With an emphasis on member engagement strategies, some big new clients and a boost in utilization from a “short but severe cold and flu season” in early 2017, Teladoc’s first quarter of the year kept the telemedicine company in good financial standing.
With record-high visits totaling 385,000 in the quarter ending March 31, the company saw revenue increases across the board. Total revenue was at $42.9 million, representing an increase of 60 percent from Q1 2016, with subscription and visit fee revenues at $34.3 million (up 66 percent) and $8.6 million (39 percent), respectively.
Membership reached 2.6 million, an increase of 34 percent year-over-year that the company owes to a targeted effort to engage members with what they called “surround sound engagement strategy” and “seamless implementations” of new client business from the likes of Southern California Edison (the primary electricity supplier for the region) and the employees of Yale University.
“Our increasing client roaster reflects the flexibility of solutions we offer to the hospital market as well our compelling vision to help providers build healthier communities and improve patient outcomes,” Teladoc CEO Jason Gorevic said on a call with investors. “We're also pleased by contributions from our behavioral health offering, in which revenue more than doubled year-over-year, to reach approximately $5 million in that first quarter. We expect to maintain this trend throughout 2017.”
Gorevic also mentioned the company’s new employer clients such as Dullards, Bear and Paychex, and said Teladoc has found increasing interest in provider markets, as evidences by newly signed agreements with multi-care health systems in Washington, Pennsylvania and an expansion with New York’s Mount Sinai.
“We also have significant interest in our specialty products from our health plan partners and have begun to roll out behavioral health and dermatology into their large books of business,” Gorevic. “Our increasing client roster reflects the flexibility of solutions we offer to the hospital market as well our compelling vision to help providers build healthier communities and improve patient outcomes. We're also pleased by contributions from our behavioral health offering, in which revenue more than doubled year-over-year, to reach approximately $5 million in that first quarter. We expect to maintain this trend throughout 2017.”
Looking forward, Gorevic said Teladoc is looking to expand their service offerings in effort to provide a “broad and integrated virtual care platform,” especially with their behavioral health products. That said, Gorevic said it was still too early to tell which trends exactly will shape how they go about attracting new clients, but that the company was seeing strong activity with health plans and large employers as well as hospital systems.
That would align with the recent findings of Reach Health’s 2017 US Telemedicine Industry Benchmark Survey, which showed hospitals are increasingly using an enterprise approach to telemedicine. Of the 436 respondents, 40 percent are using a centrally-managed platform rather than departmental approaches.
"Last year, we observed significant increases in the number of telemedicine service lines being implemented in U.S. hospitals, and this year's survey confirmed the shift to the use of enterprise telemedicine platforms," Reach Health CEO and President Steve McGraw said in a statement.
Respondents said they embraced telemedicine on an enterprise level for a specific platform’s value, such as interoperability and data analytics capabilities. The top three telemedicine objectives were all patient-oriented: improved outcomes, convenience and increasing patient engagement.
While Teladoc (nor any other telemedicine platform provider) was not mentioned by name in the report, Gorevic pointed out something he has noticed that could indicate his company could serve as an example of what customers want.
“The only other thing I guess I would say that’s different this year is that we’re seeing more activity with employers and health plans and hospital systems who previously chose one of our competitors and are coming to us for our solution and our ability to drive utilization,” Gorevic said. “That’s happening significantly more this year than it's happened in the past.”
Gorevic also updated investors on the six-years-running legal happenings with Teladoc in Texas. In a move that would, at long last, put an end to the standoff between legislators, telemedicine industry members and the state medical board, the Texas House of Representatives is set to vote on a bill to establish definitions and rules around telemedicine practice in the state. Goveric said the company was “cautiously encouraged” by developments.
The bill – introduced by Representative Four Price and negotiated between the Texas Medical Association, the Texas eHealth Alliance, telemedicine provider Teladoc – was passed in the Senate last week. If passed, it would deem synchronous audiovisual interaction as an acceptable doctor-patient relationship; allow for asynchronous “store and forward technology” or other such audiovisual technology so long as it complies with rules set forth to ensure safety and quality of virtual care.
“As many of you know, a bill that makes it clear that telehealth will continue uninterrupted in Texas, has been making its way through the state legislature and could become law in the next few weeks,” Gorevic said. “The passage of this bill into law would resolve our outstanding issues with the Texas Medical Board and would represent a significant victory for the people of Texas in securing their path to quality, affordable and accessible healthcare.”
The House is set to vote on the bill today.