Editor's Note: This story was updated to clarify DocGo's existing payer partnership with Aetna is regional.
DocGo, a provider of mobile health services, unveiled new payer partnerships and multiyear targets on its investor day last month.
The company announced new payer agreements with EmblemHealth and Blue Cross Blue Shield of Tennessee, representing an additional 6.7 million covered lives. Other existing payer partners include UnitedHealthcare, Aetna in New York and New Jersey, Elevance Health, Cigna and L.A. Care and in total represent more than 20 million covered lives. And 19 open deals in the sales pipeline could provide medical care to an additional 250,000 patients if closed, the company said.
Another major purpose of investor day was to showcase DocGo's people, devices and mobile healthcare units. “DocGo’s a very physical company,” CEO Anthony Capone told Fierce Healthcare in an interview ahead of investor day. “There’s an enormous amount from the physical perspective that brings it all together.”
From 2016 through 2022, DocGo generated a compounded annual revenue growth rate of 84%, going from $11 million in revenue in 2016 to $440 million in 2022. This year, DocGo expects to surpass $500 million in annual revenues for the first time and is targeting a $1 billion run rate by the end of 2025.
As COVID testing declined in late 2022, DocGo pivoted to other revenue streams like remote patient monitoring (RPM), which is now expected to be the fastest growing segment. DocGo hopes RPM will make up 15% of total revenues by the end of 2025.
“Growth has always been our goal, but profitability has always been our yardstick,” Norm Rosenberg, DocGo’s chief financial officer, said in a presentation on investor day. He acknowledged significant startup costs for larger mobile health projects that have meant narrower margins in earlier phases.
But going forward, DocGo anticipates maintaining a “significant” annual growth rate while also maintaining its margins. Among other internal goals is the mobile health business growing at up to a 35% annual rate over the next several years while the transportation business grows 20%.
Revenue growth is largely driven by the company’s growing focus on RFPs, or requests for proposal—an organized way buyers like health systems and municipalities evaluate potential vendors. From the first quarter of 2022 to the first quarter of this year, DocGo’s contract value resulting from proposals grew an average of 18% per quarter.
“Our RFP machine has grown both the number of submissions and the average size of those submissions,” President and Chief Operating Officer Lee Bienstock said in a presentation. When RFPs request references, DocGo’s ongoing partnership and track record with New York City—the largest public health system —serves them well, he added.
New York City Mayor Eric Adams spoke at DocGo’s investor day event. “If you don’t have docs on the go, do you have a retro thinking of healthcare?” he said. The company helped the city get ahead of the COVID-19 pandemic, he added, and many other cities are facing similar public health questions.
“The more we keep people out of hospitals, the more cost effective it is and the more opportunities we have that people will access the healthcare that they need,” he added.
Another major tenet of DocGo’s strategy is not paying for customer acquisition. “That’s not a successful and sustainable financial strategy,” Capone said in the interview. Instead, the company partners with groups that already have patients in need and can bring them in: “They’re well positioned to be able to offer those patients more services, like monitoring and management,” Capone said.
DocGo says it can scale more quickly and cost effectively because of its modern AI-driven, cloud-based technology. “We’re a modern shop,” Hawk Newton, DocGo’s chief technology officer, said in a presentation. “Our in-house development team has the bandwidth to automate problems that can be very time consuming and error prone for old-school companies to do by hand.”
An investor asked executives whether, given ongoing reimbursement changes for RPM, the Centers for Medicare & Medicaid Services might take issue with the size of DocGo’s projected total addressable market by 2030 of about $17 billion.
Capone was quick to respond. “The key, though, is to focus on the management, not the monitoring,” he said. “Because one might say you’re monitoring, but are you actually impacting care to reduce cost and deliver better patient outcomes.”