and rural providers argued that telemedicine was the key to unlocking healthcare access for millions. On the other, fiscal hawks worried that making virtual visits as easy—and as reimbursed—as in-person appointments would trigger a tidal wave of unnecessary utilization, sending national healthcare spending into a tailspin.
New research led by UCLA suggests that neither the alarmists nor the optimists were entirely correct. A comprehensive study published in JAMA Network Open found that the massive expansion of telemedicine during the COVID-19 pandemic did not lead to a significant increase in overall medical visits or healthcare spending across the board.
The findings provide a critical data point for lawmakers currently debating the future of virtual care. During the height of the pandemic, the Centers for Medicare & Medicaid Services (CMS) implemented a series of emergency flexibilities—including payment parity, which ensured doctors were paid the same for a virtual visit as an in-person one, and the removal of geographic restrictions that previously limited telemedicine to specific rural areas. These policies, which are currently set to expire in 2027, were designed to keep the healthcare system functioning during lockdowns, but they fundamentally changed how Americans interact with their doctors.
As a physician, I have seen this shift firsthand. The convenience of a video call can be a lifeline for a patient with mobility issues or a working parent. However, the systemic question has always been whether this convenience leads to “over-utilization”—patients seeking care for minor issues they would have otherwise managed at home—and who, exactly, is benefiting from the shift.
Substitution, Not Expansion
The study, which analyzed multi-payer medical claims data for more than 3 million U.S. Adults between January 1, 2019, and December 31, 2023, revealed a surprising stability in healthcare usage. Telemedicine visits actually fell by 2.4% and spending dropped by 0.5% over the study period. However, the researchers noted that these findings “crossed the null,” a statistical term meaning the changes were not significant enough to rule out chance.
In simpler terms: the cost of healthcare didn’t skyrocket because of telemedicine, but it didn’t plummet either. The most significant takeaway was that telemedicine appears to be acting as a substitute for traditional care rather than a way to bring new, underserved patients into the system.
“Our findings suggest neither prediction came true on a national scale,” said Dr. John N. Mafi, associate professor-in-residence of medicine at the David Geffen School of Medicine at UCLA and the study’s lead author. “As telemedicine use grew, visits and spending in heavy users tracked closely with patterns in lighter users.”
For those hoping that virtual care would bridge the “digital divide” and close longstanding gaps in healthcare access, the results are, as Dr. Mafi puts it, “sobering.” The data suggests that people who already had access to care simply switched the medium through which they received it, while those in the most vulnerable positions did not see a proportional surge in utilization.
Breaking Down the Data by Population
The researchers looked closely at various subgroups to see if the impact of telemedicine varied by geography or insurance type. While some fluctuations appeared in the raw percentages, none reached the threshold of statistical significance, meaning the trend remained remarkably flat across different demographics.
| Population Group | Change in Visits | Change in Spending | Statistical Significance |
|---|---|---|---|
| Urban Populations | -4.4% | -2.3% | Not Significant |
| Rural Areas | +3.4% | +3.8% | Not Significant |
| Medicaid-Insured | Not Specified | -2.5% | Not Significant |
| Socially Vulnerable | Not Specified | -1.5% | Not Significant |
The slight uptick in rural visits and spending is a glimmer of hope for advocates, but because the change wasn’t statistically significant, it doesn’t yet prove that telemedicine is solving the rural provider shortage. The study also noted that those who were the “least socially vulnerable” saw a 4.5% increase in spending, further suggesting that the benefits of the virtual shift may be skewing toward those who already had the means to navigate the system.
The Road to 2027
The timing of this research is pivotal. The CMS flexibilities—the “rules of the road” for pandemic-era telemedicine—are not permanent. They are currently on a glide path toward expiration in 2027. Lawmakers are now tasked with deciding which of these policies should be codified into permanent law and which should be rolled back.
The debate centers on three main pillars:
- Payment Parity: Should a 15-minute video call be reimbursed at the same rate as an office visit?
- Geographic Restrictions: Should telemedicine be available to everyone, or should it remain a tool primarily for rural residents?
- Cost Sharing: Should patients continue to have eliminated out-of-pocket costs for virtual visits to encourage use?
Senior author Dr. Katherine Kahn, a distinguished professor of medicine at UCLA and senior natural scientist at RAND, cautioned that this study is an “early read.” Because the data only runs through late 2023, it captures a period where the healthcare system was still settling into a “new equilibrium” following the official end of the public health emergency.
The study did have limitations: it relied on claims data from MedInsight, meaning it did not include people without insurance. The design was observational, meaning it could show an association between telemedicine and spending, but it couldn’t definitively prove that one caused the other.
Disclaimer: This article is for informational purposes only and does not constitute medical or legal advice. Please consult with a healthcare provider or policy expert for specific guidance.
The next major checkpoint for these policies will be the ongoing legislative reviews as the 2027 deadline approaches, with further data from CMS expected to inform whether payment parity becomes a permanent fixture of American medicine.
Do you prefer virtual visits or in-person care? Let us know in the comments or share this story with someone navigating the healthcare system.
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