MDLive closed a $50 million investment round on Wednesday, led by two of its largest insurance partners: Cigna and Health Care Service Corporation (HCSC).
The investment solidifies a longstanding partnership between the telehealth provider and the insurance companies, and speaks to the growing interest among payers to integrate virtual offerings, MDLive CEO Richard Berner told FierceHealthcare. Health Velocity Capital was also a leading investor in the funding round.
“This not only signals an endorsement from existing clients for us but from the industry overall,” he said. “These are clients who have been working with you over the course of multiple years and they're seeing such good results in not only the services we provide but in outcomes.”
RELATED: Telehealth providers look to capitalize on a rapidly expanding market
Those improved outcomes represent a “large reason” why Cigna and HCSC invested, Berner said, adding that the insurers have adjusted coverage policies to lower copays and fees for telehealth visits because of the return on investment compared to ER and urgent care utilization.
Tom Richards, Cigna’s global leader for strategy and business development said the insurer’s partnership with MDLive has lowered medical costs and ED utilization among beneficiaries that have expressed satisfaction with the service.
“Choice, personalization and affordability are critical to improving the U.S. health care system,” Richards said in a statement. “Telehealth impacts all three of these factors and we are continuing to invest in MDLIVE as a proven leader in the space.”
RELATED: Anthem partners with Samsung, American Well on telehealth offering
Berner said the company plans to use the funding to reinvest in consumer and clinician satisfaction and drive overall growth.
The funding round comes weeks after American Well, one of the MDLive’s top competitors, closed two funding rounds worth $365 million. Anthem also announced a partnership with Samsung and American Well to make virtual visits available on Galaxy devices.
Still, overall telehealth is used by a relatively small number of patients, overall. Berner said increasing awareness is the number one way to improve that, noting that people who use the service once come back nearly 1.8 times each year.