Telehealth Adoption and Discontinuation by US Hospitals: Results From 2 Quasi-Natural Experiments

Background: Prior US hospital telehealth (video visit) studies have focused on describing factors that influence telehealth adoption or performance effects for specific patient segments, hospital systems, or geographic regions. To our knowledge, a larger-scale, national-level (US) study has yet to be conducted on the causal impacts of hospital telehealth adoption as well as discontinuation. Objective: The aim of this study is to understand the causal impact of US hospital telehealth adoption or discontinuation on hospital performance from 2016 to 2018. Methods: We analyzed impacts of telehealth adoption or discontinuation by US hospitals on emergency department visits, total ambulatory visits (minus emergency department visits), outpatient services revenue, total facility expenses, and total hospital revenue for the 2016-2018 period. We specifically focused on performance effects for hospitals that switched from not having telehealth to adopting telehealth, or vice versa, during the 2016-2018 period, thus exploiting 2 quasi-natural experiments. We applied a difference-in-differences research design to each of the 2 main analyses. We compared hospitals that have made a telehealth change to groups of hospitals with similar characteristics that did not make a telehealth change, which established a counterfactual. To appropriately match hospitals between treatment and control groups, we applied propensity score matching. Our primary data were from the American Hospital Association Annual Survey and the Healthcare Cost Report Information System data. Several control variables were obtained from additional sources, including the Area Health Resource File and the Federal Communications Commission. Results: We found that telehealth adoption by US hospitals during the 2016-2018 period resulted in, on average, an increased number of total ambulatory visits (P=.008), increased total facility expenses (P<.001), and increased hospital revenue (P=.004) compared with the control group. We found that telehealth discontinuation during the same period resulted in, on average, decreased outpatient services revenue (P=.02) compared with the control group. Conclusions: Our findings suggest that telehealth adoption increases use but has mixed impacts on performance, given that cost and revenue increase. However, once telehealth is offered, removing it can have a negative impact on performance, implying that returning to prior performance levels, if telehealth is removed, may be challenging.