Teladoc CEO Jason Gorevic certainly had a lot to talk about on yesterday’s Q2 earnings call. Referencing the recent legislation in Texas and the company’s acquisition of Best Doctors, Gorevic called Q2 2017 "the most exciting quarter in the company's history”. On the call, Gorevic delved into some details about how Teladoc and best Doctors will integrate, shared some future plans for the company, and weighed in on some of the trends and rumors in health technology.
The company saw a 68 percent year-over-year increase in revenue, bringing its earnings up to $44.6 million, with $37.5 million coming from subscription fees and $7.1 million from visit fees. It brought its total membership up to 20.5 million and conducted 309,000 visits during the quarter. However, Teladoc’s net loss was actually up year-over-year, from a loss of $14.8 million in Q2 2016 to a loss of $15.4 million last quarter. This can be attributed to increased spending across the board, including acquisition-related costs.
Interestingly, Teladoc is seeing a gradual shift from phone visits toward mobile or web-based video visits. With 55 percent of visits conducted online, this was the first quarter to see that number top 50 percent.
Teladoc also shared some customer wins on the call. On the employer side, Teladoc added Microsoft, with 180,000 covered lives, as a customer. But most of the gains highlighted were hospitals, including Adventist Health, Washington Health System in western Pennsylvania, and New York multispecialist group CareMount. Teladoc now works with 160 hospitals.
As for the Best Doctors acquisition, which closed July 14, Teladoc has plans to deliver its first integrated interface for existing overlap customers in January, with a more comprehensive integration planned for all clients in mid-2018. The plan is to roll some of Best Doctor’s clinical consultation and data analytics strengths into Teladoc’s offering.
“With clinical capabilities that span the entire healthcare continuum, Teledoc will soon represent the first stop for many consumers around the world looking to resolve their healthcare issues in the most efficient, high quality, and cost-effective manner,” Gorevic said. “Regardless of their needs, ranging from coughs to cardiac conditions, Teledoc will have the ability to help solve their concerns. By providing a single interface and intelligent guidance across the full spectrum of clinical capabilities, tools, information, and guidance in the Teledoc portfolio, we will transform how the consumer accesses the healthcare system, providing greater convenience, better outcomes, and unmatched value.”
The acquisition is also shaping what products Teladoc is looking to develop next.
“I think you’ll see us develop new services that leverage the respective capabilities of Best Doctors, with their sort of high-end specialty care, and Teladoc’s volume transaction processing and services,” Gorevic explained during the Q&A. “So that could look like things around chronic care management, post-discharge adherence, and follow-up visits for the hospital systems.”
During the Q&A, Gorevic was asked about whether Amazon, currently a Teladoc customer, could find its way to becoming a competitor, now that the company is pretty clearly getting into health.
“They are not the first large technology-oriented company to potentially be interested or express interest in this space. As you know, Google tried to enter this area. Verizon tried to enter this area. It is, as I think we've demonstrated, not as easy as it looks,” he said. “Honestly, I just don’t lose sleep about them as a competitor, and even if they do decide to get into this space, it's going to be many years before they have any real footprint.”
On the prospect of Medicare reimbursement, Gorevic said that it would be “a long, gradual march” but he doesn’t see a sea change coming in any currently pending legislation. And on the topic of Doctor on Demand’s $10 visits in the newly opened up Texas market, he was similarly dismissive.
“If I had to analyze it, I would probably say that they feel like they’re not going to have to give away too many visits since they launched the promotion for a limited amount of time at the beginning of August — not exactly peak season,” he said. “So I think that that’s something that will be a press release and we’ll never hear about it again.”
