Prospering during the pandemic

By
February 3rd, 2021

Healthcare ventures

A healthcare company that grew 98% during 2020 to exceed US$1 Bn revenues

Game Changer (gam chang’ er) : A visionary strategist who alters the game his business plays or conceives an entirely new game.

In every crisis and challenge rests great opportunity. While the year 2020 witnessed complete or partial shutdown of businesses and hospitals due to Covid 19, for some companies, this period has opened a window of opportunities. These difficult times not only enabled them to pivot their business operations, but also grow their business.

The company in focus is Teladoc Health, a multinational telemedicine and virtual healthcare company based in the United States. Primary services include telehealth, medical opinions, AI and analytics, and licensable platform services. 

prospering during the pandemic

The company has made use of its well-established data and personalized insights, which has paved the way for it to offer whole-person care at affordable costs. Across channels, Teladoc Health provided and enabled over 14 Mn visits in 2020 including visits through the Teladoc enabled platform. Teladoc anticipates average annual revenue growth of 30-40% through 2023.

digital health

Teladoc is also seeing a rise in the number of products subscribed by its customers. In 2017, only 9% of Teledoc’s telehealth members were using more than one of their products This number has increased to 43% in 2020. This multi product subscription means stickier customers, better customer engagement and higher revenue per customer. Teladoc also has high visibility of revenues, as 80% of the revenues are subscription based, and the company has a 90% + retention rate of its customers.

Future potential

The company intends to grow into the US$250 Bn virtual care market opportunity through a four pronged approach.

hospital operations

Some people who did virtual doctor visits will return to in-person appointments, but the ease of virtual visits and investments by doctors in telemedicine software means virtual care is here to stay. While the inherent advantages and strengths of virtual care are well recognized, the Covid 19 pandemic has fast forwarded this by three to four years.

It is clear that the COVID-19 pandemic will forever change the face of healthcare. How Teladoc turns that pandemic-powered popularity for virtual care into a perpetually better business will be critical for its sustained success.  

Stock market performance

Teladoc added ~US$ 35 Bn in market capitalization during 2020 to reach ~US$42 Bn on Jan 25th 2021. The company is more valuable than Cerner, a leader in hospital EMR and information systems with revenues of US$5.7 Bn during 2019. Cerner has a market capitalization of US$ 24.6 Bn as of Jan 25th 2021. 

healthcare innovation

Implications for the healthcare industry

It is clearly evident that virtual care and digital health will become mainstream in the short to medium term future. We have looked at how healthcare organizations can realign their strategies and operations to be relevant in the new normal.  

  • Healthcare organizations need to embrace virtual care to stay relevant to the market. A well thought through virtual care strategy could be a competitive advantage for existing and new players
  • In addition to enhancing patient satisfaction, virtual care and digital operations would improve clinical outcomes and enhance care coordination
  • It will be of strategic importance for healthcare organizations to increase the budgets and enhance the IT systems to cater to the increasing popularity of virtual and digital health tools
  • A sustainable phygital model of care shall emerge. This model shall integrate physical visits with virtual care operations seamlessly. Many services including assessments and administrative processes shall be done virtually. 
  • Newer models of care will emerge that will mirror virtual healthcare factories. Some services like GP practices, chronic disease management will be the first to go virtual fully.
  • Organizations need to prepare the workforce for increased virtual care operations

 

Camomile’s digital health practice and service offerings

Camomile Healthcare has a large digital health practice and provides digital health strategy, product design, implementation and technology integration services to enable your hospital to stay laser focused on the current and emerging needs of patients and health professionals.

Camomile Healthcare has a strong team of doctors, nurses, data scientists, technologists, business consultants, healthcare leaders whose multi-disciplinary expertise helps us design and implement the right solutions.

Our service offerings include Solutions design and implementation, Virtual care operations, Data analytics and Digital transformation and strategy.  Readers can also write to raghava@camomilehealthcare.com to discuss further insights.