ESSAYS ON TELEMEDICINE AND MENTAL HEALTH DURING THE COVID-19 PANDEMIC

The COVID-19 pandemic resulted in an explosion in demand for telemedicine services and with it myriad new, untested telemedicine policies. We isolate the impact of a policy which selectively removed patient-side cost-sharing for telemedicine services from April-September 2020 using both difference-in-differences and instrumental variable designs to estimate the causal effect of the policy change itself as well as the effect of increased telemedicine use on a variety of outcomes. We study the effects of the cost-sharing waiver on telemedicine utilization, the elasticity of demand for telemedicine, and its substitutability with in-person services. Additionally, we study the effects of shifting to the virtual environment on treatment decisions, adverse health events, and spending. We focus specifically on the treatment of mental illness which constitutes the majority of telemedicine use and is likely to remain the primary use in the post-pandemic landscape. Our results indicate that removing telemedicine cost-sharing increases telemedicine use with an offsetting decrease in in-person utilization, ultimately resulting in modest reductions in spending. Further, we find patients who use more telemedicine increase their use of psychotherapy and decrease their use of prescription psychotropic medications, though are not more likely to experience an adverse health event. Our results suggest that patient-side cost-sharing is an effective lever to influence telemedicine utilization behaviors and that encouraging greater telemedicine use has the potential to decrease overall spending without adversely affecting patients’ health outcomes