The Telehealth Revolution

Before March 2020, telehealth was a niche feature of the US healthcare system. Then the pandemic hit, and CMS suspended virtually every telehealth restriction overnight. This post tracks the largest natural experiment in healthcare delivery ever conducted – from the initial 47% adoption spike through the permanent ~13% baseline that emerged.

COVID-19 forced a telehealth experiment on the entire US healthcare system in 2020. Utilization went from essentially zero to 47% of eligible Medicare beneficiaries in a single quarter. Five years later, telehealth hasn't disappeared — it's settled at ~13%, a permanent structural shift from the pre-pandemic baseline of near zero. This post shows where that new baseline landed and who uses it most.

Before March 2020, telehealth was a niche feature of the US healthcare system. Medicare covered a narrow set of telehealth services only for patients in rural areas, only for certain specialties, and only when conducted from an approved facility. In-person care was the default, and most patients had no reason to deviate from it.

Then the pandemic hit, and CMS issued an emergency waiver that suspended virtually every telehealth restriction overnight. Any Medicare beneficiary could receive any covered service via video or phone from any location. Reimbursement rates were set equal to in-person visits to eliminate the financial disincentive for providers.

What followed was the largest natural experiment in healthcare delivery ever conducted. The question was whether patients and providers would revert to in-person care when restrictions lifted — or whether the forced experiment would reveal a latent demand for remote care that the previous regulatory structure had artificially suppressed.

The data, now five years out, gives a clear answer: both things happened. The extreme peak didn't last. But telehealth didn't collapse back to zero either. A meaningful fraction of healthcare visits permanently shifted to remote delivery.

This post visualizes the full trajectory using CMS Medicare Telehealth Trends data — quarterly from Q1 2020 through mid-2025, covering 50 million Medicare FFS beneficiaries.

The quarterly trend is stark. In Q1 2020 — the first three months of the year, before lockdowns fully took hold — 6.9% of Medicare beneficiaries used telehealth. In Q2 2020, that figure hit 46.7%. One in three beneficiaries who would typically see a doctor in person instead used a phone or video visit.

The spike was driven by necessity: clinics closed, patients were afraid to enter buildings, and CMS simultaneously removed every barrier to billing for telehealth. The incentives all pointed in one direction at once.

After the acute phase, utilization fell but didn't collapse. Q3 2020: 28.2%. Q4 2020: 27.8%. The emergency was winding down but patients and providers had adapted. Workflows changed. Scheduling systems were rewritten. Patients discovered their doctor could diagnose a rash over video. Therapists discovered that sessions over Zoom were often just as effective — and more accessible.

By 2023 and 2024, telehealth utilization had stabilized at roughly 13–14% per quarter. Congressional action extended the emergency telehealth waivers multiple times, and CMS made several provisions permanent in subsequent rulemaking. The infrastructure built in 2020 — the scheduling software, the patient familiarity, the provider workflows — stayed in place.

Pre-pandemic, telehealth was effectively at 0% for Medicare beneficiaries due to geographic and facility restrictions. The ~13% post-pandemic baseline represents a genuine, durable expansion of access. For the roughly 50 million Medicare beneficiaries, that means millions of visits per quarter that previously required a car trip, time off work, and a waiting room are now handled from home.

The rural-urban comparison is one of the most politically and practically charged dimensions of telehealth policy. The original Medicare telehealth restrictions were partly motivated by a concern that rural patients — who lack broadband and may have older technology — couldn't effectively use remote care. The emergency waiver suspended the geographic requirements, allowing urban patients to use telehealth for the first time.

The data shows both groups surged during COVID. Urban patients, with better technology infrastructure, generally showed slightly higher peak adoption. But rural beneficiaries maintained telehealth at meaningful rates post-pandemic as well. For rural patients — who may live an hour or more from the nearest specialist — telehealth offers the most concrete access benefit. A psychiatry follow-up that would otherwise require a 90-minute round trip becomes a 30-minute video call.

