Telehealth Parity Laws and Mortality Rates

Technology allows physicians to consult with and remotely monitor patients. Many providers use telehealth to better utilize slack resources and to increase health care access in underserved areas. Typical conditions treated via telehealth include congestive heart failure, chronic conditions such as depression and diabetes, and dermatology.

Since 1995, about half of the U.S. states have enacted telehealth parity laws for private insurance. These laws require that insurance covers services provided via telehealth. The intent of these laws is to increase health care access, particularly in areas with few providers. Required coverage increases the payoff to providers adopting the new technology.

We estimate the effect of telehealth parity laws on mortality rates of all causes and mortality rates for cerebrovascular diseases, diabetes mellitus, influenza and pneumonia, ischemic heart disease, and suicide. We estimate these relationships using difference-in-differences, an event study specification, and synthetic control analysis. In most cases, the data satisfy the parallel pre-trends assumption, minimizing concerns about policy endogeneity. Laws requiring more and more generous insurance coverage of telehealth improve health outcomes. We explore whether effects of these laws differ in rural counties compared to urban counties and for various demographic grounds. We find declines in mortality rates post-parity laws, driven by decreases in the death rate due to ischemic heart disease.

Public insurance programs tend to have more restrictions in reimbursements for telehealth services. Our preliminary results suggest that relaxing Telehealth regulations in programs such as Medicare might be an effective way to increase access and improve patient health outcomes.