An App Call a Day Keeps the Patient Away? Substitution of Online and In-Person Doctor Consultations Among Young Adults

Abstract

The emergence of markets for on-demand online physician consultations –direct-to-consumer telemedicine (DCT) – is currently transforming many healthcare settings. DCT may be a cost-effective substitute for ordinary consultations, but the convenience of seeking DCT may increase demand and costs for health insurers. To causally assess to which degree DCT consultations substitute for in-person consultations, we exploit exogenous changes in patient fees in a fuzzy difference-in-discontinuities analysis of young adults in Sweden. We estimate a degree of substitution of 45%, implying an increase in the consultation volume. Characteristics of the additional demand raise concerns related to healthcare equity, efficiency and costs.