News roundup: telehealth claims drop 9% in February; Amwell’s good news, bad news Q1; tech-enabled practice Crossover Health growing; NowRx and Hyundai test semi-self-driving delivery

May 17, 2022 | by

FAIR Health’s February monthly tracker is pointing downward again. After a brief post-holiday rise to 5.4% of claims in January, it dropped to 4.9% in February, a 9% drop. Mental health claims seized the lead again by a country mile at 64.2% of claims. COVID-19 fell off the list of top 5 claim areas, though only 3.4% in January compared to 58.9% for mental health. This month lists categories of specialists delivering telehealth, and social workers topped the list at over 31%, which fits the telemental health picture. 

Amwell’s shaky opening to 2022. It should not come as any surprise to our Readers that Amwell, the Avis to Teladoc’s Hertz, didn’t have a good Q1. Most of their key indicators around total revenue, providers, and visits grew smartly. Unfortunately, their losses did too. Comparisons are to Q1 2021 unless noted:

Revenue grew to $64.2 million [$57.6 million], up 11.5%
Gross margin: 42.8% [38.0%], up 12.6%
Total active providers grew 12% from Q4 to approximately 102,000 [91,000] Total visits also grew 20% from Q4 to 1.8 million [1.5 million]

But there’s no turning the corner on losses this quarter, despite Converge, their unified platform, shifting over telehealth visits as planned, and adding SilverCloud, Conversa, and specialty telehealth with musculoskeletal (MSK) and dermatology programs to the totals.

Net loss was ($70.3) million, compared to ($39.8) million, an increase of 77%
Adjusted EBITDA was ($47.1) million, compared to ($26.4) million, an increase of 78%

Amwell’s projected 2022 is the same–growth mixed with financial losses: revenue between $275 and $285 million, adjusted EBITDA between ($200) million and ($190) million.

Inquiring investors may very well ask when Teladoc and Amwell, now smaller by a factor of just over 9, will ever be profitable. Mr. Market had its say over the past year, from a high of $14.26 in early June 2021, to today’s close of $3.09, an enterprise valuation loss of $11.17 or 78%, just a little better than Teladoc’s 81% in the same period. It will likely be no time soon. But the shares may be an excellent opportunity at a low cost. Yahoo Finance, FierceHealthcare, Becker’s 

Crossover Health, a hybrid virtual/in-person primary care practice group, announced that they would be opening new centers in Seattle, Austin, and another one in New York this year. Their virtual care operates in all states, while their in-person footprint consists of 41 health centers in 11 states which are generally about 5,000 square feet. They have 33 on-site clinics for employers, which are a combination of exclusive to one company and shared, and in total cover 400,000 eligible employees and dependents including for 115,000 Amazon employees and dependents. In addition to corporate clinics, Crossover offers individual membership plans in a concierge, under one roof type model. FierceHealthcare

In another tech area, med delivery company NowRx is partnering with Hyundai for a limited test of their self-driving cars in the LA area. Hyundai will be using slightly modified Hyundai Ioniq 5 electric vehicles with some autonomous capability, but using a driver. The purpose of the test is to simulate and gather data on autonomous vehicle delivery, such as delivery statistics, dispatch and customer interactions, and feedback. NowRx offers free same-day prescription delivery in the San Francisco Bay area, Orange County, and Los Angeles areas. FierceHealthcare

Short takes: Athenahealth close to sold, Teladoc wants More of the Patient, CVS fewer store customers

November 19, 2021 | by

Some thought starters for your weekend…

Reportedly, EHR and systems provider Athenahealth is thisclose to being sold. Via Becker’s Health IT, Seeking Alpha, a stock analysis site, connects the dots. In September, Bloomberg reported that private equity firms Veritas Capital and Elliot Investment Management (Evergreen Coast Capital) were considering selling Athenahealth for $20 billion or filing an initial public offering (IPO), two dramatic ways to exit. They entered in 2019 for $5.7 billion when it was already public, taking it private and combining it with a GE acquisition, Virence Health.

Timing is now Q1 2022. The most interested investors apparently are Hellman & Friedman, Bain Capital, KKR, Thoma Bravo, and Brookfield Asset Management. While no longer the powerhouse it once was in EHRs and related systems, it still can fetch a good return and provide a favorable exit for the two companies. Athenahealth had no comment for Becker’s. 

Teladoc and Big Telehealth wants More of the Patient, but will it be profitable? Our Readers are well aware of the War of the Roses (because it’s gone on so long) among the traditional telehealth players: Teladoc, Amwell, Included Health (Grand Rounds-Doctor on Demand), MD Live, with other smaller players jumping out of the juggernauts’ way and sticking to their knitting. With the addition of primary care (and, one can assume, the pandemic push), health systems and companies like Amazon Care and Babylon Health have jumped into the mix with ‘hit them where they ain’t’ offerings–Amazon offering house calls and services direct to employers, and Babylon 360 being offered to health plans and employers. Babylon and Teladoc’s Primary360 cover much the same ground, though, in connecting the patient users with an assigned doctor and primary care team for ongoing care.

As noted last month [TTA 7 Oct], the walls between payer and provider in primary care are collapsing in multiple ways in telehealth and payer models like insurtechs. Another model is Amwell’s reinforcing behavioral health capabilities (SilverCloud) and sliding into care management (Conversa and Amwell’s Converge platform).

Readers do not have to go far for confirmation that Teladoc aggressively wants most or all of the patient and isn’t going to settle for less. This is conveniently summarized by HISTalk from Teladoc’s Investor Day (with Editor’s emphasis): 

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Teladoc’s investor day presentation predicts that consumers will expect virtual-first encounters whose quality equals in-person ones and that offer them a variety of coordinated care services. The company says it has evolved from fee-for-service video visits and will become a partner with its customers in offering whole-person care at under value- and risk-based arrangements. It says it will be “the first place consumers turn to for all healthcare needs” for “whole-person care that is personalized, convenient, and connected.” TDOC shares dropped 8% on the day and have shed 25% in the past 12 months, with the company’s market value being $20 billion versus the $18.5 billion in cash it paid to acquire Livongo in late October 2020.

As we’ve previously noted, Teladoc has never made a profit. Many felt it overpaid for Livongo and cut loose too many in the leadership with truckloads of gold. Investors weren’t quite on board with the whole-person vision either, looking at the share price trends. 

CVS Aetna, on the other hand, wants fewer store customers, more patients. Their announcement this week is that they are closing 10% of their stores (900 of 9,900) to focus on urgent/chronic care HealthHUBs, expand those services, and cut down on the brick-and-mortar. This responds to Walgreens buying a majority interest in VillageMD/VillageHealth with adjacent full-service primary care practices and CareCentrix for home care [TTA 14 Oct]. Reuters

Say goodbye to the local, easily navigated ‘boulevard’ CVS, often furnishing food, writing tablets, wrapping paper, and paper towels along with prescriptions and shampoo, often patronized by an older age group, for a barn-like, coldly-lit superstore that you have to drive to. (And say goodbye to pharmacy head Neela Montgomery.) And why is every HealthHUB this Editor has seen unimpressive–strangely under-staffed or no-staffed, tatty waiting areas with a couple of plastic chairs, expanded with ugly outside trailers that cut down on parking spaces?

Cui bono? According to CNN Business, it’s Dollar General, which loves those local locations and has been planning to beef up its health-related OTC meds. They also now have a chief medical officer who is evaluating in-store eye exams, telemedicine, and partnerships with local pharmacies. Given inflation, more customers will be checking Dollar General out.