Teladoc formally responds to the Blue Orca Capital research report [TTA 25 Feb]. Their letter (PDF) via its legal counsel (King & Spalding) yesterday refutes Blue Orca’s allegations in a report on their stock (TDOC) that a “meaningful” number of BetterHelp patients are receiving AI therapy from therapists in the form of text/asynchronous and live messages, calling them “vague and unsubstantiated”.
The policy stated by Teladoc, quoted directly from this letter (Editor’s notes):
- BetterHelp expressly prohibits therapists from disclosing any member personal or health information to third-party AI. (Editor’s emphasis)
- BetterHelp has a Trust and Safety team dedicated to the detection and prevention of non-compliant use of AI and, if anything, has structured its platform (and its incentives to therapists) to promote live video calls over asynchronous messaging. (Another point made by Blue Orca)
- BetterHelp’s Privacy Policy provides further disclosures to members concerning its AI practices. (The Privacy Policy is at the end of Section 1 Data Collection and Processing, and is specific as to AI being used for ‘manual, repetitive tasks’ in processing and to “help therapists manage and document sessions more effectively”.)
Readers will note that this Editor called Blue Orca’s statements in its report about AI therapy “allegations”. I also noted that Blue Orca was a short seller. I later clarified what a ‘short seller’ is and that short sellers profit when the stock goes down. Short sellers are also prohibited by securities law from spreading false information about a stock for the purposes of profiting from its decline (Rule 10b-5 under the Securities Exchange Act of 1934.)
The Teladoc counsel letter to Blue Orca Capital addresses other allegations in the Blue Orca report about their changes in reporting practices in FY 2022 that supposedly inflated Teladoc’s profitability. These are outside the scope of both articles and will not be commented on here.
Disclosure: Teladoc reached out to this Editor, supplying information about their response including the King & Spalding letter.
This Editor hopes, and would like to see confirmation, that any BetterHelp therapist using third-party AI to respond to patients in providing direct therapy, versus Teladoc/BetterHelp supplied management tools, customer service information, or security tools, is disciplined and released. The integrity, privacy, and security of a telementalhealth platform is essential to its operation and the confidence of its patients–and should be publicly confirmed.
Update: In response to this article, a spokesperson from Teladoc Health further elaborated:
“To be clear, BetterHelp expressly prohibits therapists from disclosing any member personal or health information to third-party AI. BetterHelp has clear, rapid processes for members to report negative experiences, switch therapists, and cancel memberships, when requested. If a therapist is found to be practicing in an unethical manner, they are investigated and terminated from the platform. The overwhelming majority of members stay with their matched therapist, even though they are free to switch their therapist at any time.”
I’m sure that there are many analysts who are low enough to write false reports for Big money. Blue Orca is a blatantly false and misleading example of the tactics used by people to steal money out of the pockets of retail investors. It happens all the time. Short selling should be illegal. Short selling is banned in many countries
Hi SD, this particular short seller’s argument may be convoluted, but Teladoc’s checkered history is hard to inspire confidence. However, this well-seasoned observer has some hope that their new leadership under Chuck Divita can turn things around. Key to a turnaround is BetterHelp–Jason Gorevic wasn’t wrong about it, but off about its business health. But any Teladoc turnaround is going to be very hard because the hole drilled since 2020 is a deep one indeed. The telehealth market has changed considerably since then. Amwell is in a similar difficult position on a smaller scale…which I’ve written about.