Telemedicine for Inclusive Care: Remedy for Socioeconomic Health Disparities?

In the U.S., telemedicine usage has skyrocketed mainly because of regulatory flexibilities provided during the COVID-19 pandemic. However, the flexibilities that enabled telemedicine visits have been granted temporarily; most of them are set to expire by the end of the public health emergency. Policy makers will soon decide whether to keep telemedicine as a feasible healthcare delivery channel for millions of Americans. Our paper develops important guidelines on this pressing issue. Reducing health disparities among different socioeconomic groups, thereby enhancing health equity, is the main objective of any public health policy. Telemedicine is generally seen as an important tool to reduce health disparities because it improves access to care by eliminating transportation barriers. This benefit is especially prominent when technology access disparities are minimal. However, we find that even in the absence of such digital disparities, introducing telemedicine can exacerbate health disparities between low- and high-income patients for certain population structures. Specifically, such a result arises when some low-income patients have access to in-person care, and low- and high-income patients do not excessively differ in their inconvenience costs due to in-person care. We show that while improving telemedicine quality can be a remedy for some population structures, it interestingly backfires for some others by worsening health disparities. Our analysis establishes that allowing the provider to make channel-specific insurance coverage acceptance/rejection decisions can be a remedy for the telemedicine-driven health disparities. We also analyze the impact of telemedicine on auxiliary metrics, such as expected system-wide healthcare spending and health improvement.