Study Finds Teledermatology More Cost-Effective than Conventional Model

Using telemedicine practices in dermatology to remotely triage and manage patients can lead to significant cost savings, a new study finds.

Telemedicine, or teledermatology, has been associated with improved access to care and clinical efficiency without a loss of diagnostic accuracy. However, the literature has been scarce and mixed in its assessments of cost-effectiveness.

A team of investigators affiliated with the San Francisco School of Medicine, University of California; Stanford University School of Medicine, Stanford; and Indiana University, conducted a retrospective cost minimization analysis at the Zuckerberg San Francisco General (ZSFG) Hospital and Trauma Center. They compared the organization-wide cost of managing newly referred patients in a traditional setting and a telemedicine setting.

“The main outcome was mean cost to the health care organization to manage newly referred dermatology patients with or without teledermatology triage,” they wrote.

They constructed decision-tree tree models in order to estimate costs. These models characterized the possible care paths with both teledermatology and a conventional dermatology model.

The investigators evaluated branch probabilities through medical record review or through reports generated by Medweb.

Further, they applied costs associated with primary care visits, dermatology visits, and teledermatology visits so that they could estimate the mean costs of patient management over the course of 6 months.

Mean costs for each visit included personnel costs. For the telemedicine model, the investigators also incorporated software implementation and maintenance costs.

Overall, they assessed a total of 2098 patients, with 55% being men and 53.4 years being the mean age. As many as 41.9% identified as non-white.

Additionally, the top 3 diagnostic categories were benign growth (32.0%), infection (14.5%), and eczema-tous dermatitis (12.4%).

The mean cost per patient to the health care organizatino for the teledermatology triage model was $559.84. 

In contrast, the estimated mean cost per patient within the conventional care model was $699.96.

“The mean per-patient cost savings associated with teledermatology implementation was $140.12, which represents a statistically significant difference (P < .001),” they wrote. “Given an annual dermatology referral volume of 3150 patients, the analysis estimates an annual savings of $441,378.”

They also found in their sensitivity analysis that telemedicine consultations would need to be 4 times more expensive for both models (teledermatology and convetional) to be equal and cost neutral.

In terms of limitations, they acknowledged their failure to account for other fixed costs, such as rent, supplies, and utilities in their telemedicine model. Additionally, they did not account for revenue generated from billing and potential incurring of costs from missed appoinments..

In their conventional care model, they assumed primary care providers would always refer patients to a dermatologist rather than directly managing the dermatological symptoms themselves.

Nonetheless, they expressed optimism from these results.

“Implementation of teledermatology at the ZSFG was associated with a significant reduction in the mean cost of managing patients referred to the dermatology department,” they wrote. 

“Therefore, teledermatology has the potential to produce cost savings when applied in closed health care systems.”

They believed that future research should include an analysis of teledermatology’s impact on clinician workload, clinical outcomes, and emergency department visits.

The study, “Cost Minimization Analysis of a Teledermatology Triage System in a Managed Care Setting,” was published online by JAMA Dermatology.