JMIR Publications

ABSTRACT

Background:

The effects of telemedicine on health expenditures and health outcomes are an important policy question. Many countries loosened regulations on the use of telemedicine during the COVID-19 pandemic, thereby offering an opportunity to evaluate these effects via a natural experiment.

Objective:

To assess the effect of greater telemedicine use on area-level health expenditures and health outcomes related to common chronic conditions in Japan during the COVID-19 pandemic.

Methods:

We compared prefectures (area levels of government) with higher pre-pandemic telemedicine rates (FY2019) versus those with lower rates, and conducted a difference-in-differences analysis of the change in prefecture-level health expenditures from FY 2017 to 2022 and health outcomes from FY 2017 to 2021. The participants are total population in Japan from FY 2017 to 2022 (n = 126 million), and the exposure is increase in telemedicine use following the government’s relaxation of restrictions on telemedicine use as an exceptional measure during the COVID-19 pandemic. Our main outcomes are share of outpatient claims that were for telehealth services; total, inpatient, and outpatient annual prefecture-level health expenditures; all-cause mortality, HbA1c, systolic blood pressure, and LDL cholesterol.

Results:

Treatment prefectures (n = 15, population 62 million) were defined as those with greater than median percent telemedicine use prior to the pandemic, while control prefectures (n = 32, population 64 million) were defined as those with less than the median telemedicine use. Treatment and control prefectures shared similar demographic characteristics prior to the pandemic. The growth in telemedicine after 2020 as a share of outpatient claims increased among the treatment prefectures by 0.35 percentage-points more than among control prefectures, which represented more than a threefold increase in telemedicine use compared to the pre-pandemic median. In DiD analyses, this difference was associated with a 1.0% relative decrease (95% CI, 0.3% to 1.8%) in total health expenditure (P=.006) and a 1.1% relative decrease (95% CI, 0.2% to 2.0%) in inpatient expenditure (P=.02). Outpatient expenditures showed no significant difference as a result of increased telemedicine adoption. Most health outcomes—all-cause mortality, HbA1c, systolic blood pressure, diastolic blood pressure, and LDL cholesterol—did not show any significant changes.

Conclusions:

Areas in Japan with greater expansion of telemedicine use during the pandemic experienced a significant decrease in both inpatient and total healthcare spending, compared to areas with less telemedicine use, without harming health outcomes. Clinical Trial: Data analysis was conducted between October 2023 and December 2024. The data were publicly accessible deidentified survey data, and deemed to be not human subjects research by the Harvard T.H. Chan School of Public Health Institutional Review Board.