Cost minimization analysis of a store-and-forward teledermatology consult system

The aim of this study was to perform a cost minimization analysis of store-and-forward teledermatology compared to a conventional dermatology referral process (usual care). In a Department of Defense (DoD) setting, subjects were randomized to either a teledermatology consult or usual care. Accrued healthcare utilization recorded over a 4-month period included clinic visits, teledermatology visits, laboratories, preparations, procedures, radiological tests, and medications. Direct medical care costs were estimated by combining utilization data with Medicare reimbursement rates and wholesale drug prices. The indirect cost of productivity loss for seeking treatment was also included in the analysis using an average labor rate. Total and average costs were compared between groups. Teledermatology patients incurred $103,043 in total direct costs ($294 average), while usual-care patients incurred $98,365 ($283 average). However, teledermatology patients only incurred $16,359 ($47 average) in lost productivity cost while usual-care patients incurred $30,768 ($89 average). In total, teledermatology patients incurred $119,402 ($340 average) and usual-care patients incurred $129,133 ($372 average) in costs. From the economic perspective of the DoD, store-and-forward teledermatology was a cost-saving strategy for delivering dermatology care compared to conventional consultation methods when productivity loss cost is taken into consideration.