SAN FRANCISCO—Teladoc Health faces pressure in a saturated telehealth market, but it's hard to ignore the virtual care company's massive scale.
The company has 93 million members with access to one or more of its services and has 10,000 customers, CEO Chuck Divita said Monday afternoon during a presentation to investors at the J.P. Morgan Healthcare Conference in San Francisco.
The company sees opportunities to use its expansive reach with health plans, health systems, employers and consumers to get back on a path of sustained growth.
For the first nine months of 2024, Teladoc has brought in 1% less revenue than last year, at $1.9 billion. And, the company logged a net loss of $953 million for the first nine months of 2024, compared to $191 million during the same period in 2023.
Divita jumped on board at Teladoc Health in June from GuideWell following the abrupt departure of longtime CEO Jason Gorevic in April. The company is focused on boosting its top- and bottom-line performances as its shares have come under pressure.
Teladoc, which has been in business for 20 years, connects patients and providers virtually "at significant scale" through technology, workflow and services, Divita said. And, the company has a comprehensive approach, offering a range of services from virtual primary and urgent care to mental health to chronic condition management, he noted.
"We have a comprehensive approach in how we go to market through our business segments, both in the U.S. and globally, and importantly, comprehensive in terms of how we approach the market. We have relationships and distribution with health systems, with health plans, with employers, with institutions and with consumers, and that gives us an opportunity to reach a lot of people in terms of our approach," he told investors.
The company has two main components of its business: Teladoc Health Integrated Care, its virtual care business aimed at health plans, employers and health systems; and BetterHelp, its direct-to-consumer virtual mental health segment.
Chronic care management is going to continue to be an important growth driver for Teladoc, Mala Murthy, chief financial officer, said Monday.
The company is now teaming up with Amazon to make it easier for individuals to find and enroll in its virtual cardiometabolic programs. Customers of Amazon that are eligible for Teladoc Health’s diabetes, hypertension, prediabetes and weight management programs can now seamlessly discover and enroll in these benefits available through their employer or health plan at no additional cost through Amazon’s health benefits connector.
The tie-up with Amazon offers an "exciting avenue" to find new ways for access to the company's chronic care programs, Murthy said. "It's a distribution angle that I think is interesting. We'll see how this plays out in terms of actual growth. I wouldn't count on it bringing revenue for us very quickly, but it is certainly something that we will continue to pursue in terms of growing chronic care," Murthy told the JPM audience.
Amazon Health Services rolled out its health benefits connector service last January to help connect customers with virtual care benefits.
Teladoc marks the fifth company to join Amazon Health Services' digital health benefits program, following Omada Health, as its first launch partner, Talkspace, behavioral health company Rula Health and digital musculoskeletal care company Hinge Health.
Teladoc Health has more than 1 million active enrollees across its chronic condition programs, which leverage connected devices, data-driven personalization and expert coaching to support sustainable behavior change and improved cardiometabolic health.
"This partnership helps deliver on our strategy to bring greater value to our customers in our individual solutions and across our integrated offerings,” Divita said.
Teladoc Health’s participation in the program comes as the companies look to collaborate on opportunities focused on putting the consumer at the center of the healthcare experience, Teladoc and Amazon executives said.
"We do expect revenue and margins in integrated care to accelerate as we go through the year in 2025," Murthy said.
The company continues to face headwinds with its BetterHelp direct-to-consumer virtual mental health solution with higher customer acquisition costs. In the first nine months of 2024, revenue for BetterHelp fell 8% to $790 million compared to the same period in 2023, according to the company's third-quarter financial report.
BetterHelp paying users, on average, during the first nine months of 2024 comprised 407,000 members, down about 13% versus the same quarter the previous year, according to Teladoc's third-quarter earnings report.
Divita noted that BetterHelp is a $1 billion business with more than 1 million individuals active on the platform. BetterHelp's AI-driven matching engines can quickly match patients to therapists; 95% of the time, patients can be matched in less than 48 hours, he noted.
"It's the largest direct-to-consumer virtual therapy business," he said. According to Teladoc data, 72% of BetterHelp users report symptom reduction of anxiety and depression.
Divita laid out strategic priorities for the BetterHelp business: Growing the underlying user base, advancing the value proposition through new features and enhancements as well as international expansion to new markets outside the U.S.
"We've had double-digit growth with BetterHelp internationally and we see that continuing. Through the course of 2025, the team is going to be rolling out more localized models, localized in terms of language content," he said.
Teladoc also is pursuing ways to get health benefit coverage for the BetterHelp service either through health plan coverage or employee assistance programs, he noted.
"Given the secular trends around mental health, our scaled position in integrated care and mental health and we have the largest, by far, direct-to-consumer mental health business, there's an opportunity for us to continue to progress forward. That's why we think that's the right place for us to be at this point in time with BetterHelp as we're able to pursue those priorities from a position of strength," Divita said.
He added, "We have solid financial strength when you look at our revenue scale, look at our margin profile, our cash flow generation, and we see an opportunity with these priorities to drive profitable growth."
Divita acknowledged the challenges Teladoc is facing in the market.
"We are a 'show-me story' at this point," he said. "I think it's going to come down to execution, our ability to articulate what we're doing in terms of our priorities and then showing success against that. I think it's underappreciated just the scale and breadth of what this company has been able to commercialize. There are not many in healthcare that can tout 93 million lives at anything."
He added, "We have access from health plans, employers, health systems, institutions, consumers—when you think about casting a net to go after some of the things, that gives an opportunity to drive value. With BetterHelp, there's no doubt that's been under a lot of pressure. But, if we're going to lean into mental health, to have the scaled business on both sides, I think that's an opportunity and an asset for our shareholders that we certainly wouldn't want to make hasty decisions on."
Murthy said Teladoc has "client stickiness" as well as momentum in its virtual visits growth and an expansive runway within its existing user base to offer other services such as chronic condition management, mental health and its Primary360 service.
"If you look at our underlying metrics, there is momentum in many ways, whether you look at our visits momentum, our membership growth, our international business, our chronic care enrollment gains that we are making, you know there is strength in those underlying metrics," she said.