The telehealth boom in 2020 helped to fuel massive growth for big players Amwell, Teladoc, Doctor on Demand and other virtual care companies.
But competition is heating up with Amazon and Walmart both going all-in on telehealth. Retail giant Walmart plans to acquire multi-specialty telehealth provider MeMD while Amazon recently signed its first enterprise customer for its Amazon Care virtual health service.
Teladoc CEO Jason Gorevic doesn’t appear to be sweating the competition, though, saying the company’s track record in the market is an advantage.
“If you look at our 2020 selling season, about two-thirds of our bookings were for multi-product bookings and I think that speaks to the market demand and consumer demand for unified, integrated solutions,” he said during an interview with CNBC’s Bertha Coombs as part of CNBC’s Healthy Returns virtual event.
A recent Teladoc survey found that seven out of 10 consumers find the multiple of healthcare websites, apps and platforms to be overwhelming. “What they want is a unified experience for a broad array of conditions,” Gorevic said.
As far as competition in the market, Gorevic described Amazon Care as “overrated” at this point, given that the company only has one enterprise client.
He also said competitor Amwell (formerly American Well) has a “narrow solution and doesn’t match the full scope or scale of what Teladoc delivers.”
“That’s why I’m happy about our competitive position and the strategy we’ve taken, methodically building out organically and acquiring capabilities to deliver more value for our clients and better healthcare experiences for consumers,” he said.
Teladoc acquired digital chronic care management company Livongo in a massive $18.5 billion deal in October. Following that deal, there has been an uptick in M&A activity with Cigna’s Evernorth acquiring MDLive and Doctor on Demand merging with Grand Rounds. Health benefits platform Accolade also plans to acquire virtual primary care company PlushCare.
Gorevic said the market shift to developing more integrated telehealth solutions is a validation of Teladoc’s strategy.
But investors are worried about the company’s continued losses and the competition from Walmart, Amazon and other players.
Shares of Teladoc Health skyrocketed in the early part of the pandemic, with the company’s share price climbing 138.8% in 2020, Barron’s reported. But the stock price has stumbled and Teladoc shares are down 27.1% so far in 2021, according to Barron’s.
The virtual care company reported a wider than expected net loss in the first quarter of 2021, just shy of $200 million. Teladoc also burned $18 million during the quarter in the form of operating cash losses.
Gorevic told Combs that investors that view telehealth as a “stay-at-home phenomenon” as a result of the COVID-19 pandemic are missing the bigger picture.
“The net promoter scores, the repeat utilization, multi-product utilization across multiple conditions, these all indicate that this is here to stay,” he said. “Our first-quarter results demonstrate that. Visit volume was up 69% year over year, despite that flu volume, which we normally see a ton of in Q1, was down 90%. That says that something else is going on here as doctor office visits have come back to normal at this point.”
Consumers are turning to virtual care to address long-term health issues such as mental healthcare, dermatology, chronic conditions and diabetes prevention, he said.
“People realize they can get more convenient, better access to care and care that takes advantage of technology and the use of data to aggregate data sources to deliver better insights for the consumer that are more personalized and better insights for the physician so they can do just in time personalized interventions,” he said.
Gorevic also pointed to Teladoc’s growth in revenue per member as an indicator of the company’s successful business strategy.
“A year ago, our revenue per member was 87 cents per month. Fast forward a year, and it’s now $2.25. People are embracing multiple parts of our product portfolio. If you only look at it through the narrow lens of what we were five years ago, that would maybe point to something that would express concern, but I think that is not keeping up with the evolution of the market and the evolution of Teladoc Health,” he said.