The rural-urban gap in telehealth adoption has significant policy implications. CMS has debated whether to make the geographic waivers permanent; the utilization data suggests demand exists in both populations.

The age breakdown reveals a counterintuitive pattern. Younger Medicare beneficiaries (ages 0–64, primarily those on Medicare due to disability) showed notably higher telehealth adoption than elderly beneficiaries aged 75+. The 85-and-over cohort — precisely the population most burdened by travel to medical appointments — shows the lowest adoption.

This is partly a technology access story. Older seniors are less likely to own smartphones or tablets, more likely to have limited broadband access, and more likely to rely on audio-only phone visits rather than video. CMS data shows that audio-only (telephone) visits were a significant fraction of telehealth in 2020–2021 before policy changes added additional restrictions for audio-only billing.

It's also partly a clinical story. The oldest beneficiaries have higher rates of conditions requiring physical examination — wound care, fall assessments, mobility evaluations — where in-person care genuinely cannot be substituted. The populations where telehealth adds the most value (mental health, chronic disease medication management, follow-up visits) skew younger within Medicare.

The gap narrowed over time as older patients and caregivers became more comfortable with the technology, but it persisted through 2024.

State-level telehealth adoption in 2024 shows meaningful geographic variation. States in the Northeast and some Mountain West states tend to show higher adoption. States in the Deep South and parts of the Midwest tend to show lower adoption.

The geographic pattern correlates with several factors: broadband penetration (higher broadband → higher telehealth capacity), state Medicaid telehealth policy (states with more expansive Medicaid coverage see higher dual-eligible adoption), and the mix of urban vs rural beneficiaries. States with large urban populations have more beneficiaries with the technology to use telehealth effectively, but also more readily available in-person care — so the net effect on utilization is ambiguous.

Notably, states with large rural populations don't uniformly show lower telehealth adoption. In some rural states, telehealth has become a primary mode of specialty access precisely because in-person alternatives are scarce or distant.

Dual-eligible beneficiaries — those enrolled in both Medicare and Medicaid — use telehealth at substantially higher rates than Medicare-only beneficiaries. Dual eligibles are generally lower-income, more likely to have multiple chronic conditions, and more likely to face transportation barriers to in-person care.

The pattern is consistent across the full 2020–2024 period: dual eligibles adopted telehealth at higher rates during the COVID spike and maintained it at higher rates afterward. This suggests that for the lowest-income Medicare beneficiaries, telehealth isn't just a convenience — it's often the most accessible modality.

The equity implication runs in two directions. Telehealth reduces access barriers for low-income beneficiaries who lack transportation or can't take time off work for clinic visits. But audio-only visit restrictions and broadband requirements disproportionately burden the same population. Policy decisions about telehealth reimbursement and modality requirements have larger effects on dual eligibles than on the general Medicare population.

All data comes from the CMS Medicare Telehealth Trends dataset (UUID 939226be-b107-476e-8777-f199a840138a), updated quarterly.

The dataset covers Medicare Fee-for-Service (FFS) beneficiaries only. Medicare Advantage (MA) beneficiaries are excluded — MA plans negotiate telehealth coverage separately and are not subject to the same FFS billing claims data. MA now covers roughly 50% of Medicare beneficiaries, meaning this data captures roughly half of the total Medicare population.

Key metric: Pct_Telehealth = Total_Bene_Telehealth / Total_Bene_TH_Elig. The denominator is beneficiaries who received any telehealth-eligible service during the period (either in-person or via telehealth), not total Medicare enrollment. This means the percentage reflects the telehealth share of eligible visits, not the share of all beneficiaries.

Telehealth definition: Services billed with telehealth-eligible HCPCS codes using the appropriate place-of-service code or modifier. Audio-only (telephone) visits are included in some periods and excluded in others based on CMS policy changes.

Data period: Q1 2020 through Q2 2025. Pre-2020 telehealth utilization was near zero due to geographic and facility restrictions; no comparable baseline data exists in this dataset.

Rural/Urban classification: CMS Rural-Urban Commuting Area (RUCA) codes, aggregated to Rural, Urban, and Unknown.