Healthcare Shift During Pandemic Sees Rapid Growth In Telemedicine Companies
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New York, NY – September 9, 2020 – Doctors in 2020 are seeing more patients than ever through the interface of a smart device, with virtual healthcare visits on track to top one billion by the end of the year. Blue Cross Blue Shield has stated that telehealth use grew 1.6x since last summer, and now McKinsey & Company is now projecting the sector will be worth a quarter trillion dollars in the US healthcare market alone in the near future. Telemedicine’s meteoric rise this year has even caused Global X ETFs to create the brand new Global X Telemedicine & Digital Health ETF, which will track the rapid growth of companies in the sector that now includes CloudMD Software & Services Inc. (TSXV:DOC) (OTCPK:DOCRF), Teladoc Health (NYSE:TDOC), 1Life Healthcare, Inc. (NASDAQ:ONEM), WELL Health Technologies (TSX:WELL) (OTCPK:WLYYF), and Telus Corporation (NYSE:TU) (TSX:T).
For North American healthcare providers, the tech revolution shift into virtual medical care is akin to the changing of the guard from Blockbuster Video to Netflix. This is why the current telehealth market can successfully launch earlier stage SAAS-based health technology providers such as CloudMD Software & Services Inc. (DOC.V – DOCRF.PK), which grew to over 100,000 registered users on their telehealth app with over 3,000 licensed practitioners who represent nearly 3 million patients within a period of months.
CloudMD Software & Services Inc. (DOC.V – DOCRF.PK) has been accelerating its growth through the on-boarding of medical clinics across North America. What’s more, through a reseller agreement with IDYA4 to sell its Livecare flagship platform, the company is set for a major US expansion.
IDYA4’s clients aren’t small, with major US government agencies such as the US Department of Justice, and Homeland Security, as well as Deloitte, GTL, SAIC, and the New York State Education Department.
Also from a developmental standpoint, CloudMD Software & Services Inc. (DOC.V – DOCRF.PK) has also partnered with IBM’s Watson AI to enhance its platforms that include Livecare. By integrating Watson AI’s capabilities into the patient-centric telemedicine app, CloudMD can significantly free up clinical staff’s time. AI-based technologies, such as voice-to-text transcription, can improve administrative workflows and eliminate time-consuming non-patient-care activities.
Hundreds of Millions Flowing Into the Space
Investment is flowing into the sector quite quickly, keeping up with the rate of innovation that’s also rapidly advancing. CloudMD recently raised C$13 million through an oversubscribed financing in June, which the company successfully parlayed into a series of medical clinics that added access to tens of thousands of patients across North America. Then on September 1, the company announced another C$13 million bought deal public offering, which increased to C$18 million just one day later due to significant demand.
Sun Life recently took a C$32.7 million stake in a C$43 million financing round for telemedicine provider Dialogue. Digital elective care and telemedicine provider Ro successfully raised US$200 million to hit a US$1.5 billion valuation for the company. Doctor on Demand raised US$75 million in a funding round led by private equity firm General Atlantic.
But not only private capital is moving into the sector. Embedded within the US Congress’ US$2 trillion stimulus was US$185 million earmarked for telemedicine, while more Medicare Advantage insurance plans can now cover telehealth services.
Giant Growth in Patient Visits Year-Over-Year
Since the President declared a state of emergency in March, In Q1 2020, Teladoc Health (NYSE:TDOC) was providing over 20,000 virtual medical visits per day in the US and saw its total visits increase by 92% to over 2 million year-over-year. What’s more, on August 5, 2020, CloudMD announced that it is merging with leading Applied Health Signals company, Livongo. The post-merger company will have expected 2020 pro forma revenue of approximately $1.3 billion, representing year-over-year pro forma growth of 85%, and pro forma Adjusted EBITDA of over $120 million.
During the same period, San Francisco-based telehealth platform 1Life Healthcare, Inc. (NASDAQ:ONEM)—also known as “One Medical”—saw its membership count grow to 455,000, a 25% increase from Q1 2019. The result saw the company having a mid-July stock surge, before levelling off ahead of its earnings call. One Medical provides walk-in immunizations and lab services, plus programs for sports medicine, well-being, behavioral health, women’s health, men’s health, and pediatrics.
Crucial Infrastructure Innovation
Growing and developing the tools for success in the fight against the pandemic is requiring advancements within multiple areas.
In the months that followed an initial C$10 million commitment to covid-19 response, Canadian telecom giant Telus Corporation (NYSE:TU) (TSX:T) has become quite active in the fight against the pandemic. Now the C$22-billion Telus is expanding its Home Health Monitoring (HHM) solution to help doctors monitor patients from afar while they recover from COVID-19. Easily accessible through a mobile device, the Telus’ program sends daily prompts to the patient to report their biometrics such as temperature, physical symptoms and overall health condition. By incorporating these actions into care, the app provides crucial information on the status of a patient’s health to their clinicians who can regularly and remotely monitor their progress through a digital dashboard.
But for widespread adoption to take off, patients will need to be onboarded in droves. WELL Health Technologies (TSX:WELL) (OTC:WLYYF) just announced its plan to expand its telehealth services into the US market with the proposed majority stake in Circle Medical. Circle Medical is a US telehealth provider that delivers virtual primary healthcare services in 35 states and plans to extend its reach to the remaining states in the next few months.
As new developments continue to be announced, it’s being predicted that telehealth will go on strong long after COVID-19. Perhaps the biggest change so far this year was when healthcare providers suddenly received full Medicare and Medicaid reimbursement for telehealth visits at the same rate as those provided in person.
The game has changed, and it appears that telehealth/telemedicine is here to stay.
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