Some of the largest telehealth providers in the country are looking for ways to leverage the growing popularity of virtual care backed by a rapid increase in membership and visits.
Teladoc, which saw total visits increase 54% to almost 1.5 million in 2017, expects to reach 2 million visits in 2018, Chief Medical Officer Lewis Levy, M.D., told FierceHealthcare. With 606,000 visits in the first quarter, the company is well on pace to exceed that threshold.
“I think more and more individuals are realizing accessing telehealth provides great care in a highly confidential manner,” he said. “That’s why I do believe we’re seeing a trend of greater and greater adoption year-over-year.”
Meanwhile, Doctor on Demand saw visits grow 152% from 2016 to 2017 along with a 60% bump in membership, according to CEO Hill Ferguson. While the company declined to share specific user data, Hill said Doctor on Demand recently surpassed 1 million video visits.
Visits increased 103% in the first three months compared to the first quarter last year, Hill added. He credits the growth to “deep relationships with health plans,” an area that Teladoc has also pointed to as a key growth driver.
“We also have increased market awareness and deep penetration in key markets that lack access to healthcare,” Ferguson said.
Both companies see mental health as a sector with significant opportunities for growth. In 2015, Teladoc acquired BetterHelp, a direct-to-consumer behavioral health platform, and added new capabilities with its acquisition of Best Doctors in 2017. In a year-end filing, the company said direct-to-consumer behavioral health “represents a material portion of our overall business,” adding that it spends “significant resources marketing this service.”
Likewise, Ferguson said Doctor on Demand saw a 240% increase in year-over-year mental health visits.
Despite swelling utilization, profitability has remained elusive. Although Teladoc saw revenue increase 109% in the first quarter of 2018, the company reported a net loss of $23.9 million.
Doctor on Demand declined to share financial information, including revenue, net profits and operating costs, but Ferguson said the company “has experienced triple-digit year-over-year growth” that has “significantly outpaced” cost of goods sold.
“Revenue growth exceeding [cost of goods sold] growth is driving [and] continues to drive notable gross margin growth, which continues to offset the company’s cost of operations,” he said.